Transcript Ramp Up the ROI in your Research

North Carolina Association of County Commissioners
Economic Development Symposium
April, 2014
Kate McEnroe Consulting
(770) 333-6343
[email protected]
www.katemcenroe.com
Don Schjeldahl Group
(828) 772-9374
[email protected]
www.donschjeldahlgroup.com
The Goal: build a stable/prosperous community
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People have good paying jobs
Ebb and flow of the local economy favors a
steady flow of new investment
Families are healthy and safe
Wealth is being created at all levels
Infrastructure is modern and well maintained
Government is recognized as a productive and
valuable member of the community team
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Our assignment is to answer these questions:
What is the county’s role?
Create conditions within which the
right businesses can prosper
What part of this can I
influence or control?
County leadership is positioned to
shape cross-jurisdictional efforts
that are a backbone of stability
What are the “right
questions” I should ask
back home?
What is possible? Where are we
weak and what can we do about it?
What resources are
available to help me and
my county?
Economic development is a well
understood art – tap the experts
and follow their advice
What relationships should I
build or foster?
Build broad based coalitions –
business, education, non-profits,
government
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21 Years doing site selection and economic
development consulting as a sole proprietor
7 Years prior with PHH Fantus Consulting
Back in the mists of history - ◦ Corporate site selection client and implementer
◦ Corporate line manager
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Based in Atlanta and Chicago
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DonSchjeldahlGroup - corporate location
selection/economic development best practices
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30+ years experience in corporate consulting
with The Austin Company of Cleveland, OH
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300 consulting assignments for manufacturing,
distribution, offices for many industries
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18 months as Site Coordinator on Sierra Nevada
Brewery project in Henderson County
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Experience in urban/rural areas throughout
North America, Europe, Mexico
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Offices in Kent, OH and Hendersonville, NC
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©Kate McEnroe Consulting 2014
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Each Phase of Site Selection Process
Eliminates Communities
Strategy
Development
Location
Investigation
Due
Diligence
Long List
Regions
Favorable
Region
Typical
Project
Timeline
6
months
Short List
Cities/Sites
to
24
months
Incentives &
Implementation
Selected
Community
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Complexity of Location Decisions
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Accelerated Schedules
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“Right-shoring” including “Re-shoring”
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Enhanced Supply Chain Management
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Shortage of Skilled Workers
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Strategic and Tactical Alignment with Clean
Technology / Sustainable Practices /
Advanced Manufacturing
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Old
Paradigm
New
Paradigm
Changing Balance of Location Decisions
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What does or doesn’t happen
with state economic development
is important
AND
it isn’t
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How Big is the Market?
Market Segment
(Annual Sales)
# of
Companies
Frequency of Major
Investment Decisions
Annual # of
Projects
Originating in
the U.S.
Fortune 500
(>$5 Billion)
500
4 projects per year
2,000
Midsize Companies
($40 million to
$5 billion)
10,000
1 every 4 years
2,500
100,000
1 every 10 years
10,000
Entrepreneurs*
(<$40 million)
Total
110,500
14,500
* You don’t have to look far - there are
entrepreneurs in your community
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5,789 Total Projects reported
21% New Manufacturing
34% Manufacturing Expansions
223 in North Carolina (4%)
 45 in Metro Charlotte
 35 in Metro Greensboro-High Point
 Metro Raleigh not broken out – not in top 10 national for
size group
488 Nationally in Micropolitan Areas (8.4%)
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Where New Investments are Going
• Projects destined for off shore:
• Low cost manufacturing, global networks
• Projects destined to stay domestic:
• Serving the local market - beverages, fresh
foods, packaging, building materials.
Entrepreneurs emerging from community.
• Projects up for grabs (10% of all projects?)
