CWS Business Attraction For EDAC

Investor Targeting
Bringing Your Strengths to the Location Selection Game

EDAC/EDABC 2009 CONFERENCE
September 22, 2009

CURRE EVENTS
The Reality of Now

ENT
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

ISSUES OF ADJUST
The New Normal

• Maintaining identity in the
g y

TMENT
face 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
q
paradigms for true success.


AGENDA
Location Strategies and Investor Targeting

• The Location Strategy (Site Selection) Process
• Investor Targeting – A Proactive Approach
• New Priorities in Location Strategy
• Innovation
• Energy
• Protectionism


THE LOCATION STRATEGY PROCESS

INTRO
What is Site Selection?

ODUCTION T LOCATION STRATEGY
Are we selecting a site,….

TO
….Or a home for a business

E
How Do Companies (or Consultants)
Make Location Decisions?
M k L ti D i i ?


LOCAT STRAT
What is Site Selection?
The following business situations can trigger a need for a new
The follo ing b siness sit ations can trigger a need for a ne

TION
site:
• Real Estate event (Lease Termination)
Real Estate event (Lease Termination)

TEGY TRIGGERS
• Expansion
• Market Entryy
• Mergers, and Acquisitions
• Consolidation
• Realignment
• Business Process Change
• Market Change
• Cost Reduction


LOCAT PRIOR
What are Companies Looking For?

TION
Labor Skills, Talent • All play some role
• Specific importance
Labor and Operating Costs
p g
depends on the use
d d th

RITIES
Partners, Customers and Vendors

Transportation and Access

Utilities and Other Infrastructure

Real Estate and Facilities

Business Environment, Taxation, and Incentives

Quality of Life


WHAT AND WH ?: SCOPE AND TEA
Who Makes the Call?
Location Decisions range from simple real estate searches up through
L ti D i i f i l l t t h th h

T
complete strategic reconfigurations

HO
Internal
I l External
E l
• Chief Executive Officer • Real Estate Service Provider
• Chief Operating Officer (Broker)
• Management Consultant
Management Consultant

E
• Chief Financial Officer
h f l ff
• Director of Corporate Real Estate • Location Consultant
• Director of Human Resources • Engineers, Architects, and
Planners

AM
• Business Unit Leaders
• Legal, Tax, Public Relations


THE EVALUATION PROCESS
A Business‐Based Process

E
The Location Process allows companies to define their business needs and  then narrow the list
The Location Process allo s companies to define their b siness needs and then narro 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.

Field Analysis Final Location
Final Location

S
Selection and
Business Location
Incentives
Needs Screening
Negotiations
Assessment

Financial
Modeling Executed
Solution

NOTE:  Community probably not aware of project until Field Analysis!
NOTE C it b bl t f j t til Fi ld A l i !


BUSIN NEEDS ASSESSM
Understanding the Core Drivers

NESS
First: Understand and define the need(s)
Fi t U d t d d d fi th d( )

• Catalog of operations at each location in the current configuration
• Proximity to key partners or clients (internal and external)
P i it t k t li t (i t l d t l)

S
• Key labor requirements and recruitability
• Facility requirements

MENT
• Competitive factors
• Market factors Location
• Regulatory concerns
Regulatory concerns Goals
• Infrastructure requirements
• Business continuity factors
• Transitional or implementation requirements
T iti l i l t ti i t
• Real or perceived barriers to change
• Govt’ assistance required (or issues to be avoided)
• Other key location criteria


THE EVALUATION PROCESS
Front‐Loading the Process

E
Challenge: How can Communities enter the process earlier,
and stay in the running longer?

S
Field Analysis
Final Location
Selection and
Business Location
Incentives
Needs
Needs Screening
Negotiations
Assessment

Financial
Modeling Executed
Solution
S l i


INVESTOR TARGETING – A PROACTIVE APPROACH

INVESTMENT AT
Being a Good Host

How do we match
How do we match

TTRACTION STRATEGY
community strengths and
goals to the needs of
business?
b i ?

