Economic deal volumes nationally are continuing to swell and Michigan has some strengths that position it favorably to make a case for investment, said a corporate site-selection expert today at a summit sponsored by Business Leaders for Michigan.
But the state needs to be aggressive and proactive about telling its story, said Ron Starner, general manager of Site Selection magazine. And “more importantly, don’t let someone else frame your story for you,” he said.
Speaking at a session at the Lansing summit focused on competitiveness, Starner said more projects are in play than a year ago and corporate decision-makers are looking for cost efficiencies and certified, move-in-ready sites.
“Speed to market is the trump card in the game of economic development,” he said. “A company will choose to go to a location that is not optimal…if it can get there quickly.”
The top industries for plant expansions – transportation equipment, chemicals/pharmaceuticals, food processing, machinery and fabricated metal – play to Michigan strengths and the state also has a foothold in other hot sectors, like renewable energy and electric vehicle/battery manufacturing, he said.
But the states viewed as most competitive are generally southern, even though Michigan has ranked among the top states in terms of the numbers of corporate plant investments in recent years.
What does it take to win and retain projects in 2011? Economic development practices that Starner said include:
* Fortified marketing and communication efforts.
* Investment in high-quality infrastructure.
* Creative incentive programs on top of already low tax rates.
* Access to educational resources that support the business community.
* Support for innovation and entrepreneurs.
* Pro-business government.
* Transportation network that offers competitive advantages in logistical operations.
* Support for new and emerging industries.
* A history of corporate plant success.
* Shovel-ready sites and move-in-ready buildings.
Starner said high-performing economic development operations, of which Wayne County EDGE is one, are customer-driven, operate with a strong strategic plan, measure results and adjust accordingly, and build strong alliances and networks, among traits.
It’s imperative to have a plan, he said. “You want to have a plan in place that targets the right audience, crafts the message as you want to tell it, and then you deliver it to them.”
And some perceptions of Michigan may be changing, in the wake of recent state action in areas like tax reform.
At a later session at the summit, Charles “Chip” McClure, chairman, president and CEO of Troy-basedMeritor Inc., said he was in Washington last week and was asked by executives from other states “about what’s going on in Michigan.” McClure said that while “there’s still work to get done,” Michigan’s actions over the last five months are “sending the right signal.”
He said even though Meritor’s taxes aren’t going down as a result of the tax reforms, his company now knows “certainty of costs going forward.”
J. Patrick Doyle, president and CEO of Ann Arbor-based Domino’s Pizza Inc., said reducing volatility and risk are important and sometimes underestimated aspects of a business environment.
“Everybody knew there needed to be some dramatic change to get the state back on track; it’s in place,” he said. “Getting that risk out of play, I think, is very important.”
By Amy Lane, Crain’s Detroit