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Area Development

24th Annual Corporate Survey Analysis by Jay Garner, CEcD

Dec/Jan 10
The 2009 site selection factors, as noted by company respondents, validated what we have said for sometime - the cost of doing business in a particular community or region is still the most important factor to companies in their searches and has been since this survey was first conducted by Area Development. The 2009 survey clearly points out that of the top-10 ranked site selection factors, seven are directly or closely related to the cost of doing business in a community. If cost weren't important, then you wouldn't see the explosive growth of new investment in low-cost countries like Vietnam, Laos, Bulgaria, and Thailand.

Multinational companies that invest in the United States know that they need to find locations that - on par - can compete with foreign locations in both productivity and costs. Those communities that embrace this knowledge and have committed public policymakers who are working to achieve the goal of quality public services at low cost know they will have a competitive advantage in the global marketplace.

Quality-of-life factors continue to point to another longstanding trend that both corporate investors and residents of a community want to insure as a given - public safety. The respondents want to see a low crime rate and have quality healthcare facilities. Housing costs switched this year with housing availability in the top-four rankings. We believe that with deflated real estate prices in nearly all regions of the country, company officials recognize that, in today's environment, affordable housing for executive level management is more reasonably priced than in recent history. The ratings of public schools factor is still in the middle of the pack for what we believe are two reasons: Many of the middle and higher management personnel place their children in private schools and don't often consider public schools as an option; in addition, many of our corporate clients have expressed that public schools are inherently broken at many locations around the country so if they find a location that has an excellent public schools rating, then that may be an unexpected plus in favor of that community.

I for one would be surprised if the 2010 rankings change with respect to the importance of costs and the desire of companies to locate in reduced-cost locations.

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