Chris Steele is the COO and North American President for Investment Consulting Associates and has twenty years of domestic and international experience in site selection and economic development. Through his positions at Ernst & Young, TranSystems, and in his own firm Chris has experience with industries as diverse as aerospace, bioscience, food manufacturing, logistics, and financial services. His client list includes Biogen IDEC, Lenovo, Boeing, Atlas Copco, BC Hydro, Boston Technologies, the Allegheny River Towns Enterprise Zone, and First Industrial Realty Trust.
The Most Important Factor
“Please rank the following factors in order of their importance in making site selection decisions:”
Every site selector has received surveys that include some form of this question dozens of times. Whether asked by industry magazine polls of by economic development agencies as they try to self-assess, the survey tries to determine the rank ordering of factors such as availability of a trained workforce, cost environment, logistics infrastructure, and quality of life.
Certainly, this is intended to help communities understand how to evaluate their own strengths and weaknesses as they try to attract new business and investment to the area. They need to know what companies value in order to figure out how to meet those needs. A determination of “the most important factors” should get that, right?
Unfortunately, the question is terribly and dangerously flawed.
First, the answer isn’t the same for everyone. Different industries have different need profiles, and even within – for example – the biotech industry, research and development has very different needs from manufacturing or from office-based commercial support. In addition, specific companies will have different needs depending on the point in their corporate life cycle, their own internal culture, or even the individuals within the company who have been tasked with undertaking the site selection decision.
Second, even if a community has “the most important factor” covered in spades for a specific industry or use type, it’s no guarantee that the match between business and community is a good one. Location decisions are complex, multi-faceted decisions. Many factors need to line up correctly for the match to work well.
Using the well-trodden metaphor of buying a home, most families choose a neighborhood which provides access to good schools AND a comfortable setting AND access to shopping AND which they can afford, and even these constructs mean different things to different families. The same goes in spades for companies as they make location decisions.
Deep, wide-ranging conversations with companies and their consultants are a much more effective method for determining what drives corporate location decisions. By engaging local companies, industry executives, and location professionals in deep discussion, communities can get much more nuanced and useful information to guide their strategy than a survey ever can. A survey can reveal that 80% of a population finds access to talent or markets are critical, but it cannot explain what the respondent means by access to talent or markets, or why they have that need.
A deeper and more inclusive understanding can also allow communities to better understand the tradeoffs that companies need to and are willing to make as they evaluate their own competing (and dynamic) business needs. By investing in developing this understanding, communities can become incredibly valuable allies in building sustained success for their current business base as well as being an informed partner for companies who might consider investing in that community.
In short, the most important factor in the location decision is a community who is willing to try to understand the whole story.