cws business attraction for edac
DESCRIPTION
Innovation in business attraction presentation given at Vancouver EDAC/EDABCTRANSCRIPT
Investor TargetingBringing Your Strengths to the Location Selection Game
EDAC/EDABC 2009 CONFERENCE
September 22, 2009
CURRE
The Reality of NowEN
TEVEN
TS
The current downturn is not a crisis per se, but instead represents the growing pains of a truly global economy
S
• Corporate, MNC strategic realities Innovation Cycle
• Changing sector base• The role of policy in shaping the future
• Opportunities for proactive planning and targeting
What can this mean for you?
© 2009, CWS Consulting Group LLC
you?
ISSUES
The New NormalOFADJUST• Maintaining identity in the TM
ENT
g yface of Global convergence
• Embracing shift in trends rather than onslaught of “crisis”
• Transitioning to competing• Transitioning to competing in a tougher, global market
• Requires new and different qparadigms for true success.
© 2009, CWS Consulting Group LLC
AGEN
Location Strategies and Investor TargetingDA
• The Location Strategy (Site Selection) Process
• Investor Targeting – A Proactive Approach
• New Priorities in Location Strategy
• Innovation
• EnergyEnergy
• Protectionism
© 2009, CWS Consulting Group LLC
THE LOCATION STRATEGY PROCESS
INTRO
What is Site Selection?ODUCTIO
NT
Are we selecting a site,….
TOLO
CATI
….Or a home for a business
ONSTRA
TEEGY
How Do Companies (or Consultants)
M k L ti D i i ?Make Location Decisions?
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LOCA
T
The follo ing b siness sit ations can trigger a need for a ne
What is Site Selection?TIO
NSTRA
T• Real Estate event (Lease Termination)
The following business situations can trigger a need for a new site:
TEGYTRIG
• Real Estate event (Lease Termination)
• Expansion
• Market Entry GERS
y
• Mergers, and Acquisitions
• Consolidation
• Realignment
• Business Process Change
• Market Change
• Cost Reduction
© 2009, CWS Consulting Group LLC
LOCA
TWhat are Companies Looking For?
TIONPRIO
R
Labor Skills, Talent
Labor and Operating Costs
• All play some role
• Specific importance d d th
RITIES
p g
Partners, Customers and Vendors
depends on the use
Utilities and Other Infrastructure
Transportation and Access
Real Estate and Facilities
Business Environment, Taxation, and Incentives
Quality of Life
© 2009, CWS Consulting Group LLC
WHAT
L ti D i i f i l l t t h th h
Who Makes the Call?TANDW
H
I l
Location Decisions range from simple real estate searches up through complete strategic reconfigurations
E l
HO?: S
COPE
Internal
• Chief Executive Officer
• Chief Operating Officer
h f l ff
External
• Real Estate Service Provider (Broker)
• Management Consultant EANDTEA
• Chief Financial Officer
• Director of Corporate Real Estate
• Director of Human Resources
• Management Consultant
• Location Consultant
• Engineers, Architects, and Planners
AM
• Business Unit Leaders
• Legal, Tax, Public Relations
Planners
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THEE
The Location Process allo s companies to define their b siness needs and then narro the list
A Business‐Based ProcessEVA
LUATIO
The Location Process allows companies to define their business needs and then narrow the list of candidates based upon best‐fit. A business‐based methodology matches companies to locations that will meet their needs for the long‐term.
NPRO
CESSFinal LocationField Analysis S
Business Needs Assessment
Location Screening
Final Location Selection and Incentives Negotiations
Financial Modeling Executed
SolutionSolution
NOTE C it b bl t f j t til Fi ld A l i !NOTE C it b bl t f j t til Fi ld A l i !
© 2009, CWS Consulting Group LLC
NOTE: Community probably not aware of project until Field Analysis!NOTE: Community probably not aware of project until Field Analysis!
