Data and call center operators are savvy about information and communication technology, but manufacturers should also make it a priority.
It's not at the top of the list, and few manufacturers will cite it as the primary factor in choosing a site. But Area Development's 2009 Corporate Survey showed that the availability of information and communication technology (ICT) services is becoming an important consideration among corporate decision-makers. Survey respondents naming ICT as a selection factor rose more than 27 percent compared to 2009.
That doesn't mean ICT is about to topple cost, location, or incentives at the top of the list. But for certain manufacturers operating particular systems, ICT can serve as a pivotal tie-breaker.
Pull on Manufacturing
Some uses are obvious. Data and call centers need to be wired to the hilt, and the availability of such infrastructure helped Lakeland, Florida land two major call center operations run by Affinitas and Vangent. The latter brought 1,500 job opportunities to the community.
But the communities that invest in ICT infrastructure usually hope to add new manufacturing facilities. The economic development community says manufacturing operations bring more value to the community due to tax base and overall wealth expansion that data or call centers. A few communities have struck gold with manufacturing, including:
• A new Louisville Slugger facility in Mason County, Washington
• A new Colgate-Palmolive facility in Morristown, Tennessee
• A series of metal fabrication companies in Independence, Oregon
• The expansion of a Cooper Tire facility in Anderson, Indiana
But even among the success stories the Fiber to the Home Council has touted, the majority are call centers, data centers, or other operations that - while undeniably high-tech - are not major manufacturing.
Jody Wigington, general manager for Morristown, Tennessee's city-owned utility, said other factors contributed to Colgate-Palmolive's decision.
"Telecom costs relative to infrastructure like electric rates, sewer rates, and tax incentives, from a dollar standpoint, don't compare," Wigington said. "The bigger companies can probably just pay Bell South to hook them up with whatever they want."
The city provides broadband services to businesses, according to Wigington, and its four largest customers are all manufacturers. But he still sees the service as just another item on the checklist than a decision-maker.
McGrew, who serves on the Lawrence, Kansas economic development board, said that is consistent with what he experiences on the ground. Manufacturers assessing a potential site still ask mostly the same questions they did 20 years ago.
"It's [ICT] in the laundry list of things they want to talk about," McGrew said. "But when a new company's coming to town, the first thing is, `What kind of incentives do you have for us? Do you have an existing facility? And if you don't, what are you going to pay us to come?'"
The companies will eventually recognize ICT, but it's low on the list.
"If it's one of these high-tech type things, they start talking about the broadband capacity and all that, but they really want to know is whether we have any tax incentives," McGrew said.
While manufacturers are not naming ICT as a top priority, many municipal officials say they soon will. They cite their own experiences as with high-speed broadband as evidence. Municipalities that installed their own systems consistently experienced operational improvements that would apply to manufacturers' needs, according to the Fiber to the Home Council. These included:
• Systems to monitor remote inventories more efficiently
• Systems to reduce physical transport costs
• Automated meter reading
• Remote turn-on or turn-off of utilities for non-payment issues
And even if ICT becomes a necessary but insufficient site factor, most people recognize that it can make or break decisions that ultimately create thousands of jobs and millions in tax base.
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