Area Development
Area Development interviewed Catalina Valencia, Founding Principal, Terrafinder Consulting, at the 2019 Area Development Women in Economic Development Forum in Chicago about the future of site selection for heavy industry. Interview conducted by Margy Sweeney, Founder and CEO, Akrete, Inc. and Area Development Editorial Board member.
Top Site Selection Concerns for Heavy Manufacturing Companies
When you think of heavy manufacturing, utilities and transportation logistics infrastructure is key for those operations. So, for example, you have operations with demands in the 400 megawatt or the 200 megawatts range. Some smaller heavy-industrial operations require 10 to 20 megawatts – which is already a big operation in terms of electricity demand. It’s not that you find a lot of locations that are ready with 400 megawatts waiting for that operation to come. It's important to find locations that can meet this type of electricity demand, and you can couple that with the logistics and the transportation needs that these companies have.

New Technologies Create Demand for Soft Skills
When you think about the changes that are going to be happening in operations, you can think of workforce. You can think of the supply chain. You can think of the logistics that come with the supply chain. The energy demands that operations will be needing. The support systems that will be needed to operate in a technology-driven world. All of these priorities are going to come to the top and, at the same time, those priorities are going to have more intensity. When we think about workforce, for example, skills and traits are going to be driving that need.
Skills are going to be driving that decision from the workforce perspective. You'll need not only higher skills, but soft skills are going to be very important – people who can make decisions, who can be very flexible in adapting to operations that are changing constantly.
Whereas these days, and in the past, companies have looked at locations where they can have the workforce they need in terms of size. They looked at locations where they could have that sizable workforce and not be in a difficult situation when they need to hire. Skills are going to be driving that decision from the workforce perspective. You'll need not only higher skills, but soft skills are going to be very important – people who can make decisions, who can be very flexible in adapting to operations that are changing constantly.

People who can very rapidly change their mindsets to adapt to different types of operations are also needed, with the capacity to make decisions to solve problems. That's going to be needed much more from workers into the future, as is the capacity to work in teams and adapt to those changes. Flexibility comes not only in terms of being able to address different types of changes throughout the operation, but also changes in your role, depending on the different needs and the changing pace of the corporation.

Overlooked Site Selection Opportunities in Latin America
Latin America presents a lot of opportunities, and it's a region we don't hear much about. We forget that is a region that is close to 600 million people, which makes it a sizable market. From that perspective, many countries in Latin America have been growing steadily for the past number of years, and with that comes the increase in consumer spending. It's a fantastic market opportunity for companies in the United States and also for Latin American companies that are growing and are coming to the United States to establish their businesses.

I'm Colombian myself, and it's been a very positive surprise to see some Colombian companies locating their facilities in the United States. In the past, you would look at exporting to many countries – that was the milestone. Today, a lot of these Latin American companies are also making location decisions outside of their regions. So it works both ways. You have a very attractive market, in terms of size, that has been growing. You have a market where consumer spending has been growing. You have a market seeing the introduction of technologies, and it's happening at the same pace that the United States is also experiencing. It's a market that, if they don't find the types of products that they want locally, then they are relying on Amazon. They're relying on eBay. They're relying on these resources to get those products to them.

It constitutes a very interesting opportunity for companies in the United States that are not looking at Latin America to consider those markets, as all these changes are creating a very good environment for them to get their products into. Either by exporting or establishing operations there. In particular, there are a lot of opportunities around the food industry and for food industry companies to come to the United States. So that's becoming a key sector.

Connectivity is Critical for Industry 4.0
In the future, the demands for energy and telecommunication infrastructure are going to be much higher. You'll need not only the providers, but also the technologies to run an efficient operation. We're going to be looking at sites not only from the topography or the wetlands perspective, but also for that infrastructure component.

When we talk about manufacturing, there are operations these days that are probably not so dependent on energy and telecommunication infrastructure and they can go pretty much everywhere. But when we are thinking of a world that's going to be more technologically driven and will have operations so reliant on the technologies at every level, it’s going to be very important that you have sites and communities that can deliver on that infrastructure and are reliable. You'll have operations running 24/7 at every level, not only your processes, but also your supply chain. Your entire value chain will be depending on these technologies, and with that comes that infrastructure that you need. Site selection is going to become much stricter in terms of the types of sites that you need to support those technologies.