BUSIN
Fi t U d t d d d fi th d( )
Understanding the Core DriversNESS
NEED
S
• Catalog of operations at each location in the current configuration
P i it t k t li t (i t l d t l)
First: Understand and define the need(s)
SASSESSM
• Proximity to key partners or clients (internal and external)
• Key labor requirements and recruitability
• Facility requirements MEN
T• Competitive factors
• Market factors
• Regulatory concernsLocationGoalsRegulatory concerns
• Infrastructure requirements
• Business continuity factors
T iti l i l t ti i t
Goals
• Transitional or implementation requirements
• Real or perceived barriers to change
• Govt’ assistance required (or issues to be avoided)
© 2009, CWS Consulting Group LLC
• Other key location criteria
THEE
Front‐Loading the ProcessEVA
LUATIO
Challenge: How can Communities enter the process earlier, and stay in the running longer? N
PRO
CESSS
Business Needs
Location Screening
Final Location Selection and Incentives
Field Analysis
Needs Assessment
ScreeningNegotiations
Financial Modeling Executed
S l iSolution
© 2009, CWS Consulting Group LLC
INVESTOR TARGETING – A PROACTIVE APPROACH
INVES
Being a Good Host
How do we match
TMEN
TATHow do we match
community strengths and goals to the needs of b i ?
TTRACTIO
N
business? STRA
TEGYY
© 2009, CWS Consulting Group LLC
INVES
Reverse Engineering
Understand the link between community attributes and business needs
Investment Market Analysis Final Investment
TMEN
TATIndustry Targeting
Strategy Assessment
Attraction Plan
• Determine investor goals and resources
• Determine key
• Collect published and proprietary data on key criteria
• Construct weighting and ranking model
• Complete remediation plan as required
• Develop incentive
TTRACTIO
N
• Determine existing industry base
• Understand key dynamics for
stakeholders• Catalog site characteristics
• Determine market and catalog regional tt ib t
and ranking model to test development candidates under prime and alternative scenarios
• Combine screening
Develop incentive plan if required
• Develop key marketing targets and customized message and tactics for each
STRA
TEGY
selected industries• Examine availability
of key inputs• Look for key vendors
and partners• Determine existingattributes
• Examine existing regional and local economic base
• Establish initial strategic parameters
gresults with CWS Consulting Group experience to understand market dynamicsId if i i i l
• Develop deal structure(s)
Y• Determine existing reality and perception of benefits and obstacles in the site and regionstrategic parameters • Identify initial target
industry candidates Investment Attraction Plan
g
© 2009, CWS Consulting Group LLC
INVES
Location Planning for BusinessTM
ENTST
InvestmentStrategy Assessment
MarketAnalysis
Final Investment Attraction Plan
Investment Attraction Plan
IndustryTargeting
RATEG
YAS
First: Understand and define Goals and Resources
• What does the community want to achieve? What are it’s development goals SSESSM
ENT
goals
• Which community groups and resources will participate in investor attraction?
Wh t th it i b i t b th
T
• What resources can the community or region bring to bear on the process?
• How will the plan be implemented? How will it be made sustainable?
© 2009, CWS Consulting Group LLC
MARK
Screening – Determining Relative AdvantagesKET
ANALYS
InvestmentStrategy Assessment
MarketAnalysis
Final Investment Attraction Plan
Investment Attraction Plan
IndustryTargeting
Economic Base and Regional Partners
General Demographics and Labor Force Dynamics
Availability of Skills and Talent
SISEconomic Base and Regional Partners
• An honest, objective and complete assessment of the community’s strengths,
Transportation and Logistics
Education Resources weaknesses, and goals
• Provides the assessment of ingredients in the cupboard
f f
Overall Cost Base
Utility and Infrastructure Advantages• Identifies area for competitive improvement
Real Estate Availability, Suitability and Cost
Business Environment, Taxation, and Incentives
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Quality of Life
INDUS
Identifying the Likely SuspectsSTRY
ANDU
InvestmentStrategy Assessment
MarketAnalysis
Final Investment Attraction Plan
Investment Attraction Plan
IndustryTargeting
• What is the existing regional base for the industry, and what are the dynamics
• What are the greatest pressures and opportunities facing the industry
USESELECT
What is the match between Community and Target Investors?
