Harold, this is something that goes on in the US all the time, too. What's particularly disgusting are the ways in which towns, cities, etc. end up doing things like offering tax breaks and other incentives to businesses to attract them, only to have the businesses leave. At least if you've invested in your talent and your infrastructure for keeping talent, if a business leaves you still have that. But when you give tax breaks, you have nothing to show for it but empty pockets.

One of my personal dreams for a project would be to see an area focus first on its people--on helping them identify and develop their talents and then marketing that to businesses. In this idealized world, they'd also provide citizens with the infrastructure to be successful in a global economy, like wi-fi, etc. As you say, business as usual will not be an effective solution.