Area Development's Andrew Greiner speaks with economic development incentives experts Amy Gerber of Cushman & Wakefield and Kathy Mussio of Atlas Insight. Together, they discuss the evolving landscape of tax incentives, the shift toward workforce development, and the role of sustainability in attracting new industries. This transcript has been lightly edited for grammar and style.

Andrew Greiner:
Hi. We're here with Kathy Mussio and Amy Gerber, and we're talking about incentives for the fourth-quarter issue of Area Development magazine. To kick off the discussion, how have incentives evolved recently to address the unique needs of different industries? What trends are you seeing in the customization of incentives for advanced manufacturing?

Kathy Mussio:
Thanks, Andrew—and Amy, great to be with you. It’s not a new concept for governments to pick winners and losers in deciding what types of industries they’re going to incentivize, especially in the energy space. Think about it: on a federal level, this has happened over the years with oil and gas, nuclear, biofuels, solar, and other renewables. As new technologies emerge, we see new types of incentives.

Specific to advanced manufacturing, I’m not sure there’s anything fundamentally new in customization. However, states and communities continue to target industries and create programs to attract them. In recent years, it’s been all about electric vehicles (EVs), EV supply chains, and sustainability. The word “sustainability” is coming up more frequently in incentive agreements.

Amy Gerber:
I agree, Kathy. At the state level, there are two trends to watch. First, some states are aggressively pursuing certain industries. For instance, Tennessee has created new incentives for the nuclear industry, Virginia has wind-related incentives, and other states are targeting solar.

These state-level efforts often align with federal initiatives. For example, after federal funding for solar panels emerged years ago, states like Mississippi and Virginia created their own incentive programs.

In terms of advanced manufacturing, one shift we’ve seen is how states are adapting incentives to prioritize capital investment over headcount. Many advanced manufacturing facilities aren’t creating as many jobs as they used to, so states are evolving their programs to reflect this reality.

Kathy Mussio:
That’s so true, Amy. As consultants, we appreciate programs offering different qualification tracks—whether it’s a job-focused track, an investment-focused track, or a combined approach. Companies spending hundreds of millions of dollars on a project but not creating many jobs still need a path to receive assistance for that capital investment.

Andrew Greiner:
That makes sense. Both of you mentioned sustainability earlier. How have states adapted their incentives to attract businesses focused on sustainability?

Amy Gerber:
When it comes to sustainability, states are mainly targeting manufacturers of sustainable technology or products. For example, we see incentives for nuclear fusion, small modular reactors (SMRs), wind energy, and hydrogen projects. There’s also some focus on facility sustainability, such as incentives for installing solar or alternative energy systems.

I’d like to see more states get involved in attracting sustainable industries. Those projects often provide spillover benefits for other industries a state might want to attract.

Kathy Mussio:
Exactly. Companies focus on sustainability for many reasons—investor demands, private equity pressures, or customer preferences. Today’s younger generation wields significant purchasing power and tends to prioritize environmental values, which drives companies to align with sustainability goals.

Amy Gerber:
A challenge we see is a lack of available sites in markets with the highest sustainability standards. Companies often have to decide which sustainability aspects to prioritize when their preferred location lacks workforce availability or other key factors.

Kathy Mussio:
That’s right. More clients are asking about the energy generation mix at potential sites. Ten years ago, those questions were rare. Now, many clients are exploring on-site solar fields or adding solar panels to factory roofs to reduce reliance on the grid.

Andrew Greiner:
Let’s pivot to workforce development. How are you seeing incentives tied to workforce programs, especially in industries requiring specific skills like technology and manufacturing?

Amy Gerber:
States with strong workforce development programs—like Virginia, Georgia, and Louisiana—have adapted well to new skill demands. Virginia’s Talent Accelerator Program, for example, continues to grow and address evolving needs.

Other states are starting to recognize the importance of workforce programs in attracting businesses. Partnerships with universities and higher education institutions are becoming more common, particularly in sectors like EV manufacturing.

Kathy Mussio:
Amy’s right. Virginia wasn’t even on the map for workforce training five years ago, but now they’re a leader. They offer flexibility, allowing companies to choose between the Talent Accelerator route or other grant programs. This adaptability is crucial because not all companies want to involve technical schools in their proprietary training.

Some states also allow companies to tap into multiple funding sources—for example, programs for new job training, incumbent worker training, or ongoing support over a facility’s lifetime.

Amy Gerber:
That flexibility is critical, especially for startups or pre-revenue companies with small workforces. Some incentive programs require minimum job creation numbers, which don’t always align with the realities of these companies.

Andrew Greiner:
Are you seeing a shift toward incentives that prioritize creating high-wage jobs over simply generating a high number of jobs?

Kathy Mussio:
Absolutely. Communities increasingly focus on attracting high-wage, high-impact jobs. However, that can be a challenge for projects with wages below the county average or for industries like distribution, where high wages aren’t the norm.

Amy Gerber:
While it’s important to incentivize higher wages, communities also need to consider how wages evolve over time. Entry-level positions requiring extensive training may start lower but grow as employees gain skills. Wage issues often resolve themselves over time as employers adjust to attract and retain quality workers.

Andrew Greiner:
If you could change one aspect of the current economic development incentive landscape, what would it be?

Kathy Mussio:
I’d address the mismatch between when a company is ready to disclose its name publicly and when a community requires disclosure for incentive approval. Finding a balance between these timelines is critical.

Amy Gerber:
For me, it’s the timeline for incentive approvals. The process can take too long, jeopardizing real estate deals. Aligning timelines between incentives and real estate transactions would make a big difference.

Kathy Mussio:
Agreed. Adding language to protect deals during approval processes—like “but-for” clauses—would also help.

Andrew Greiner:
Timing is everything, and unfortunately, ours has run out. Thank you both for a fantastic discussion. Look for this online soon.