Incentives have become big business.  As their use has expanded, they are no longer just deal-winning tools to be deployed occasionally but sophisticated finance mechanisms used to support many types of economic activities. The best economic developers are also using more sophisticated methods to determine how and when to use these incentives effectively.  

That’s why we have developed the Smart Incentives 4×4 framework to help communities make the best decisions throughout the incentives process. 


 Our four core principles are that a) we use specialized data and analytical tools to support decision-making throughout the incentives process, and b) we help the economic development profession prepare for greater transparency and accountability in the use of incentives.   

We apply these principles to the four different stages of the incentives process:

  • Recipient – As you begin the negotiation, have you done your due diligence on the company applying for incentives?  Are you prepared to explain your decision to your community?
  • Deal – Are you confident you have negotiated a good deal that is likely to generate real benefits for your community? Can you justify this deal to your board, elected officials, and your community?
  • Compliance – Once the deal is signed, how will you know if the company has complied with the incentive agreement and met its commitments to your community?  Can you answer questions on individual and program compliance rates?
  • Effectiveness – Do you know if your incentive programs have helped your community achieve its economic development objectives? 

We believe that incentives should be used to accomplish community goals – not just win a deal.  The problem is that we haven’t had the data to let us know which incentive packages and programs actually help our communities. Smart Incentives works every day to provide state and local governments the data and analytics they need to identify what works and to enable sound decisions when awarding incentives.