Companies have been making some interesting site selection decisions lately. IBM Corporation's recent announcement to locate a new global IT services delivery center in Columbia, Missouri, certainly turned some heads. Why would this global technology innovator opt to create 800 new technical-professional jobs in a mid-Missouri town with a population of 100,000, instead of tech-heavy cities like Palo Alto, Boston or Austin?
"We selected Columbia for our newest facility based on several criteria, including the strong public-private partnership with the state and city, a competitive business model and the talent and skills that Missouri and the Midwest have to offer," stated Tim Shaughnessy, senior vice president for service delivery with IBM Global Technology Services.
IBM will benefit from small-town real estate pricing while gaining access to the I-70 corridor in a direct route between Kansas City and St. Louis as well as close proximity to the University of Missouri. But while a lower cost of doing business, an established infrastructure, and workforce capacity are necessary to attract businesses to a region, as IBM's Shaughnessy made clear, strong public-private partnerships can be a huge lure.
Economic developers realize that a mix of industries as well as companies large and small is necessary for a region to be balanced and economically stable. They recognize that sustainable economic development comes from meeting the needs of both corporate behemoths and entrepreneurial start-ups because neither can survive in a vacuum. To that end, public-private economic development entities are taking more initiative to connect businesses. They are culling strategic relationships, introducing companies in the supply chain to growth prospects, and enabling them to understand one another's needs, capabilities and resources. Strategic partnerships among manufacturers, suppliers and other subcontractors can result in more than just the development of a geographic industry cluster. It can mean the creation of an entire supply chain network in a region, which translates into tangible savings of money and time, while also supporting start-ups and small-to-mid-sized companies.
Within the context of strategic partnerships, another economic development trend is the extent to which the private sector is partnering with universities. Academic institutions, once walled off from the business world and considered more as suppliers of an educated workforce, are collaborating with companies at an increasing level. Just weeks ago, Pfizer and Washington University in St. Louis signed the Orphan Compound Research Agreement, a joint research project for which the pharmaceutical corporation has pledged $22.5m over the next five years, to discover new uses for existing or discontinued Pfizer drugs. By teaming up on drug research, scientists at Washington University's School of Medicine will have access to more than 500 pharmaceutical compounds, while Pfizer hopes to see new uses of the company's drugs made available more quickly to patients.
Progressive public policies are another economic development resource being used in increasingly creative ways. A good example is in renewable energy, where green energy standards and mandates can help to create new markets.
It might surprise some to learn that Louisiana offers one of the best solar incentives for homeowners in the nation. Until recently, however, homeowners in Louisiana who wanted to take advantage of the 50-percent state tax credit (plus 30-percent federal tax credit) found themselves on a long installation waiting list because there were only two solar installation companies in the entire state. Louisiana-based South Coast Solar, in partnership with Delgado Community College, and nonprofit Louisiana CleanTech Network added training courses around the state spurring the creation of over 40 solar installation companies, with over one-third of the trainees being attracted from other states.
Likewise, states that enact renewable energy policies can encourage growth of industries like the wind-power sector-not just in the creation of wind farms but also manufacturing activities that support generation facilities. Missouri has established a Renewable Energy Standard that will require 15 percent of the state's energy to come from renewable sources by 2021. The Show-Me State touts a potential wind-power capacity of 5,960 MW. The state has the 14th-highest average U.S. wind speed and has more than 2,500 square miles of land with commercial-grade wind resources. Missouri is home to private investment company Wind Capital Group, as well as ABB, a leading power and automation technology group, and other manufacturers of wind turbines and components to create a wind-energy supply chain that spans the state. Already home to the first 100-percent wind-powered community in the nation, Missouri, which wasn't previously perceived as a wind-energy state, is poised to emerge as a domestic force in wind energy.
In an effort to spur economic recovery, states are working harder than ever before to attract businesses and spur economic growth. Regions that can tout a lower cost of doing business, progressive policies, a skilled labor force, robust infrastructure, and that are keen to building strategic partnerships-whether business-to-business or public-private-will be well situated to turn the heads of new investors.
And just as economic developers are becoming more entrepreneurial in attracting new businesses and spurring growth, it will be forward-thinking companies-those open-minded to discovering that the best location for the new investment just might be in a place where they least expected it-who are best positioned for success in the coming years.
Source: Missouri Partnership
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