The economic development field is more intensely competitive than it’s ever been, and that trend is going to continue. Competing successfully starts with an understanding of your location’s economic assets.
The drivers for this megatrend:
- First, the economic development field is maturing. It’s no longer a fledgling field; today, it’s a bona fide professional industry. Most of the 3,000+ counties, boroughs and parishes have an economic development function, let alone the states, regions, and tens of thousands of communities, many or most with an economic development function.
- The increasingly sophisticated tools and analyses that site selectors use today requires that ED professionals be at the top of their game to compete.
- The pool of relocating companies – especially the big whales – is relatively limited, so there’s more competition for a relatively small set of prospects.
Implications for EDOs:
- This will sound counterintuitive as we’re talking about site selection and business recruitment, but the first implication is for EDOs to have strong business retention and expansion (BRE) programs. Why? Two key reasons:
- First, your BRE program is your best defense against a competitor’s business recruitment program.
- Second, how your treat your current businesses is the best indicator of how you may treat a business that relocates to your community.
- A second important implication is that you absolutely have to understand your value proposition. It’s not only not a benefit anymore, but it’s actually a detriment to say that your location is a “great place to live, work and play!” without any further substantiation. Search on google for that term, and you’ll get nearly 600 million responses. My point is, you have to dig deep to answer this question: What industries or companies would find the greatest value in the particular mix of economic assets that we have at our location? Ady Advantage helps its clients answer that question through our reverse site selection process.
- Another implication is that companies are going to be increasingly likely to (try to) conduct site searches directly. Consider the case of Stone Brewing (and congratulations to Richmond, Virginia). They posted their RFP via social media and got hundreds of responses for the eastern US expansion. Great news, right, in terms of democratic access to a good-sized project? Well, it also means that hundreds of other EDOs are likely aware of the opportunity and may be competing. Which means this: You have to really understand what projects are a good fit for your location, because you won’t have the time to go after everything.
As I see it, those EDOs that understand their competitive positioning are going to be the ones that are winners based on how the competitive environment is changing.