Microsoft and Google Overstate Job Creation at Chile Data Centers

Isn't that the case for a lot of these corporate welfare programs?

> A firm announces a plan to build a new facility, but where? Local and state development officials compete to attract the firm with ever-more-generous tax breaks and subsidies. This scene plays out again and again – even though research shows that incentives do not substantially influence firm behavior, even in the face of media exposes about wasteful giveaways. Why? Governments hope to encourage jobs and business profits, and hubris leads officials to believe “this time will be different,” even if incentives have not worked before.

> But something more pervasive is also at work. My research with Stephen Ellis demonstrates the role of “business climate” in driving economic development professionals and government officials to engage in an incentives arms race. Officials feel they must offer incentives, because failing to compete to attract businesses will be interpreted as evidence that their locality is not business-friendly. States and localities will therefore continue to compete, to the point of giving away more than the value of the new firm or facility. Can American citizens find ways to prevent the negative effects of this no-win arms race?

I think there was some kind of corruption as to how they get to just repair bikes without giving me anything. I've been a local for way longer than these people.

EDIT: And yes, they do get government money. SF has a city program to encourage local businesses or something so they get grants. Besides all businesses are eligible for SBA loans and no one asked me if they should be.

even housing produces far more economic activity than a shed full of servers

So the industrial factory tax break model often did pay off. Data centers are selling the same story: give us tax breaks for big expensive capital investment and regional prosperity is yours. They often lie about even the direct number of jobs. But the implied regional advantage is definitely dead when it is all cloud and zoom, rather than widgets and happy hours.

Compare that to most other industries where you have pollution, noise, truck traffic, low paying and neck-breaking jobs, need import/export ports, etc. The footprint of datacenters is rather low.

Most countries have a sh%t ton of space and some have lots of water (ie: Chile). There is little reason not to have them.

I'm not in favour of giving the smelter owners a sweet deal but I believe there is some nuance which is lost in your comment.

When you say subsidize I assume you're talking about the price the smelter pays for electricty (I'm not aware of any direct subsidy).

Until about 2022 the transmission lines out of Manapouri heading north could only handle a part of what Manapouri could produce, other lines headed towards Tiwai Point to feed the smelter with the balance of Manapouri's output. This meant that negotiating electricity prices with the smelter owners was tricky because it was perfectly clear that there was nowhere else to take the electricity. In the past five years more capacity has been added to allow electricity from Manapouri to reach the National Grid and so, I presume, this significantly dilutes downward price pressure from the smelter.