A behind-the-scenes look at industrial recruitment
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I’d like to address the issues of industrial recruitment and expansion. This year, more than 15,000 economic development organizations in the United States, such as Chambers of Commerce, utilities, Industrial Boards and the like, will be competing for just over 2,000 new projects. Statistics show more than 75 percent of all new jobs created in this country come from expanding industries and from small business. So, to begin with, facing those odds for any community, landing a new project is a long shot.
In Tennessee, for example, during good economic times, the state may recruit between 80-90 new companies. For a state with 95 counties, some obviously get left out. With many companies’ adamant desire to be in or near a large metropolitan area, such as Nashville, the odds decrease even more for rural communities.
The process generally begins like this. Let’s say company “X,” located in Detroit making trim molding for the auto industry, sees the need to expand to the South to capitalize on the new South economy in the auto industry.
Company “X’s” market may potentially include Kentucky, Tennessee, Alabama, Mississippi, and Georgia. Company executives pinpoint the greatest sales and market potential, and then begin the site search process.
The company will then prepare a list of “must have” criteria that a state and a community must meet. For example, the company zeroes in on Tennessee, because of our strategic location and the potential to serve all or most of the company’s markets. Company representatives, or a search firm, will submit normally to the state Department of Economic and Community Development (ECD), the list of “must haves” I mentioned earlier.
That list usually includes available building or land, total community and area workforce data, educational institutions (for training purposes), educational data (number of high school graduates, test scores, percentage of population with post-secondary education, etc.) distance from interstates, utility rates and reliability, (and telecommunications capabilities are becoming more and more of an issue), distance from commercial airports, etc. There usually are many more. I just list a few here.
ECD then searches its databases and contacts those communities that meet all or a majority of the criteria. Those communities that meet or exceed the criteria usually will get a site visit.
That visit normally includes viewing available buildings, developed land complete with infrastructure, demographic data, and a tour of the community, time permitting. During the discussions, various topics are discussed, such as available employees, taxes, utility rates, incentives, training, quality of life, transportation and so on. In my nearly 10 years in economic development, you’d be surprised what types of questions are asked about a community. When a company chooses a community for a new plant location, they want to make absolutely certain they are making the right decision.
Typically, a company will want to look at five or six communities. But the goal is to narrow down to the magic number of three. When the list gets to three, typically there are very few differences. All three communities are acceptable.
One thing to bear in mind in both the recruitment of new industry and the expansion of existing industry, is not only is company “X” competing with company “Y” for market share, but is competing with companies in Mexico, the former Soviet Republics, China, and Taiwan, for business. As the world truly does get smaller, the demand for price controls, quality improvements, and customer service for American-made products goes up each and every year.
Regarding the expansion of existing industry, our office works with Warren County industries on expansion projects. We are involved with helping local companies to expand with locating suitable buildings, financing, obtaining training and infrastructure money from the State of Tennessee, tax issues, and so on.
I firmly believe in the next few months, the fruits of the efforts of the Industrial Development Board will pay off. The recession, which has no doubt affected Warren County, Tennessee, and the U.S. as a whole, is showing signs of easing.
We’re already seeing some signs of improvement. Our unemployment rate for May (the latest figures available from the state) is 5.7 percent. Sales tax collections are up approximately $100,000 in May 2002 over May 2001. Consumer confidence and stability in the stock market are two of the critical factors that will determine when we fully recover from the recession.
I hope this brief column helps explain what we’re doing and how we go about doing it. Our goal is to make Warren County a very desirable place to do business, and we are working diligently to do just that for our current quality employers and new companies we hope to welcome to the community.
Jim Gray is president of the McMinnville-Warren County Chamber of Commerce. He can be reached at 473-6611.