|
Understanding the Incentives Process
Incentives are used to reward, induce or motivate action from the corporate sector with such elements as job creation, job quality, job diversification, job retention, industry clustering, increased trade or increased investment. To gain greater insight into the incentive process, the Tax Advantage Group (TAG), Greenville, S.C., headed by Tammy Propst, studied the process from both the public and corporate sector perspective. In all, TAG conducted 76 web-based interviews targeting senior corporate and economic development professionals.
According to Propst, who has a background of more than 15 years of incentive and economic development experience, including serving as partner-in-charge of KPMG's Business Incentive Group, some of the survey's findings were:
- The corporate sector is far from fully using incentives because of complicated programs and fragmentation of incentive responsibility.
- Economic development professionals expressed increased concern due to confidentiality and public disclosure issues, public scrutiny and automatic audits as negative inducements to using available benefits.
- 87 percent of those in the public sector used economic impact studies while only 33 percent of corporations did the same. This shows that the public sector is more prepared than the private sector to gauge the amount of incentives that are appropriate for a deal.
- 36 percent of corporations have requested special legislation for a specific project based on significant investment and job creation. The public sector sees higher job quality and job retention as issues that may drive special legislation.
- 73 percent of the corporate sector determined that "clawback" language is getting stronger, while only 48 percent of the economic development community thought so. (Clawback is an economic development term describing the ability of a municipality to seek reimbursement from a company that fails to meet all or some of its employment or capital investment commitments.)
- 72 percent of the economic development community imposes strict clawback language but only 49 percent of the corporate sector agrees to it.
- 65 percent of economic development agencies have a formal process for offering an incentive package, while only 39 percent of corporations have a formal process for negotiating and implementing the package.
Based on this survey, Propst offered some guidelines for the corporate sector to refine the incentive process and to make it a win-win for all involved. Her recommendations include:
Require a coordinated and process-driven incentive program.
Recognize activities that the economic development community seeks to motivate.
Use an economic impact study to understand and appreciate the level of benefits.
Recognize what activities economic development professionals are looking for in order to pass special legislation.
In addition to preparing a traditional incentive proposal, ask the economic development community to document the actual steps necessary to receive incentive benefits.
Make sure all parties are comfortable with and supportive of the contractual language.
For more information
Tax Advantage Group
www.taxadvantagegroup.com
The Survey Says: Two-Thirds of Global Businesses Will Deploy VoIP to the Desktop by 2006
By 2006, more than two-thirds of the largest "Global 2000" companies will have started deployment of Voice over Internet Protocol (VoIP) to the desktop, according to a report by Deloitte & Touche. Desktop VoIP is the most complete form of VoIP, offering the greatest cost savings, flexibility, productivity, process improvements and overall disruption. While 26 percent of survey participants have already deployed desktop VoIP, only one-third of these companies have offered it to all employees.
According to the Deloitte research report, the overwhelming driver for VoIP among respondents is cost reduction. Eighty-four percent of companies polled regarded cost reduction as a key driver. Beyond cost, VoIP has the potential to transform enterprises' call centers, offshoring operations and telecommuting tools. The survey finds 79 percent of early VoIP adopters are either "mostly" or "highly" satisfied with the technology to date.
"With VoIP, it's no longer a question of if-- it's a question of when and how," said Igal Brightman, global managing partner of Deloitte's Technology, Media & Telecommunications Group. "Although early adopters focused almost exclusively on the substantial cost savings that can result from VoIP deployment, it has even more potential to improve productivity and transform the way people work.
"VoIP is not just about cutting costs. It is about transforming voice communications throughout the enterprise, and changing the way business is done," Brightman said. "To properly evaluate VoIP, it needs to be viewed in a broader, company-wide context."
The report recommends at least four top executives' involvement to ensure that the benefits from VoIP deployment are maximized across the entire enterprise.
For more information
Deloitte & Touche
www.deloitte.com
Are Your Building Security Cams Entertaining Web Snoops?
While it is possible to find virtually anything on the Internet, one unintended research result may be pictures from the surveillance cameras at your vital facilities. According to the Wall Street Journal, web searchers are able to find web cams of everything from kids watching TV in their living rooms to harbors, buildings and bridges.
How is this possible? The cameras that are affected are so-called network cameras that can be plugged directly into an Internet connection, rather than to the back of a computer. As a security tool, they are cheaper and easier to set up than conventional closed circuit cameras.
The solution? Cameras connected to the Internet generate strings of text, which can be picked up by search engines, unless protected by password or other mechanisms. Thus, the cams need to be password protected.
|
|
Cost of Building Security Rising
For anyone handling office building security, it probably comes as no surprise that costs have jumped considerably since 9/11. Before the September 2001 attack, the cost of security in privately-owned office buildings was approximately 50 cents per square foot. By 2003, it was $1. In government-owned buildings, where concrete barriers, structural reinforcement, wider stairways and enhanced communications have been installed, the costs go as high as $2 per square foot, according to Christopher Kinum, executive managing director, Cushman & Wakefield of New Jersey, writing in the McMorrow Report.com.
"Equipment and personnel are not the only security issues that affect the bottom line," he said. "The cost of insurance on office space has gone up from $0.24 to $0.40 per square foot in the past three years. In 2002, the federal government passed the Terrorism Risk Insurance Act, providing for a public-private sharing of some of these insurance costs. However, this legislation is in effect only until December 31, 2005. There is no doubt that after that date, the cost of such insurance will rise dramatically.
"Negotiations are now in progress to determine whether the cost will be considered a capital expense shouldered by the building owners and thus eroding profits, or whether it will be passed on to the tenants through their leases," he went on, adding that either way, leases should be reviewed to determine each party's exposure with regard to terrorism risk insurance costs. "It is also unclear at this time whether the government will require insurance companies to offer terrorism insurance to commercial buildings," he said.
|
|
By Ron Derven, co-editor of Development magazine |
