From Barron's
Industry Clusters Are More Valuable Than Any Corporate Tax Break
By Greg Satell
It’s rare for relatively arcane tax practices to get national attention. But everything involving Amazon and Alexandria Ocasio-Cortez seems to make national news. So it perhaps shouldn’t surprise us that after Amazon announced that it would back out of a deal to build one of its HQ2 sites in Long Island City, in large part because of opposition from local politicians (including AOC) to tax breaks offered by the city and state, we’ve seen a renewed debate over the practice of offering tax incentives to corporations looking to relocate...
We can find some of the answers in AnnaLee Saxenian’s Regional Advantage. Written in the early 1990s, before the rise of the Internet, the UC Berkeley sociologist traces the rise of Silicon Valley alongside the concurrent decline of Boston’s “technology highway.” As she explains, while Boston-based companies, such as DEC and Data General, saw themselves as independent entities, the Silicon Valley upstarts saw themselves as an ecosystem...
To be clear, in my personal conversations with Saxenian, she was careful to stress that she saw no indication that the Silicon Valley entrepreneurs were somehow more virtuous and the Boston executives more greedy. Rather the differences in their respective approaches were largely due to circumstance. For example, there was less of an industrial base in the Bay Area, so people banded together out of necessity...
AnnaLee (Anno) Saxenian is Dean of the School of Information and she holds a joint faculty appointment in the School of Information and the Department of City and Regional Planning at UC Berkeley.
