Defining business friendly

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Linda Baker
Thursday, March 28, 2013


definingbusinessfriendlyIf I had a dollar for every time a CEO or business owner told me Oregon was hostile to business interests, well, let’s just say I wouldn’t be quite so worried about how I’m going to pay my son’s college tab over the next four years. Here’s Columbia Sportswear chief executive Tim Boyle, who weighed in on the topic when I interviewed him for my January cover story:

“When I meet with my personal accountant, his first thing is, ‘ok, I’m recommending that you move because the tax environment is so onerous. I know you’re going to do what you want to do, but I don’t want to be sued by your heirs because I gave you poor tax advice.’”

“I have no plan to move today,” said Boyle “But when your accountant tells you to move…”

Given Columbia’s long history in the state of Oregon, it’s a bit hard to believe Boyle would make good on his implied threat and export Columbia to a state he considers more business friendly.  Indeed, criticisms about the city and state’s business climate tend to be just that: complaints on the part of business owners, who then stay put. Data on the number of companies that actually leave the state because of a hostile business environment is notoriously hard to come by.

Then again, earlier this week, I did have a chance encounter with a Portland CEO who is decamping with his year-old startup for a city describes as having a sunnier business climate, a metropolitan area with a major research university and more venture capital and economic diversity than the Portland metro area.

Weighing in on the opposing side of the "Is Oregon a Bad Place to do Business" debate are boosters touting the city and state’s famed livability as a prime attraction for new businesses looking to locate here or existing companies seeking to expand.

The latest plaudits came my way from Tim Goodall, president of Islabikes USA, a UK-based design and manufacturer of children’s bikes that will open its U.S. headquarters in Portland April 15.

The company considered locating its headquarters closer to high-density population centers on the East Coast or California, said Goodall, a Shropshire native who, by the way, clocks in at only 25 years old. (How did he climb so high at such a young age? “I started working day off from high school and never looked back”).

Isla, which is setting up shop on Produce Row in SE Portland, chose Portland for its cultural vibe, said Goodall, who has been in the country just six weeks and has already become a Portland proselytizer. “In California, we just didn’t feel the synergy,” he says. With its eco- and bike-friendly family lifestyle, Portland was a natural fit. “The city has got that European feel to it. It’s aligned with our values.”

Granted, Isla, which sells most of its bikes online, expects to employ only four people by the end of the year, not exactly a jobs windfall for a city with an 7.2% unemployment rate. 

Should we define a state’s business friendliness by tax liability alone? Or should we take the approach of our startup CEO (who didn’t want his name, or that of his company to appear in this story for fear of sounding too negative) and focus on building the entrepreneurial ecosystem with great universities and access to financing?

Or are cultural/lifestyle factors the real business game changer: the bikes, the breweries, the bakeries?

The answer is a no-brainer. Today’s drivers of economic growth are multi-faceted and include large private and publicly traded companies, small businesses, start ups. Defining business friendly practices according to a single paradigm may have made sense in the past, but not in today's rapidly changing economic development environment.

There is one step everyone can take while pondering what it takes to make a city and state attractive to businesses — inject an evergreen debate with an abundance of fresh thinking.

OB Editor Linda Baker keeps tabs on CEO and public policy issues, with frequent forays into innovation, entrepreneurship, and bikes.



0 #1 Personal vs. CorporateGuest 2013-03-28 20:13:57
And let's not forget the distinction between personal income tax and corporate income tax. While personal income tax certainly affects business decision-makers and individuals that pass through corporate income into personal income, Oregon's corporate income tax is extremely low compared to other states. It's personal income tax rates that are relatively high, because all our eggs are collected in that one basket, with no sales tax as the vast majority of other states have.
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0 #2 Pres, Produce Row Prop Mgt CoGuest 2013-03-28 21:01:03
we need to focus on all the our culture the way it's evolving, but get serious about tax policy change, addressing the needs of the future, not what was apparent when current tax policy was established. We are punitive to the job creators, which is why we struggle here. Finding the balance is tough, but necessary.
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0 #3 defining or passing on two storiesGuest 2013-03-29 05:25:38
Hmm, always good to be reminded of this stuff, but not clearly stated as to what ALL the pluses and minuses are for Oregon.

Maybe some ideas of what the unhappy CEO is looking fwd to in his new surroundings.

Maybe more than a few subjects insights.
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0 #4 RE: Defining business friendlyGuest 2013-03-29 16:54:58
Hmmm... I'm not sure you can make the arguement, effectively anyway, that Oregon is not so unfriendly to business, by using as an example a 25-year-old from the UK who is moving his bicycle business to Portland. I would call that mostly a lifestyle decision and not a business decision. When a 45-year-old moves his mature business to Oregon, that will be a business decision.
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0 #5 Quality and CostGuest 2013-03-29 17:10:26
But you're missing the connection that I think Linda did a great job of pointing out, those things are all interconnected. "Lifestyle" considerations are incorporated into business decisions. And particularly with a bicycle firm, a significant part of the business decision. Our outdoor gear industry is strong and his market is here. To dismiss the case study because he's a young guy is pretty short-sided.

But again, Oregon competes on cost and quality. Other states may beat us on one cost, such as personal income tax, but Oregon will be cheaper on many others. Other states might have other "quality" aspects we don't, but we'll beat them on some others.

You can't just look at one input that goes into a business location decision and ignore all the others.
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0 #6 Pres, Produce Row Prop MgtGuest 2013-03-29 17:20:40
I thank all who have responded, and yes there are many variables to Oregon's advantages and disadvantages. A high personal income tax is not an issue to most, until there is appreciable wealth accumulation. And that wealth is what fuels small biz with capital. Oregon is competitive on the corporate tax side, but it's individuals who make investments and we are very punitive, which is why Washington's economy is far more robust. It's not equitable, but it's reality.
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0 #7 Making Portland Safe for YuppiesGuest 2013-04-05 03:52:55
So trendy young people are excited about creating a business climate that's attractive to trendy young people. Where's the love for the honest blue collar job?
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