The document provides an overview of how the Missouri Partnership markets Missouri for new business investment and recruits companies. It discusses the organization's mission and structure, key objectives of raising awareness of Missouri's business advantages and generating investment leads. It also outlines the Partnership's marketing strategy including building a positive image through various "air" and "ground" campaigns, and working with economic development partners. The final sections discuss engaging with companies through trade shows and consultant outreach, as well as the role of incentives in the recruitment process.
MEDC Fundamentals Of Economic Development - Apr 2010
1. The Rules of AttractionMarketing for New Business Presented to: Missouri Economic Development Council “Fundamentals of Economic Development” Presented by: Christopher Chung The Missouri Partnership April 7, 2010
2. Presentation Topics Introduction to the Missouri Partnership How we market our “product” How we recruit new business investment Questions and answers
3. About the Presenter 10+ years of state-level economic development experience in Ohio (including projects, policy, and people) Service in both Democratic and Republican administrations during time in Ohio Relationship and deal management experience with major site selection clients
4. Introduction to theMissouri PartnershipAn Overview of the State’sInvestment Promotion and Business Recruitment Group
5. Introduction to theMissouri Partnership Mission To promote Missouri as a destination for new business investment To recruit new employers and jobs to Missouri Structure Public-private non-profit corporation Governance 12-member Board of Directors from statewide Size 10 employees – Sales, Marketing, and Admin
6. Introduction to theMissouri Partnership Why was it created? What are its key objectives? Who else uses this approach? Why is this important?
7. Introduction to theMissouri Partnership Why was it created? Effectiveness of public-private partnership model Engagement of private-sector resources Needed consistency in marketing efforts Needed continuity in sales relationships
8. Introduction to theMissouri Partnership What are our key objectives? Deliver the “message” about Missouri’s positive business attributes Raise awareness and visibility of Missouri and its advantages as a place to do business Generate investment leads (i.e. “Get Missouri on the list”) Close investment deals
9. Introduction to theMissouri Partnership Who else uses this approach? Florida – Enterprise Florida Alabama – Econ. Dev. Partnership of Alabama Utah – Econ. Dev. Corporation of Utah Ohio – Ohio Business Development Coalition
11. Defining Economic Development Three principal components of economic development and job creation Retention and expansion of existing industry Entrepreneurial development, technology commercialization, and small business growth New business recruitment The Missouri Partnership was formed to address the area of new business recruitment
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13. Marketing forNew Business Investment Our Marketing Strategy “Air Campaign” Build a positive image of Missouri for business Shape perception of Missouri business climate “Ground Campaign” Develop and manage relationships with decision-makers and decision-influencers Initiate face-to-face conversation about plans Ultimate goal is to generate qualified investment leads
14. Marketing forNew Business Investment “Air Campaign” Tactics Advertising Earned media Digital (web, social media, e-news releases, search-engine optimization) Thought-leadership activities
15. Marketing forNew Business Investment Elements of “Air Campaign” Messaging Features new Missouri brand Focused on relevant industry assets Relies on success stories and corporate testimonials Highlights improvements to business climate and positive acknowledgments/rankings for Missouri
16. Marketing forNew Business Investment “Ground Campaign” Tactics Conference sponsorships Tradeshow exhibition presences Decision-maker outreach (e.g. site selection consultants)
17. Marketing forNew Business Investment Tradeshow Exhibition Efforts (2010) CoreNet Global Biotechnology Industry Organization (BIO) Solar Power International WINDPOWER Expo AFCOM Data Center World
18. Marketing forNew Business Investment Decision-Maker Outreach Efforts (2010) Consultant outreach events Chicago Greenville, SC New York / New Jersey Los Angeles Cleveland International trade commissioners and consular offices
19. Marketing forNew Business Investment Our Marketing Partners Missouri Department of Economic Development Hawthorn Foundation Local and regional economic development groups Private industry in Missouri (e.g. utility companies, construction firms)
20. Long-Term Challenges Product Awareness Raising the visibility of Missouri and its economic development potential Shaping a positive perception of Missouri as a place to do business Product Development Targeting growth industries that complement Missouri’s advantages Business climate improvements
24. Wind Energy Components Major components of a wind turbine Nacelle (the motor) 100 tons 8,000 separate components (e.g. gearboxes, bearings) Tower 300 feet in height Fabricated metal construction Blades 150 to 200 feet in length Fiberglass or composite (e.g. carbon fiber) construction
25. Wind Energy Components Defining characteristics Expensive to transport (weight of products) Difficult to transport (dimensions of products) Traditionally manufactured in Europe (esp. Denmark, Spain, and Germany) Will require new base of U.S. suppliers and maintenance workers Forecasted growth in demand (despite current oversupply)
27. Keys to Success Product Awareness Establishing Missouri’s presence at key industry events Delivering the “Why Missouri” message Product Development Strong market for wind energy Attractive operating conditions Incentives
