Many would consider the dawning of 2016 and its looming economic development landscape as a “brave new world.”
The world of 2007 is gone. Funding for projects is available, but, in most cases the criteria has become more competitive and challenging. Coupled with process driven changes, public attitudes and the influence of conservative elements of communities makes government incentives and financing a trial by fire.
So what other factors are emerging on the horizon? Here are but a few:
- Corporations have cash but employment is only gaining ground slowly.
- Commercial real estate acquisitions are at slow or stop.
- The shift from making things to information and services is accelerating.
- Cities are seeing populations and workforce shrinking as the retirement of baby boomers accelerates and young, tech driven professionals look for greener pastures.
- Federal and State governments are sending less to local jurisdictions.
- Economic development and business assistance has been cut or is no longer available.
- $30+billion in Federal low interest loans for small and medium sized companies were available but local banks won’t access the program and businesses won’t apply.
- Most, not all, traditional economic development organizations are operating on models that were designed in or before 2007.
Jason Jennings probably summed the current state of economic development marketing it up best in the title of his book: “It’s not the big that eat the small, it’s the fast that eat the slow.” Today, communities need to be taking stock of their assets and ramping up the marketing machine.
There are daily announcements of the Federal and State Governments cutting dollars to communities. Message- it’s trite, but they’ve moved the cheese.
First, Real Estate– The focus of commercial real estate is shifting focus to the needs of smaller firms employing fewer than 50 people. Job growth, in this sector is outpacing larger firms by nearly five to one, according to Emerging Trends in Real Estate® 2016, co-published by PwC US and the Urban Land Institute (ULI). This is creating disruption in the office sector as it finds ways to create new space models to accommodate these employers.
Second, Access to Expansion & Relocation Leads– Site selectors command a respectable market share, but, like everything else, things are changing. Techniques are available that can sort through piles of raw information and data to identify companies that are showing signs of expansion.
Third, The Marketplace– Now is an exceptionally good time to take your community to market. Why? Because there is almost no completion there. What better time to approach a potential expansion or corporate relocation than when your community is one of the few ready to cut deals.
Fourth, The Cost of Marketing– Providing you have your marketing materials, data bases and social media integrated, marketing can be affordable and very cost effective. There are more and better tools available to local economic development efforts and governments than ever before. The questions are is does anyone on staff have the knowhow and will to use them?
Fifth, the Labor Pool– Unemployment is coming down but a very slow rate. Details and metrics of the local workforce is limited and for the many instances unknown to much of the economic development community. The workforce in local communities is not organized for mobilization or ready to be marketed. Far too much reliance is being placed on job and worker matching by State and Federal agencies.
The Bottom Line
So what is the end game for all of these terse comments?
- Communities must have a full command of all of its real estate assets- retail, commercial, industrial and unimproved land.
- Communities must have real time perspective of the infrastructure that service its business mix, plants, sites and parks.
- Communities must have developed, or retained, the ability to access in depth data on industry trends, analytics and workforce data.
- Economic development staffing must know how to do more than answer the phone and send out brochures. Pro-active and personalized outreach is essential. That means understanding the dynamics of site selection and how to work deals beyond forwarding the inquiry to the listing broker.
- Marketing materials must be fully integrated and utilize a multi-channel, cross platform approach to putting local plants, sites and parks before potential client companies.