g p pp g y
• What typically forces changes in any of these companies’ real estate and asset strategies
• Which industry players are either facing now or will be facing a key decision
TION
threshold in the near future
• What are the roadblocks keeping these companies from changing to meet new business demands
© 2009, CWS Consulting Group LLC
INVES
Bringing the Story to the Potential InvestorTM
ENTATFirst: Build competitive advantage
InvestmentStrategy Assessment
MarketAnalysis
Final Investment Attraction Plan
Investment Attraction Plan
IndustryTargeting
• Develop partnerships between public agencies and private companies
• Build training programs for specific skills or a particular labor class
• Install key infrastructure
TTRACTIO
N
• Install key infrastructure
• Provide environmental remediation for key properties
• Address legal, permitting and regulatory challenges at the site level
• Address tax permitting and regulatory issues at a community or regional level
PLAN
• Address tax, permitting, and regulatory issues at a community or regional level
• Provide funds for base financing
• Develop tailored deal structures to meet the needs of specific users and investorsinvestors
Second: Spread the word
© 2009, CWS Consulting Group LLC
BESTCommunity First Steps
PRA
CTICES
• Understand Your Community
• Organize and Prepare
S
• Engage the Current Corporate Base
• Build Regional Strength
• Build Relationships Between Government, Business, Education, and Economic Development
D l C h t E t l I S ti E i• Develop a Coherent External Image Supporting Economic Development
• Actively Reach OutActively Reach Out
• Be Creative
© 2009, CWS Consulting Group LLC
NEW PRIORITIES IN LOCATION STRATEGY
INNOV
The Global Innovation ChainVA
TIONInnovation, not Cost
• Manage the stream and flow of k l d d hknowledge and research
• Bring new products to new markets
• What is your position in that flow of development?
• Strategic, multi‐focused approach
• Interfacing Clusters = Mutual Innovation
• Develops sub‐sectors for support or spin‐off
• Adding value to industry location
© 2009, CWS Consulting Group LLC
Adding value to industry, location and economy at large
INNOV
Using Innovation to your Advantage
• How do Innovation Cycles work?
Wh i i l i i
VATIO
N
• What is your regional innovation cycle?
• Avoid innovation “trends” versus true “cycles”
• Use these as unfolding points of contribution for economiccontribution for economic development (targeted investment)
• Build on this for business• Build on this for business attraction/Development
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ENERG
The Coming Fuel CrunchGY
Relative Increase in Fuel Costs(Indexed to 1996)
??
SOURCES: Energy Information Administration, Bureau of Labor Statistics
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ENERG
Implication for Business Location?GYANDSUUPPLY
CHAIIN
© 2009, CWS Consulting Group LLC
Source: LogicNet Users Symposium 2009, David Simchi Levi
NATIO
Buy AmericaONALP
ROT
• Original language stated that all “manufactured goods” bought by taxpayers for the stimulus be produced domestically
TECTIONISM
• CAFTA and NAFTA impact
• In fact, more than 50 nations are covered by trade treaties with the US and may be exempt
M
trade treaties with the US and may be exempt from restrictions.
• By the way, when was the Buy American ActBy the way, when was the Buy American Act first tried? 1933.
HOWEVER ‐HOWEVER
• Border state governments have attempted to put some restrictions in place for public works spending
• Impact appears largely restricted to larger public projects
© 2009, CWS Consulting Group LLC
p pp g y g p p j
FULL IMPACT NOT YET KNOWN
BESTCommunity First Steps
PRA
CTICES
• Understand Your Community
• Organize and Prepare
S(R
EVISITE
• Engage the Current Corporate Base
• Build Regional Strength
D)• Build Relationships Between Government, Business, Education, and Economic Development
D l C h t E t l I S ti E i• Develop a Coherent External Image Supporting Economic Development
• Actively Reach OutActively Reach Out
• Be Creative
© 2009, CWS Consulting Group LLC
GETTI
How do we excel in Attracting Investment in the “New Normal”?NGAHEA
D
• Need to be nimble
• Need to innovate
N d t thi k l b ll
DOFTH
EB
• Need to think globally
• Need to partner
BUSIN
ESSAATTRA
CTIONNCURVE
“Rules are for the interpretation of wise men and the obedience of fools.”
– Colin Chapman
© 2009, CWS Consulting Group LLC
Chris SteelePhone: (617) 314-6527Email: [email protected]
THANK YOU VERY MUCH