This involves taking a proactive planning position and determining where they want to be economically and how to get there. Some of the most often used and important economic development activities are business attraction and retention programs. They are being used more and more, and in the process, becoming more and more complex. At the same time, businesses and industries are demanding more from a potential location. The result is that localities are increasingly providing incentives to potential businesses in order to attract and retain them.
Incentives can come in many different forms, the most obvious being tax breaks.
While tax abatements are the most widely used incentive, others, such as land, infrastructure and employee training, are also used. Whatever the form, incentive packages have firmly embedded themselves in most economic development programs. However, questions remain. The answers to these questions are the focus of much debate. As for the necessity of incentives, the debate may appear to be one-sided.