Attracting Foreign Businesses - A Small State With Great Appeal

Sunday, June 1, 2008 - 01:00

The Editor interviews Jack Markell, Treasurer, State of Delaware.

Editor: The attractiveness of a region or state to foreign corporations as a business location is attributed to a number of factors. I would like to ask you about some of these. First and foremost, does Delaware have a favorable business climate?

Markell: Yes. In his interview in this issue of The Metropolitan Corporate Counsel, our Chief Justice, Myron Steele describes how the even-handed justice meted out by Delaware courts creates a magnet for business. Delaware has lower than average unemployment. It also has a fair and equitable tax system, and a well-trained workforce. We are small, and can be nimble and respond very quickly to business needs.

We are in an ideal location, because companies that have located facilities here have relatively quick access to places like New York, Washington D.C., Philadelphia and Baltimore without having to pay the high costs of real estate and labor you find in these markets. Delaware can be a good place to do business and live.

Delaware's unemployment rate as of December 2007 was 3.8%, which was over one percent lower than the national average of 5.0%.

Editor: Tell us more about Delaware's work force.

Markell: Delaware has a terrific work force, with a strong work ethic.

We have an excellent community college system called Delaware Technical Community College. At its four branches throughout the State, it does a great job of providing students with the tools they need to enter the work force . For over 30 years, the College has been providing education and training to the Delaware workforce.

The College is a Statewide provider of many job training and job readiness programs. A new approach to education and training is the College's distance learning technologies which combine instruction and technology to reach individuals who are not able to attend classes on campus. Online courses are available in addition to other technological delivery modes such as satellite up linking and down linking, full motion video, filming of classes for distribution through videotape, audio conferencing and electronic mail.

Editor: What incentives are available to corporations seeking to locate in Delaware?

Markell: The Delaware Economic Development Office (DEDO) was created in 1981. Its mission is to attract business to the State and to open up employment opportunities for all our citizens. The incentives provided by DEDO through the Delaware Economic Development Authority include the following: Delaware Competitiveness Fund, Delaware Strategic Fund, Citizens Bank of Delaware's Matching Loan Partnership Program, Tax Exempt Bond Financing, Emerging Technology Funds, Delaware Access Program and the Clean Energy Center Partnership.

Editor: Does DEDO offer help with site location?

Markell: Yes, for more information please visit DEDO's Web site: dedo.delaware.gov.

Editor: Do law firms with offices in Delaware assist in the process of attracting new business to the State and convincing them to locate there?

Markell: Yes, the role of law firms in attracting business to locate in Delaware is just one aspect of the public-private partnership that exists between the State and the public sector. A good example is the way in which law firms work with DEDO. We have a very strong legal community in Delaware and it plays a major role in the success of our economy.

Editor: Tell us about the transportation network.

Markell: We have all the pieces of an excellent transportation system. We've got I-95, the most important road on the east coast, which runs right through Delaware. We are on the Amtrak line; we've got New Castle County Airport, which is a great little airport, and we're half an hour from the Philadelphia International Airport. And then there is our port which completes the picture of Delaware as a preeminent transportation hub. We handle fruit from Chile. We've handled cars over the years from a number of different suppliers.

Editor: What about the tax climate?

Markell: Delaware is regarded as the third most attractive state in the country in terms of the tax burden.

We have also made great progress in reducing the top personal income tax rate. It is now only 5.95%. We are one of only a handful of states in the country with no sales tax. The overall tax situation is very attractive. Real estate taxes are very low.

Editor: What about the quality of life?

Markell: Delaware has great natural resources. We have a lot of nice outdoor spaces to enjoy, but there are still plenty of places, particularly near our urban centers, where foreign companies would find it very attractive to build.

Editor: What does Delaware need to do to stay competitive?

Markell: I think there's a lot we can do. We need to become more attractive to smaller businesses and entrepreneurs; we need to attract more venture capital and to be ever-nimble; we need to be proactive and not responsive. We need to put ourselves into the shoes of the people who are creating the jobs and the prosperity in the first place.

Editor: What do you think is the biggest national problem challenging Delaware?

Markell: Obviously every state is very much affected by what goes on with the national economy. The more strongly the national economy performs, the better it will be for Delaware.