14 Jan 2014

The Changing Requirements of Site Selection for Economic Developers

Anatalio Ubalde is an economic developer, entrepreneur, and inventor. He works with organizations throughout the nation to foster enhanced economic development strategies using Internet technology. His work in geographic information systems, economic development and the Internet has been featured in The Wall Street Journal, Bloomberg BusinessWeek, Forbes, Fortune, The New York Times, TechCrunch, and Inc. In 2009 he was named a Fellow Member of the International Economic Development Council for achieving exceptional stature in the field of economic development.

Site selection processThe globalizing economy and the growing importance of technology is fundamentally altering the requirements of an effective site selection decision. As site selector Jim Blair, Managing Director of GACC South Services described in a recent interview, there are new challenges and obstacles for businesses and the communities that want to attract their investment.

Here is a quote from Blair in that interview [emphasis mine]:

“First of all, the timeframe for the entire site selection process is much shorter now than it used to be; we have to evaluate a tremendous number of options in what’s usually just a couple months. Secondly, I'm dependent on states, communities, and chambers of commerce across the country to provide me with good, accurate information regarding the sites they have available, the qualifications of their available workforce, tax rates, incentives and so forth. Of course, these states and communities are working hard to attract new business, so they make a point to offer up highly competitive data. And then there’s the age-old issue of the "Chamber of Commerce message": It never rains here and life is perfect! My biggest challenge is verification of their information; I have to weed out the superfluous marketing statistics and zoom in on the essential figures. When I present site options to my clients, I want to make sure I've performed due diligence and corroborated all of the facts.”

Key take-aways for economic developers:

1. Site selection decisions are happening even faster than before. Bob Ady wrote about this trend in Forbes back in 2006, pointing out that site selection decisions are being made in a couple weeks instead of several months. This trend is clearly continuing and compressing decision-making. For economic development organizations (EDOs) to position themselves to take advantage of this trend requires that they move at the speed of business by providing the information and resources to be considered for a long list and then the short list. If your EDO doesn’t provide the information needed in the process, you are likely to be eliminated if the speed of the decision requires friction-free information gathering. Like every other industry and person, people do their research online. Within this context it will be increasingly important for EDOs to be found as communities that meet the site location requirements of businesses and the online platforms that help connect businesses with communities that match their requirements will grow in importance.

2. Accurate data is essential. Bad data leads to bad decisions; businesses, corporate real estate professionals, and site selectors are dependent on local communities to provide them accurate data. More and better data is essential for modern business decision-making. EDOs lacking enough quality data, or data that is incomplete or even a little outdated are providing sub-standard information that will be viewed as deficient by businesses and their advisors making business decisions. It is within this context that GIS Planning advises and provides our EDO clients with demographic, industry, business, and geographic data that is updated at least 1 to 4 times each year and is accessible through their websites.

3. There is a competitive race between communities/states to provide quality/deep data. The competition between communities continues to become more aggressive as they fight for business investment that can bring new jobs. The new battlefield for competition is the fight to provide more and better data to help companies make the business case for why investing in their EDOs’ community is a sound decision. So EDOs are recognizing that summary community demographic data or old US Census data reports are antiquated and put them at a data disadvantage with other EDOs that provide robust and interactive data that is deep and broad. However…

4. EDOs promote positive data but businesses need the cold-hard facts. Site selection advisors have to cut past the “it never rains” data that EDOs believe put them in the best light to get to the relevant data for their business. EDOs that promote highly biased or questionable information are going to be less trusted, which will hurt their relationship and effectiveness for wining investment. This is why reliable third-party demographic, industry, and geographic data is so critical to helping businesses convince themselves that growing their business in your community is necessary. 

Modern economic development organizations striving to win in the new global competition for investment attraction must respond to these new challenges facing businesses and site selectors. Similarly, they must also respond to the obstacles companies are experiencing as they research and evaluate business investment locations. Providing more, better, accurate, and trust-worthy data to businesses online provides a compelling way to out-service other states and communities in a competitive economic development marketplace.


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