Business Climate & Competitiveness

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The region competes with places around the world for new business and investments. These businesses decide where to locate based upon a variety of factors tied to a region’s business climate and local cost factors particular to their industry. A region’s tax and regulatory environment can play a major part in these decision-making processes, and the region must continue to look for ways to streamline and simplify the regulatory experience for businesses. Other states have a variety of financial incentives to help attract businesses that are not available in Washington. A bill enabling tax increment financing, a tool available in most other states, was signed into law in 2021.

One factor that impacts location and expansion decisions is the overall competitiveness of the region’s industries. The region’s industries have continued to evolve, with new subsectors emerging while others decrease in employment and impact over time. Working to foster diversity in the region’s industries will help ensure resiliency and viability into the future. COVID-19 demonstrated a risk to current and future competitiveness – global supply chain disruptions. The region’s economy would be strengthened by identifying ways to make local supply chains more resilient and focusing on expanding these regional supply chains through targeted business attraction activities.

Challenges and Opportunities

The region has identified the following key issues, opportunities, and challenges in sustaining the region’s economy:

The region has fewer financial incentives for economic development

Compared to other states, Washington has fewer tax and other financial incentives to attract companies and locate jobs.

Coordinating to streamline regulations

Efforts at the state, regional and local levels are working to improve the regulatory experience for businesses.

(New/Expanded) Evolving global industries for future resiliency

Fostering emerging industry opportunities is critical to help ensure the long-term viability of the region’s unique export industries.

(New/Expanded) Supply chains at risk of global disruptions

COVID-19 highlighted the challenges that regional industries face when supply chains that extend beyond local suppliers are disrupted by global events.

Strategic Response

The region has identified the following strategic focus areas for addressing identified challenges and opportunities:

Strengthen the region’s regulatory and industry competitiveness framework

The region should streamline and reduce regulatory barriers and expand tax and financing tools available to local governments and agencies to enable job growth.

Identified near-term actions:

  • Support existing regulatory streamlining efforts and find ways to scale up those efforts.
  • Support efforts to expand Washington’s limited financing tools for economic development, to attract and retain jobs and investment.
  • Preserve industry tax incentives that maintain and expand the region’s strong industry clusters and promote the growth of new clusters.
  • Protect and grow the Strategic Reserve Fund and deploy it in strategic ways to further economic development, including for workforce development.

(New/Expanded) Build resiliency into the region’s export-focused industries

The region should identify and foster growth opportunities within major globally focused industries to ensure long-term competitiveness and resiliency.

Identified near-term actions:

  • Leverage pandemic-related economic development funding efforts to build resiliency into regional industries.
  • Identify, examine, and support new industry growth opportunities across the region.
  • Support the development of digitization of services, such as healthcare.
  • Leverage the region’s life sciences and global health industries to support pandemic recovery and future health crisis resiliency.
  • Strengthen critical supply, funding, and distribution links in the region’s clusters.
  • Identify opportunities in regional supply chains for reshoring and target company supply chains for business attraction to create jobs and increase supply chain resiliency.

The region competes with places around the world for new business and investments. These businesses decide where to locate based upon a variety of factors tied to a region’s business climate and local cost factors particular to their industry. A region’s tax and regulatory environment can play a major part in these decision-making processes, and the region must continue to look for ways to streamline and simplify the regulatory experience for businesses. Other states have a variety of financial incentives to help attract businesses that are not available in Washington. A bill enabling tax increment financing, a tool available in most other states, was signed into law in 2021.

One factor that impacts location and expansion decisions is the overall competitiveness of the region’s industries. The region’s industries have continued to evolve, with new subsectors emerging while others decrease in employment and impact over time. Working to foster diversity in the region’s industries will help ensure resiliency and viability into the future. COVID-19 demonstrated a risk to current and future competitiveness – global supply chain disruptions. The region’s economy would be strengthened by identifying ways to make local supply chains more resilient and focusing on expanding these regional supply chains through targeted business attraction activities.

Challenges and Opportunities

The region has identified the following key issues, opportunities, and challenges in sustaining the region’s economy:

The region has fewer financial incentives for economic development

Compared to other states, Washington has fewer tax and other financial incentives to attract companies and locate jobs.

Coordinating to streamline regulations

Efforts at the state, regional and local levels are working to improve the regulatory experience for businesses.

(New/Expanded) Evolving global industries for future resiliency

Fostering emerging industry opportunities is critical to help ensure the long-term viability of the region’s unique export industries.

(New/Expanded) Supply chains at risk of global disruptions

COVID-19 highlighted the challenges that regional industries face when supply chains that extend beyond local suppliers are disrupted by global events.

Strategic Response

The region has identified the following strategic focus areas for addressing identified challenges and opportunities:

Strengthen the region’s regulatory and industry competitiveness framework

The region should streamline and reduce regulatory barriers and expand tax and financing tools available to local governments and agencies to enable job growth.

Identified near-term actions:

  • Support existing regulatory streamlining efforts and find ways to scale up those efforts.
  • Support efforts to expand Washington’s limited financing tools for economic development, to attract and retain jobs and investment.
  • Preserve industry tax incentives that maintain and expand the region’s strong industry clusters and promote the growth of new clusters.
  • Protect and grow the Strategic Reserve Fund and deploy it in strategic ways to further economic development, including for workforce development.

(New/Expanded) Build resiliency into the region’s export-focused industries

The region should identify and foster growth opportunities within major globally focused industries to ensure long-term competitiveness and resiliency.

Identified near-term actions:

  • Leverage pandemic-related economic development funding efforts to build resiliency into regional industries.
  • Identify, examine, and support new industry growth opportunities across the region.
  • Support the development of digitization of services, such as healthcare.
  • Leverage the region’s life sciences and global health industries to support pandemic recovery and future health crisis resiliency.
  • Strengthen critical supply, funding, and distribution links in the region’s clusters.
  • Identify opportunities in regional supply chains for reshoring and target company supply chains for business attraction to create jobs and increase supply chain resiliency.