Incentive Inequality

We had a nice ribbon cutting this week at Dwolla and during the event I received a question that surprised me a little bit. While I’ll get the exact words wrong, the gist of it was:

Doesn’t it bother you that Apple talks about 50 jobs and they get $200 million in incentives. But you all just created 50 jobs and maybe got some parking incentives?

My answer to this is something I thought was worth writing about because it’s a complex topic and it appeared like my answer wasn’t what was expected.

The ~50 jobs Dwolla created in Des Moines in 2018 are central to the downtown community, re-use a lot of infrastructure that is already in place, and our tax contributions will go to improve the community. Our bank deposits are largely going to stay here, our kids attend local schools, and our hobbies result in purchases in local establishments. This is all sort of a given.

For those of us who are already here, incentives aren’t a zero sum game. Living in a community tends to also give one consideration for where the tax funds are going and what programs are getting funded. Being a good community member once you’re already living somewhere involves doing predictable things like paying your taxes and contributing to policy in a way that makes your community better.

Apple on the other hand can put a $1.3 billion dollar data center wherever it pleases, and whatever zip code it lands in should be happy to have it. As they do the math around that investment, they are optimizing for a much smaller number of things and I’d wager money and internet infrastructure are two leading topics. I get it and I don’t have a problem with that. As I’ve previously written, I also believe there are tertiary benefits.

The investments that Apple, Microsoft, Facebook, and even Google make around the Des Moines community certainly cost us a lot of money in incentives but they also help create opportunities that probably wouldn’t be here without them. I’m ok with that trade off.

The fact that those companies already have some presence in the community also makes them more approachable. It’s a lot easier to expand business relationships once there is some connection to build upon.

Dwolla’s <air quotes> relationship anchors </air quotes> as it were, have been placed firmly in Des Moines and San Francisco. How we think about incentives just isn’t going to be the same as The Big Four. I would also encourage others not to think about them as equal.

Fwiw, Dwolla did get some parking incentives and everyone we worked with was very pleasant and helpful.

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