Y

INVESTMENT AT
Reverse Engineering

Understand the link between community attributes and business needs

Investment Market Analysis Industry Targeting Final Investment

TTRACTION STRATEGY
Strategy Attraction Plan
Assessment • Collect published
• Determine existing • Complete
and proprietary data
• Determine investor industry base remediation plan as
on key criteria
goals and resources • Understand key required
• Construct weighting
• Determine key dynamics for • Develop incentive
Develop incentive
and ranking model
and ranking model
stakeholders selected industries plan if required
to test development
• Catalog site • Examine availability • Develop key
candidates under
characteristics of key inputs marketing targets and
prime and
• Determine market • Look for key vendors customized message
alternative scenarios
and catalog regional and partners and tactics for each
• Combine screening g
attributes
tt ib t • Determine existing
Determine existing

Y
results with CWS • Develop deal
• Examine existing reality and structure(s)
Consulting Group
regional and local perception of
experience to
economic base benefits and
understand market
• Establish initial obstacles in the site
dynamics
strategic parameters
strategic parameters and region
g
• Id if i i i l
Identify initial target
industry candidates Investment
Attraction Plan


INVESTMENT STRATEGY AS
Location Planning for Business
Investment Market Industry Final Investment
Strategy Analysis Targeting Attraction Plan
Assessment

Investment
Attraction Plan

First: Understand and define Goals and Resources
• What does the community want to achieve? What are it’s development
goals

SSESSMENT
• Which community groups and resources will participate in investor
attraction?
• Wh t
What resources can the community or region bring to bear on the
th it i bi t b th

T
process?
• How will the plan be implemented? How will it be made sustainable?


MARK ANALYS
Screening – Determining Relative Advantages

KET
Assessment
General Demographics and Labor Force Dynamics
Investment
Attraction Plan

Economic Base and Regional Partners
Economic Base and Regional Partners

SIS
• An honest, objective and
Availability of Skills and Talent complete assessment of the
community’s strengths,
Education Resources weaknesses, and goals
• Provides the assessment of
Transportation and Logistics ingredients in the cupboard
• Identifies area for competitive
f f
Utility and Infrastructure Advantages
improvement
Overall Cost Base

Real Estate Availability, Suitability and Cost

Business Environment, Taxation, and Incentives

Quality of Life


INDUS AND USE SELECT
Identifying the Likely Suspects

STRY
Assessment

Investment
Attraction Plan

U
What is the match between Community and Target Investors?
• What is the existing regional base for the industry, and what are the dynamics
g p pp g
• What are the greatest pressures and opportunities facing the industry y

TION
• 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
threshold in the near future
• What are the roadblocks keeping these companies from changing to meet new
business demands


INVESTMENT AT
Bringing the Story to the Potential Investor
Assessment

Investment
First: Build competitive advantage Attraction Plan

TTRACTION PLAN
• Develop partnerships between public agencies and private companies
• Build training programs for specific skills or a particular labor class
• Install key infrastructure
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
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
investors
Second: Spread the word


BEST PRACTICES
Community First Steps

• 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
Develop a Coherent External Image Supporting Economic
C h tE t lI S ti E i
Development
• Actively Reach Out
Actively Reach Out
• Be Creative


NEW PRIORITIES IN LOCATION STRATEGY

INNOV
The Global Innovation Chain

VATION
Innovation, not Cost
• Manage the stream and flow of
knowledge and research
k l d d h
• 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
Adding value to industry, location
and economy at large


INNOV
Using Innovation to your Advantage

VATION
• How do Innovation Cycles work?
• Wh i
What is your regional innovation
i li i
cycle?
• Avoid innovation “trends” versus
true “cycles”
• Use these as unfolding points of
contribution for economic
contribution for economic
development (targeted
investment)
• Build on this for business
Build on this for business
attraction/Development


ENERG
The Coming Fuel Crunch

GY
Relative Increase in Fuel Costs
(Indexed to 1996)

?

SOURCES: Energy Information Administration, Bureau of Labor Statistics


ENERG AND SUPPLY CHAIN
Implication for Business Location?

GY I
Source: LogicNet Users Symposium 2009, David Simchi Levi


NATIO
Buy America

ONAL PROT
• 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
trade treaties with the US and may be exempt

M
from restrictions.

• By the way, when was the Buy American Act
By 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
p pp g y g p p j

FULL IMPACT NOT YET KNOWN

BEST PRACTICES (REVISITED)
Community First Steps

• 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
Develop a Coherent External Image Supporting Economic
C h tE t lI S ti E i
Development
• Actively Reach Out
Actively Reach Out
• Be Creative


GETTING AHEAD OF THE BUSINESS ATTRACTION CURVE
How do we excel in Attracting Investment in the “New Normal”?

• Need to be nimble
• Need to innovate

D
• Need to think globally
N d t thi k l b ll
• Need to partner

B A N
“Rules are for the interpretation of wise men and the obedience
of fools.”
– Colin Chapman


Chris Steele
Phone: (617) 314-6527
Email: chris.steele@cwsgrp.com

THANK YOU VERY MUCH

CWS Business Attraction For EDAC

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