• Auto parts, chemicals, health care products,
renewable energy products
• Foreign direct investment in North America:
• Asia, European manufacturing
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About 30% of projects are by consultants
50% of projects start by looking for an existing
building
50% of the projects we represent don’t do what
we advised
Most new jobs will come from existing
businesses
There are many people in your county who need
jobs that your target industries won’t provide
A big investment announcement could make you
less likely to be chosen for another in the short
term – the smaller you are the truer this is
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1. Public/Private Leadership with well Defined
Community Vision
2. Established ED Process, Adequately Funded,
Supported by Community
3. Focus on Assets/Capacity Building
 Community
 Real Estate
 Culture
4. Staying Power – it’s a marathon not a sprint
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Business Climate
(Gov’t Services. Politics,
Regulatory Environment)
Taxation
Incentives
Business
Costs
Workforce
Talent, Pipeline,
Education
All Factors Working
Together Create a
Business Friendly
Environment
Living
Environment
Infrastructure,
Transportation,
Utilities
Real Estate
Financing,
Venture Capital
Research,
Knowledge &
Innovation
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1. Public/Private Leadership with well Defined
Community Vision
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Be inclusive – involve all corners of the community
Know your community – strengths and
weaknesses
Target industries based on community assets
(existing and developable)
Have a strong business retention program
Engage in education resources & workforce
development
Have a sustainability plans
Marketing collaborations
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2. Established ED Process, Adequately Funded,
Supported by Community
Strategy
Development
Location
Investigation
Due
Diligence
Incentives &
Implementation
Organization/Funding Model
There is no one formula that
is best. They all can work:
 Public versus Private Money
 Multi-jurisdiction
cooperation
 Multi-year commitments
 Endowments
HIRE PROFESSIONALS &
ENGAGE ON PROCESS
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3. Focus on Assets/Capacity Building
 Infrastructure
 Workforce
 Real Estate (sites, buildings)
 Community (e.g. downtown)
 Parks/Trails – Outdoor Culture
 Coalitions/Team Building
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Community responded
immediately to info requests
Available site CAD file facilitated
client’s site analysis
North Carolina’s program is
“due diligence” oriented.
Latest programs are more
comprehensive, incorporating
workforce, training, and
sustainability factors.
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Evaluation Factors
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Schools
Housing
Sewer plant
Abandon
buildings
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Downtown district
Government offices
Streetscape
Parks / Trails
Outside storage
Economic development offices
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Site Selector Labor Interview:
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ED organization must be able to demonstrate
they are well connected to private sector
employers.
• Know what they do
• Aware of challenges and how the community
can assist
• Employers are involved in community
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4. Staying Power – it’s a marathon not a sprint
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Look for results in the long term
Think global – everyone else is, then act
locally to make yourself better
Stay current with the changing needs of
your community - challenge conventional
thinking
Business is apolitical – leave ideology out
of the ED equation
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Every jurisdiction does not have to engage in
separate outreach activities (at least not for
our sake!)
In hiring, balance the value of an internal
network and skills versus an external network
and skills
At some point, you have to leave town to
market
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How many project opportunities exist at any
given time
How individual projects weigh site selection
factors
Getting the state to bring a prospect to your
area who doesn’t ask to see it
Your area’s labor costs
The time between engaging in marketing
activities and having a live project to pursue
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Mitigate risks (real or perceived) by
addressing issues head-on
Beer – The Case Study
The Project
• Sierra Nevada - founded 1980 Chico, CA. Brewers of craft beers of
distinction. 30 years of continuous growth. 6th largest brewer in the U.S.
• Classic Location-Allocation Challenge:
• Serve a growing market while
reducing operating costs
The Methodology
• Macro Analysis: Supply chain study narrows search to region of best fit
based on operating costs (primarily transportation) & customer service
• Micro Analysis: Property/community study identifies
candidate cities
Analysis
The
Analysis
• Macro Analysis:
 10 states east of the Rockies studied under different assumptions
mostly centered on supply chain issues
 Selected ‘Mid-Atlantic’ strategy centered on Virginia, North Carolina,
Eastern Tennessee
• Micro Analysis:
 Over 100 communities in initial screening under several sets of
search criteria – differing on things like population, culture,
community assets
 10 cities field investigated involving a minimum of three visits
including at least two visits by client team
 3 finalist cities – one in each state. All viable candidates
• State, regional and local ED played integral role in project – start to
finish
Ferncliff
Industrial
Park
Mills River
(Henderson
County), NC
Location Decision Drivers
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Food grade utility infrastructure – quality, capacity, reliability, cost
Community - attractive, engaged, inclusive, future looking, 1st class ED
Sustainability – broad adoption sustainability in region
Site – certified, planned, attractive, plans in place to overcome challenges
Labor force – quality, availability, training resources
Incentives played a role but didn’t drive the decision
County’s role?
Create conditions for success. Provide vision/leadership to
citizenry, invest in infrastructure, streamline process, leverage
collective influence
What can I
influence?
Continuity/consistency of economic development efforts,
adequate infrastructure for industry targets, inventory of sites
& buildings, workforce trends, harmony of vision
The “right
questions?
Are my metrics effective and reasonable? Are my targets
actionable or are they aspirational?
Resources
are available?
Is my staff appropriate and appropriately supported? Is my
funding source sustainable?
Relationships
to build?
Private sector employers, stakeholders, other counties, regional
organizations, subject mater experts, state agencies (ED, DOT,
DENR)
Kate McEnroe Consulting
(770) 333-6343
[email protected]
www.katemcenroe.com
Don Schjeldahl Group
(828) 772-9374
[email protected]
www.donschjeldahlgroup.com