Winning the Fight on Business Talent Erosion in Nebraska
Although an article on soil erosion might seem more fitting coming from Nebraska, the greater erosion concern for the Cornhusker State is retaining its young and talented workforce. Nebraska’s state education system ranks No. 6 in the country and its high school graduation rate ranks No. 4 in the country, according to U.S. News & World Report. But Nebraska is faced with the dual challenge of retaining young, homegrown talent as well as attracting the next generation of talent from outside the state.
Nebraska is presently leaking young talent to surrounding states with an annual net outward migration of approximately 3,300 persons and ranks 39th in the country with respect to attracting talent between the ages of 25 to 29 years old, so it’s a double whammy. A 3,300-person out-migration of talent might seem fairly modest, but over time, it can and will become significant. Like a faucet that continually drips, you don’t realize the cost until you get the water bill.
Taking steps to enhance both the retention and attraction of young talent is key to Nebraska’s economic success. Thankfully, such steps are being pursued in both the private and public sector. Two plans of action in particular are worth noting. These include Blueprint Nebraska and Legislative Bill 720 ImagiNE Nebraska Act.
The former is a public-private effort to join together Nebraska’s business, community and economic development leaders to work across company, community and county lines. The latter is an effort by a group of Nebraska state senators to renew and improve upon previously existing state-sponsored economic incentives.
Harnessing business, community and economic development leaders from across the state, Blueprint Nebraska has successfully identified 15 key economic initiatives for Nebraska. A diversified group of 320 advisors, including an advisory council and industry councils, were engaged along with 275 various council members with varying industry sector expertise, as well as 5,000 local respondents to help identify, discuss and determine the critical path toward economic success across the Cornhusker State.
To the best of my knowledge, the amount of participation and the overall diversity reflected among the participants is unparalleled. In that regard, Blueprint Nebraska has created a blueprint for all Nebraskans, where core competencies, geography and the state’s natural resources, including its residents, can be materially leveraged through applied technology.
By the year 2030, Blueprint Nebraska expects to create 25,000 jobs, add $15,000 to the annual income of every Nebraskan, make Nebraska a top-three state in which to live, bring 43,000 new 18- to 34-year-old residents to the state, and secure $200 million of additional annual R&D investment. This will be achieved through the implementation of key economic initiatives tied to people, places, government and industry sectors.
A component to achieving these goals is reimagined government services through digitization and consolidation, thereby freeing up resources to help fund identified initiatives. Although not entirely “reimagined,” the ImagiNE Nebraska Act provides a revised and enhanced tax incentive program encouraging the creation of higher-paying jobs and more investment from employers.
ImagiNE Nebraska Act
In 2005, the Nebraska Unicameral passed the Nebraska Advantage Act, a performance-based business growth incentive program providing a specific blend of income, sales and/or property tax benefits. However, the 2005 Nebraska Advantage Act has an automatic sunset provision that occurs at the end of this year. The obvious concern is addressing the ongoing need for state incentives in order to grow business in Nebraska. This growth provides an obvious vehicle for helping to retain and attract a young and talented next-generation workforce.
It’s important to recognize, when it comes to tax incentives as a tool for attracting business, that all 50 states as well as Guam and Puerto Rico offer economic enticements.
As noted in a recent article titled “The Battle for Incentives Is in Full Swing,” author David Brown, president and CEO of the Greater Omaha Chamber, states, “Since every state offers incentives and every company has the option to expand or locate anywhere they choose, comparisons of costs of other locations always include incentives that would be available to attract that investment. Therefore, every project we deal with is competitive and incentives are a necessary part of economic development. The site selection process that companies go through is actually a site-elimination process. Without incentives, we give site selectors an automatic pass on Nebraska.”
In the world of economic development, especially in the Heartland region, incentives are a must. Competing for industry and technology without incentives is like trying to grow crops without fertilizer. A farmer might be able to make a go of it for a brief time, but eventually the quality of the soil is depleted, and the harvest suffers. An erosion takes place in the quality of the soil.
But like fertilizer, when incentives are added at the right time, at the right place and in the right amount, the end results are higher yield, greater profitability and greater prosperity.
The approach taken by both Blueprint Nebraska and ImagiNE Nebraska Act are geared toward applying Nebraska’s capital resources at the right time, place and amount to create success for the entire state, and doing it in such a manner as to foster the opportunities necessary for keeping, attracting and growing the next generation of Nebraskans. The success of both of these efforts, each in their own right and collectively, will prove critical in Nebraska winning the fight on talent erosion.
— By Frank Barber, Partner, Senior Vice President, N&M Brokerage Services. This article originally appeared in the April 2020 issue of Heartland Real Estate Business magazine.