Maintaining strong economic growth — and doing so year after year — is the mark of a well-managed community. It’s also an incredible challenge, especially when there are so many variables and pitfalls that can derail economic growth, which are often beyond the control of the city or region.
LEADING LOCATIONS FOR 2013 RESOURCES
Cities with economic strength factors and year-over-year economic growth tap into strategic management plans that minimize these economic risks by diversifying their economic base, building strong public-private partnerships, strengthening their education systems, and developing multi-skilled work forces that attract high-growth industries. Strong leadership and a common vision are also required at local, regional, and state levels to carry out economic development with the future in mind — especially when resistance is strong (i.e., doing things the “old way”).
In addition to taking care of traditional industries and major employers, forward-thinking communities must be willing to invest in programs and initiatives that attract high-growth, knowledge-based industries and expand educational opportunities. Not only will these “high-tech” companies broaden the tax base, they will be of more interest to Generation X and Generation Y populations, improving the chances that these eager, productive young adults will stay and help grow their communities.
Leveraging Expertise: These cities know how to leverage their core strengths to build economic momentum. Ames, Iowa, for example, has a long history of agriculture and manufacturing. The city and Iowa State University have worked together to build on this history and develop and support prosperous sectors in animal health, food processing, plant science, and advanced manufacturing. The Ames Economic Development Commission’s (AEDC) five-year plan focuses on building key infrastructure, supporting business growth, and collaborating with Iowa State University Research Park on new ventures. AEDC has also developed its Workforce Development Initiative (WDI) that will target high-value projects and train skilled workers for a variety of industries.
AEDC recently awarded $210,000 and a package of tax benefits to assist local manufacturer Amcor Rigid Plastics with a $24 million expansion that will add new equipment, support nearly 100 jobs, and improve the company’s competitiveness. “In order to remain a player in the market, it is imperative that we stay on top of new advancements and AEDC is helping us do this,” says Sheridan Attig, Amcor’s director of purchasing services.
Technology-Driven: Cities that exhibit economic strength and deliver year-over-year improvements tend to have diversified economies that blend traditional and knowledge-based industries. Not only do they support and update traditional industries, they nurture and development high-tech sectors like information and computer technology (ICT), nanotechnology, biotechnology, medical devices, and advanced manufacturing. This is a big reason Gainesville, Georgia, has been ranked by Forbes as one of the “Best Small Places for Business and Careers” over the last three years. The city was also ranked by the Milken Institute as the 39th best-performing small city in 2012, a 62-place jump over its 2011 position.
Gainesville is home to 47 Fortune 500 firms and more than 300 manufacturing and processing companies. In FY 2012–2013, 24 new and expanded businesses with a total capital investment of $203 million created 1,660 jobs and retained 1,530 existing jobs. These companies include Atlanta Biologicals, KIK Custom Products, ProCare Rx, Bitzer, Yazaki, ElringKlinger, Kubota, Atex, IMS Gear, Zebra Technologies, and Lupold.
Keeping Costs Down: Companies want to see serious commitment when it comes to reducing business costs and red tape — especially during uncertain economic times. Cities that do not make the effort to create a friendly, proactive tax and regulatory climate will be left behind. It is essential to create meaningful incentives that make sense to prospective companies — especially streamlining start-up costs, subsidizing worker training, and providing other benefits that address special needs and facilitate growth.
Nashville, Tennessee, is at the forefront of cost control. According to a study by KPMG LLP, Nashville was the second least-costly city in which to do business among 13 locations in the United States with populations between one million and two million. Nashville’s cost of doing business is 88.5 percent of the national average. Forbes recently ranked Nashville as the third-best-positioned city “to grow and prosper in the coming decade.” The state of Tennessee also has no personal income tax.
Utah is another top-ranked state for economic performance. In December 2012 it was ranked as best state for business and careers by Forbes for the third consecutive year — noted especially for its low business costs, top-notch labor force, regulatory environment, and growth prospects. Utah’s incentive programs include a refundable tax credit for up to 30 percent of new state tax revenue over the life of a project, as well as generous grants for creating high-paying jobs.
Salt Lake City, for example, is a leader in both economic strength and year-over-year economic growth (2011–2012). The city invests millions of dollars every year in infrastructure improvements and is increasingly known for its advanced manufacturing, aerospace, and ICT sectors.