35. Site Selection in a Nutshell 1. Company identifies need for additional capacity and initiates search for new facility location 2. Company contacts state/local development groups 3. Development groups submit site location proposals to the company 4. Company visits sites and develops short list of favorites 5. Company negotiates incentives and selects a final site
36. What’s Important? Top Factors in Corporate Location Decisions 1. Cost of labor (2nd in ‘08) 2. Highway accessibility (1st in ‘08) 3. Tax exemptions (4th in ’08) 4. Energy availability/cost (5th in ’08) 5. Corporate tax rate (8th in ‘08) Source: Area Development, March 2010
37. What’s Important? Top Factors in Corporate Location Decisions 6. Availability of skilled labor (6th in ‘08) 7. Occupancy/construction costs (3rd in ‘08) 8. State and local incentives (8th in ‘08) 9. Availability of internet (21st in ‘08) 10. Freight costs (not ranked in ’08) Source: Area Development, March 2010
38. What’s Important? Other Factors in Location Decisions 14. Right-to-work state 17. Environmental regulations 23. Accessibility to major airport 25. Railroad service 26. Waterway/port accessibility Source: Area Development, March 2010
39. Who is Involved? Stakeholders in the process – The “Buy Side” The Client Where do the leads come from? Marketing events Tradeshows Relationships / referrals “Cold Calls” Company versus Consultant
40. Who is Involved? Stakeholders in the process – The “Sell Side” Missouri Partnership Missouri DED Regional economic development groups Local economic development groups Utility companies Private industry in Missouri
41. Role of Missouri Partnership Responding to business recruitment leads Identifying optimal community locations for the project Proximity to complementary industries and educational assets Geographical advantages, including supplier and market access Site and building availability Business and labor climate suitability Operating cost management
42. Role of Missouri Partnership Responding to business recruitment leads Performing targeted, location-specific research Area demographics Regional industry makeup Workforce availability and accessibility Ongoing financial concerns, including energy costs and taxes
43. Role of Missouri Partnership Responding to business recruitment leads Packaging state and local economic incentive programs and detailing their impact on up-front capital expenditures and long-term operating costs Facility financing Infrastructure assistance Workforce training Tax abatements and credits
44. Staying in the Game Follow-up visits to the community Inspect the proposed site or building Help the client envision the potential Interview local employers about the area workforce (e.g. work ethic, productivity, wage schedule) Respect the confidentiality of the conversation Select the right employers to tell the story
45. Staying in the Game Follow-up visits to the community Meet with local government officials (“dog and pony time”) Emphasize the pro-business attitude in the community Maximize the tangible benefits to the client Minimize grandstanding
46. Staying in the Game Follow-up visits to the community Look for additional reasons to narrow the field of competition (site selection as a “process of elimination”) Sell the strong points of the community Transportation accessibility Price (especially if the site/building is publicly owned) Legacy workforce (if there is a recently downsized operation)
47. Staying in the Game Follow-up visits to the community Identify other potential concerns about the specific site or community Anticipate and mitigate these with adequate preparation Infrastructure development plans and costs Environmental and geotechnical studies “Blind” job recruitment ads Natural disaster statistics
48. Staying in the Game Follow-up visits to the community Negotiate and finalize a competitive package of state and local incentives Be ready to give a “best and final” offer that is responsible to the community but that also factors in the competitive reality of the deal
49. Potential Pitfalls in the Process Where Things Can Go Wrong Information failures Quality of information Confidentiality Relationship failures Trust between client and state/local community Trust between regional and local groups Trust between state and local communities
50. The Role of Incentives “Incentives make a good site better. They don’t make a bad site good.” - Anonymous
51. The Role of Incentives How important are they? Consistently ranked among Top 10 location factors in Area Development annual survey of corporate executives 2005: 4th 2006: 4th 2007: 8th 2008: 7th 2009: 8th
52. The Role of Incentives Why do they matter? One of the few factors within the control of state and local governments Can assist with multiple facets of new operation “Develop the site” “Build the building” “Find the workers” “Keep the costs low”
53. The Role of Incentives What do companies want? Cash is king BUT… Most businesses want to maintain a strong relationship with the community and state Incentives won’t compensate for a flawed business case There are responsible policy options for state and local governments
54. The Role of Incentives How does Missouri fare? Positive reputation for Quality Jobs Act Well-known and well-used New Jobs Training program Competitive disadvantage against states with “deal-closing” or contingency funds Texas: $290 million Arkansas: $40 million Ohio: $30 million Virginia: $20 million
55. The Rules of Attraction 1. Consistently provide quality information in a timely manner 2. Build a personal connection and earn the trust of the client 3. Understand the client’s needs and how your community offers the best solution 4. Harness the power of peer-to-peer testimony 5. Recognize that everyone and everything in your community is being evaluated
56. Site Selection is Like Courtship RFPs = Personal ads Trinkets from the local chamber = Flowers and chocolates Site tours and employer interviews = Going on dates and meeting the family Just as in courtship, persistence is key.