Why Base Employers Choose One Location Over Another
A community is not judged by potential employers solely by how a community is operating today. Companies also consider where the community is going. Is it taking care of existing companies? Is local government efficient, professional, consistent and graft-free? Is the community investing in education and basic infrastructure?
The environment to attract good paying jobs has been increasingly competitive over the years and has been impacted by the Great Recession of 2008-09. The number of domestic facility sitings was down 53% from 2008 to 2009. Only 4 percent of those came to mountain states (CO, ID, MT, UT, WY). And the companies that were planning to expand had smaller projects. Recent concerns cited by corporate decision makers include rising energy costs, intensifying global competition and compressed time to market.
There are many others factors upon which company owners and executives base their site and facility planning decisions. The following table ranks those factors. It is from the 24th Annual Corporate Survey conducted in 2009 by Area Development Magazine.
Respondents were asked to rate the factors as Very Important, Important, Minor Consideration or Of No Importance. Thirty-five factors were rated, then categorized as ‘Site Selection Factors’ or ‘Quality of Life Factors.’
According to this survey, cost of doing business in a particular community or region is still the most important factor to companies looking to site a facility. In fact, seven of the top-10 ranked site selection factors are directly or closely related to cost of doing business in a community, including:
1. labor costs
2. tax exemptions
3. energy availability and costs
4. availability of skilled labor
5. occupancy or construction costs
6. state and local incentives
7. in-bound, out-bound shipping costs
The advantage goes to communities that can make the business case.
As noted elsewhere in this brief, all communities, including Fort Collins, tout their great quality of life. Yet, quality of life factors didn’t make it into the top 10 factors important to the people actually making decisions about where to locate their business operations. The top-ranked quality of life factor is ‘low crime rate’ at 11thoverall with recreation (presumably including such things as biking, outdoor recreation, open space, etc.) ranking 29th overall.
This is not to say that quality of life is unimportant. Those of us already in the community highly value our outstanding quality of life. The point is that we overvalue it as the economic development strategy for our community.
