Economic development trends impacting location decisions
By Allison Gilbreath, VP of Business Development
“I can see myself living here.”
When was the last time you felt drawn to a place you visited and had this very thought? For economic development professionals, this is the feeling we aim to invoke as company executives visit our cities, regions and states in search of locations to build new technology hubs, manufacturing plants and research centers. In a time when the corporate landscape is rapidly evolving, savvy decision makers are asking, “Can I see my company operating here?” And more importantly, “Is this a place where my employees want to live?”
Favorable economic conditions, technological advancements and increased workforce mobility has led to historically low unemployment and a marked shortage of skilled workers – a phenomenon that has been intensely scrutinized and fervently documented in recent years. This overall tightening of the labor market has had a ripple effect on the economy including a seismic shift to the way companies invest in new markets. The reality is an environment where workers are no longer compelled to follow companies to new geographic areas; instead, companies follow workers.
As companies evaluate markets to accommodate future growth, a comprehensive assessment is performed in each area analyzing location-specific data such as availability and access to labor, operating costs and quality of life indicators. In recent years, early-stage research efforts have become increasingly complex as companies seek to better understand the cultural identity of candidate locations.
At a minimum, companies will collect information about public transportation and light rail options, arts and cultural amenities, entertainment corridors, recreation areas and community sustainability. Diversity initiatives are also being addressed earlier in the due diligence process. What actions are being taken to create an atmosphere where diversity is celebrated and inclusivity is encouraged? What specific programs and resources are in place to support these concepts?
The reality is an environment where workers are no longer compelled to follow companies to new geographic areas; instead, companies follow workers.
This shifting paradigm, effectively prioritizing employee wellbeing and happiness, may represent an act of altruism for some companies. But for the majority, it is an act of survival. As the technology revolution rages on and the fight for talent intensifies, companies recognize the need to adapt and evolve in order to accommodate their most valuable asset – workers.
To remain a competitive region, we need to adapt. Ten years ago, touting a low tax, low cost environment may have been a successful approach to luring companies to the region. Today, this strategy alone falls short. While a location must make sense for a company from a cost perspective, it must also meet the livability standards of the workers it aims to attract.
As economic developers and public sector leaders, it is our duty to ensure Greater Phoenix is a place that meets these standards. By expanding upon intentional planning efforts and actively seeking creative opportunities to add character and foster a sense of place, we are doing our part in building an inclusive, healthy, functional region equipped to meet the needs of 21st century workers.
As long as Greater Phoenix continues to embrace these positive changes, I can see myself living here.