Diversification is always critical for economic stability, especially for bringing in technology industries with high growth potential for the future. It doesn’t have to be a global firm — a start-up with a good product in a well-equipped business incubator can have a significant impact on the local and regional economy. Working together in regional partnerships is often the best way to develop infrastructure and training, as well as the marketing needed to attract top-level companies.
Longview, Texas, ranked third overall for year-over-year growth in our survey. The Longview MSA ranked sixth in employment growth among Texas MSAs at 4.4 percent. Manufacturing accounts for 12 percent of all jobs in the labor force — mostly machinery and fabricated metal products. The city continues to support its current manufacturing industries, as well as reaching out to others — such as food and beverage — that are a good fit for its available workforce. The city also invested in critical infrastructure, such as the Longview Business Park along Interstate 20, to attract more manufacturers. Crosby Group/Lebus Manufacturing, a maker of lifting and rigging products, recently announced it would invest $45 million in a facility at the park. The Longview Economic Development Corporation (LEDCO) will provide a $2 million grant over a three-year performance period to close the deal. Joe Bob Joyce, board president for LEDCO, notes that the incentives package “proves to company officials that we want Crosby/Lebus to invest and grow in Longview.”
Another year-over-year leader is the Boise City-Nampa MSA in Idaho, which ranked tenth overall among the Leading Locations in this category. Its diversified economy includes food processing, agriculture, traditional and advanced manufacturing, software, and sustainable energy. A young (average age 33) and highly educated workforce of 330,000 is within a 45-minute draw of the area. The Boise Valley Economic Partnership markets the MSA aggressively, especially its highly skilled workforce and low business costs. A new state incentive — the tax reimbursement incentive — is generating a lot of relocation interest. This credit is issued to a company on an annual basis, providing its performance milestones have been met. This incentive is one reason why Gayle Manufacturing Company, a provider of structural steel, is relocating its headquarters from California to Caldwell (part of this MSA) and building a new steel fabrication manufacturing facility. “Gayle Manufacturing’s relocation is a prime example of the opportunities and interest Idaho is seeing as a direct result of the tax reimbursement incentive,” indicates Clark Krause, executive director of the Boise Valley Economic Partnership. “In the Boise Valley alone, we have seen a 150 percent increase in companies interested in relocating to our area or expanding existing locations here.”
Recession-Busting Attributes Sometimes a community can get through a recession in decent shape because it has an industry or two that provide lower-cost, essential commodities that everybody needs — for example, food products. This, however, is usually not the case. Most communities that handle recessions better than others have a diverse economic base. They also tend to focus on their core strengths to proactively support businesses and create a positive business climate. To identify these communities, we analyzed the amount of change in key economic indicators from 2009 to 2014, providing a reliable measure of economic performance during and after the Great Recession.
In general, cities that fared the best had low overall business costs, including cost advantages in labor, property and leasing, incentives, and corporate taxes. For example, top-25 recession-busting MSA Portland-Vancouver-Hillsboro in Oregon is the seventh-best state in the U.S. for favorable business climate, according the Tax Foundation. In Oregon, corporate business tax accounts for less than 3.5 percent of the gross state product. Although a corporate tax is applied, Oregon uses a single-factor corporate tax calculation, another cost advantage. Portland-Vancouver-Hillsboro’s speedy recovery from the recession was also helped by its economic diversity, with deep roots in clean technology, advanced manufacturing, athletic and outdoor clothing, and software and technology. Rapidly emerging sectors are medical devices and healthcare, food processing, and global logistics. All these companies are supported by a highly talented and diverse workforce exceeding 985,000 workers, 33 percent of whom have bachelor’s degrees.
Like Portland, thirteenth-ranked “recession-busting” Louisville-Jefferson County (Kentucky) has focused on supporting and expanding its key business sectors of logistics, advanced manufacturing, food and beverage, and healthcare. In 2014, Kentucky reported 350 qualified location or expansion projects valued at $3.7 billion, which are expected to create nearly 15,000 jobs. As one of the top locations in the country for the rapidly growing lifelong wellness and aging care sector, Louisville continues to attract investment in this area. In December 2014, Kindred Healthcare announced it would build a $39.5 million, six-story building in downtown Louisville that will consolidate several company operations, creating 500 new jobs.