Infrastructure & Cities

FedEx in Memphis

January 19, 2011

Global

January 19, 2011

Global

With around 30,000 employees in the Memphis area, FedEx is the city's largest private sector employer, while the cargo shipped by the company from Memphis International airport makes a big contribution to the airport's economic impact on the local economy (an estimated US$28.6bn in goods and services and US$8bn in total wages earned in 2007).

However, Fred Smith, FedEx Corporation's chairman, president and chief executive officer, maintains that businesses support cities through more than wealth and employment generation. "Businesses should offer their particular expertise to the city at large and to segments within the city," he says. "We're logistics experts, for instance, so we can share our expertise with any company trying to move goods, including non-profits such as food banks and agencies providing disaster relief." In turn, Mr Smith says, cities need to offer

incentives to make it attractive for companies to locate or do business in them. He cites sales tax exemptions on new equipment, tax moratoriums on land or capital improvements, tax incentives for industrial investment or the creation of jobs, tax exemption to encourage research and development, and accelerated depreciation of industrial equipment. Cities, he adds, can also provide bond financing and loans for construction and equipment.

Beyond such business incentives, however, Mr Smith stresses that quality of life—good schools, safe neighbourhoods, cultural opportunities, reasonable living costs—is critical in attracting businesses to a city, fuelling the local economy, which in turn generates more jobs and attracts more businesses. "It's a restorative cycle," he says. "Ultimately, you have to have both good economics and good quality of life. They feed each other."

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