AS I SEE IT: The Changing Role of Regions and States in Economic Development By Janet Ady, President/CEO Ady Voltedge

In the not too distant past, nearly all site selection projects started by contacting the state.  Based on research conducted by Ady Voltedge and our own site selection project experience, we estimate that site selectors most frequently make their first contact at the regional, not the state level.  In fact, often times are initial analyses also beginning at the regional level instead of at the state level.  There are a couple reasons driving this shift:

• First, site selectors have access to data they require at the MSA, and even county, level.  It is just as easy for us (sometimes easier) to screen 374 MSAs than the 48 continental United States.

• Second, the regions have an advantage in that they can serve as a single point of contact for us if we are looking at multiple communities and properties within their region, which we often are.  They have more knowledge at the community and property level than the state does, and they can serve as point person so that we don’t have to deal with each community or property owner until we get down to the finalists.

• Third, the regions usually better reflect actual workforce commuting patterns, and hence labor sheds, which is a more meaningful universe for us to look at than either a statewide view or a county level view.

• Fourth, and related to the above, we often see big differences in assets and hence target industries between regions.  It only makes sense to focus on those regions with assets that fit the industry of the project we are working on, rather than lumping all regions of the state together.

Now, of course, we are not saying that States do not play an important role, or that they are not involved early on.  States are still the originators of many incentives, and can also help facilitate in many other aspects of site searches, such as shepherding RFIs/RFPs throughout their constituencies.

And we are also not saying that the local EDO and municipality is not important.  Of course, in the end, all economic development is local, and our search will eventually point to a specific property in a specific local jurisdiction.

Our point is that, more than ever before, we’ve already done several levels of research before the State gets involved; and sometimes the State is engaged after the Region.  And as regional groups continue to grow in effectiveness of their marketing, this trend will continue.

Implications for EDOs:

• If you are a region, understand your assets and what industries you should target.  Know your competitive business case in each of your target industries inside and out. Don’t try to be all things to all people.  And focus your marketing activities and messages for the greatest return.

• If you are a state, continue to develop relationships with site selectors.  Work with your regions to educate them on how to prepare and respond to inquiries. Provide them with access to tools (sites and buildings databases, for examples) that will help them represent their region and the state well.

• If you are a local or municipal EDO, work very hard to create a strong relationship with your region.  Treat them as a customer who brings you leads.  In that context, work to stand out among your peers in terms of readiness, professionalism, and properties.

Implications for Corporate Location Strategy:

• Don’t assume all regions of a state are the same; recognize that different areas have different strengths. An ideal location could exist in a state that, as a whole, may not seem attractive for your operations.

Did you find this information helpful? Do you want to know more? Contact Janet Ady at (608.663.9218) or sign up for our newsletter to stay up to date on economic development trends.

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