FireEye, a provider of advanced IT security programs headquartered in California, recently announced it would build a $2 million facility in Salt Lake County, creating about 250 new jobs. Salt Lake City-based Boeing is planning to add high-tech manufacturing jobs at its Utah operations to increase its composite manufacturing capacity. Boeing will also hire about 100 new employees to meet increased production demands. Utah’s Department of Workforce Services and the Industrial Assistance Fund will provide up to $225,000 for specialty training and up to $100,000 in “WorkKeys” funding, a national program that gives companies more control in determining the skill sets of potential new employees.
“Boeing’s reputation for innovation and leadership has in part helped Utah gain a reputation as one of the leading states for business,” says Spencer Eccles, executive director of the Governor’s Office of Economic Development. “We look forward to seeing what this new project will bring.”
- Austin-Round Rock-San Marcos
- Key industries in the Austin MSA are advanced manufacturing, electronics, multimedia technology, clean energy and power technology, life science and biotechnology, and data centers. According to the Brookings Institution, Austin ranked first overall among the 100 largest U.S. metros based on amount recovered from pre-recession peak to the present, based on jobs, unemployment, gross product, and housing prices. Further, Austin placed second on the 2012 Milken Institute Best-Performing Cities Index.
Much of this economic growth is driven by improved performance in chip-making and systems design. Dell, IBM, Apple, and Samsung are among the largest technology employers. Backed by a $21 million investment through the Texas Enterprise Fund and an $8.6 million grant from the city of Austin, Apple will undertake a $304 million expansion of its facilities, eventually creating 3,600 well-paying jobs. Samsung's $4 billion expansion of its semiconductor manufacturing operations will increase its total investment in Austin to $13 billion since 1996. GM plans to build a 500-employee innovation center and eBay, another major Austin employer, will hire about 1,000 software engineers over the next 10 years.
With this kind of growth in high-technology fields, it is no surprise that Austin has also recently been named by the Business Journals as one of the top three cities for young adults to establish careers in post-recessionary America.
- San Jose-Sunnyvale-Santa Clara
- Known as the heart of the Silicon Valley, the San Jose MSA has a rich tradition of high-tech entrepreneurship, innovation, and discovery. About $8 billion in venture capital funding is invested in the region every year, driving R&D and commercialization efforts, especially in the fields of nanotechnology, communications, and information and computer technology (ICT). Major players include Cisco Systems, Samsung, eBay, Google, and Yahoo.
Top universities in the area — San Jose State University, University of California-Berkeley, and Stanford University — attract some of the best student talent in the country, turning out an impressive number of highly skilled scientists and engineers. As a result of this stellar work force, strong economic growth, and the creation of high-paying jobs, San Jose also placed first in the 2012 Milken Institute Best-Performing Cities Index.
Recent announcements include Samsung Semiconductor's expansion of its research and development campus and FICO's plans to relocate from Minneapolis to San Jose to be closer to Silicon Valley's engineering talent pool. "By operating from the Silicon Valley, we can more readily build upon our company's deep talent pool, collaborate with other big thinkers in the world's premier technology hub, and help our customers compete more effectively in the era of big data," says FICO's president and CEO William Lansing.
- San Francisco-San Mateo-Redwood City (METROPOLITAN DIVISION)
- Omaha-Council Bluffs
- Boston-Cambridge-Quincy (NECTA DIVISION)
- With over $4 billion in new development projects totaling more than 10 million square feet under construction, Boston is booming. The Innovation District along the South Boston waterfront has attracted over 200 new companies and 4,000 new jobs across a variety of industries, including technology, life sciences, design, and advertising. Vertex Pharmaceuticals is currently building its $800 million, 1.1-million-square-foot global headquarters in the heart of the district.
The Boston MSA enjoys an international reputation for healthcare and medicine. According to Jones Lang LaSalle, nearly 75,000 people in the Boston MSA are employed in the pharmaceutical, biotechnology, and medical device industries — second only to San Diego. Boston's 22 hospitals and 34 colleges and universities are important anchors in the city's economy. The city is also the leading recipient for National Institute of Health funding in the U.S. — in fact, five of the top eight NIH-funded hospitals are within the Boston MSA.
