by Catherine Konieczny
South Carolina is touting the success of their economic development incentives this week following a press release from Volvo, announcing a manufacturing plant just outside of Charleston. The plant is planned to draw investment upwards of $500 million and 2,000 jobs. SelectUSA heralds the plant as the first US manufacturing facility for Volvo, who sites the port availability, a well-trained labor force, and “attractive investment environment” as the reason for choosing Berkeley County.
Anyone who studies economic development can understand what the latter is really saying. Attractive investment environment means incentives. It is no coincidence that Buncombe County in North Carolina previously attempted an agreement with Volvo in 2007. That plan, which was smaller at only $56 million with 295 jobs, fell through presumably because South Carolina offered more than the planned $4 million. In fact, with the recent press release come figures that SC is offering an estimated $120 million . For a quick comparison that means SC is willing to pay Volvo 24 cents to the dollar, 17 cents more than NC.
The takeaway is to be cautious of the benefits advertised by agreements like these. There always hidden numbers and external impacts that chip away at the positive economic impact promoted by development authorities. This is not to say that the move will not have any positive impact, only that it comes at a very significant expense to SC.