by Bill Golden
When is a cloud just a dream — rather than a savory Apple pie?
Apple invested $300 million to build a cloud center at an internet and highway crossroads in North Carolina. The dream was that the cloud would bring jobs and growth to a community hard hit by foreign competition.
Certainly the cloud makes for a good enabler of telework and can help lower costs for businesses that are information-intensive.
There are costs, however. Local investments in such technology does not mean that there will be local jobs.
Apple got a $46 million state tax break in North Carolina to build one of its new cloud centers. The promise was that at least 250 jobs would be created.
So far the actual job count is perhaps 50 employed, or $920,000 in tax breaks per job. Combine state tax breaks with a local 50% reduction in Apple’s property taxes and it soon seems that Carolinians are paying their own wages via statewide taxes to work at the Apple cloud facility.
The future of jobs as one industry analyst frames such investments: “… in the newer digital economy, capital investments that a generation ago would have created thousands of new positions often equal only a handful today, with computers and software processing the heavy lifting while the key programming is often done by engineers back in Silicon Valley.”
The cloud also is a two-edged sword. So while the cloud enables telework and can help lower costs for businesses that are information-intensive, it can also be the vehicle for transferring work to whereever the work can be done at a lesser cost.
For communities such as the one in North Carolina that hosts the Apple cloud facility, the cloud may well cost them more jobs than it will create unless they find a way to harness the power of the cloud rather than just have it live in their backyard while paying for its existence through tax credits and lost state tax revenue which they will pay through other forms of taxation.