An outstanding educational system and high quality of life are just two reasons why Boston has such a diverse and youthful population — about one third of the city's population is between the ages of 20 and 35. Many of these energetic, young professionals work in the high-tech growth sectors of advanced manufacturing, clean energy, defense, IT, and life sciences/biomedicine.
- Major industries in the Bethesda MSA include telecommunications, energy, technology, defense, aerospace, and healthcare. Both the National Naval Medical Center and the National Institutes of Health are located in Bethesda. Also headquartered here is Lockheed Martin, a global aerospace and security firm that conducts cutting-edge research and development and works closely with the federal government on major projects.
Bethesda is top-ranked for its educated, highly skilled work force. For example, the city has one of the highest per capita concentrations of doctorate degrees in the country. It ranked second in education according to Forbes 2012 "Best Places for Business and Careers" report. In March 2013, the city's unemployment rate was 5.1 percent.
Located in Montgomery County, Maryland, Bethesda is one of the most important economic drivers in the Greater Washington area. In May 2013 Montgomery County reported its work force had increased by nearly 25,000 jobs since 2010, a 3.9 percent growth rate. About 20 percent of these new jobs were in professional, scientific, and technical services, making these sectors the county's top job gainers. Companies that added the most jobs in Bethesda include Capital One (300 jobs) and the Henry M. Jackson Foundation (200 jobs).
- Boise City-Nampa
- Dallas-Plano-Irving (METROPOLITAN DIVISION)
- Washington-Arlington-Alexandria (METROPOLITAN DIVISION)
"DC" has one of the most diverse economies in the country. The federal government employs about one third of all workers in the city and provides contract work to hundreds of companies, especially in high-tech fields like aeronautics, defense, telecommunications, electronics, IT, and other services. Other important employment sectors are industry trade associations, financial groups, and scientific research through federal organizations, as well as top research universities and medical centers. Tourism, the second-largest industry in the city, is on the rebound — nearly19 million visitors pumped about $5 billion into the local economy last year.
With all this activity, it is no surprise that economic development and commercial construction within the city are booming. According to the Washington, D.C., Economic Partnership's 12th annual DC Development Report, about 21.5 million square feet of commercial space is under construction, valued at about $9.5 billion. Residential construction is also hot, with over 10,000 units being built — the most since 2001.
- Louisville-Jefferson County
- Charlotte-Gastonia-Rock Hill
- Oklahoma City
- Salt Lake City
- Minneapolis-St. Paul-Bloomington
- Seattle-Bellevue-Everett (METROPOLITAN DIVISION)
- Baton Rouge
- Fort Worth-Arlington (METROPOLITAN DIVISION)
- Houston-Sugar Land-Baytown
- Fort Lauderdale-Pompano Beach-Deerfield Beach (METROPLITAN DIVISION)
- Known as the Yachting Capital of the World, more than 150 corporate and international regional headquarters already enjoy the benefits of a Greater Fort Lauderdale MSA location — including such notable names as AutoNation, Citrix, DHL Americas, Elizabeth Arden, Embraer, Kaplan Higher Education, Marriott International, and Microsoft Latin America, to name just a few.
The recent announcements of several additional headquarter projects in the Greater Fort Lauderdale area by Altadis USA, Anthem Education, Emerson Latin America, SmartWater CSI North America, and the Wendy’s Company Latin America and Caribbean among others provide further “real world” confirmation of the area’s business benefits.
For seven consecutive years, the Tax Foundation has ranked Florida has having the nation’s fifth-best state tax business climate; the state also does not impose a personal income tax. And, Chief Executive magazine’s 2012 CEO survey of the Best/Worst States for Business ranked Florida #2.
The area’s domestic and international air infrastructure is anchored by the Fort Lauderdale/ Hollywood International Airport, with its new $790 million runway scheduled to open in 2014 and low-cost domestic carriers that provide daily flight service, along with the close proximity to Miami International Airport. Port Everglades is Florida’s leading container cargo and major cruise port and is in the midst of $72.8 million in intermodal yard improvements and $54 million cruise terminal renovations to further enhance its capabilities.
Additionally, the large South American and Brazilian populations that live in Greater Fort Lauderdale provide a substantial multilingual base of Portuguese- and Spanish-speaking employees to serve those markets as well as the United States
- Oakland-Fremont-Hayward (METROPOLITAN DIVISION)
- San Antonio-New Braunfels
Leading Locations for 2013 Results