Sometimes short-term, tactical decisions threaten to overwhelm all of our high aspirations and big picture thinking about Louisville and its region. Case in point: the day this month when New York Times columnist Thomas Friedman (author of The World Is Flat) wrote about the urgent need to refocus U.S. policy on economic competitiveness.
It was the same day that the Kentucky House of Representatives unveiled its approach to managing massive budget shortfalls for the next two years: eliminating days from the public school year, reducing funding for higher education once again, and, in effect, raising the cost of business investment through tax changes.
Each of those steps runs precisely counter to what Friedman was urging in recounting a speech in which the CEO of Intel, Paul Otellini, spelled out the factors that led him to build a new microchip factory in China.
Most notably, the decision didn’t hinge on lower labor costs but on taxes and incentives designed to lure firms like Intel to invest and grow jobs. “A new semiconductor factory at world scale built from scratch is about $4.5 billion – in the United States,” Otellini said. “If I build that factory in almost any other country in the world, I could save $1 billion…And it wasn’t because the labor costs are lower but the cost of operating when you look at it after tax was substantially lower…
His point: “While America still has the quality work force, political stability and natural resources a company like Intel needs, the U.S. is badly lagging in developing the next generation of scientific talent and incentives to induce big multinationals to create lots more jobs here.”
Think how much more true that is of our region – where it often seems that we are trapped in a downward spiral, sacrificing long-term interests to immediate needs.