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Is ICT Still a Driving Force?

Although the availability of ICT services is sometimes taken for granted, it's not a given when a company is considering locating in a rural or remote area or in a foreign location.

Feb/Mar 09
We live in the Information Age. It's an age in which companies and individuals seemingly rely on information and communications technologies (ICT) to make the world go around. Yet when it comes to site selection, ICT was ranked low on the totem pole of important factors, according to Area Development's 2008 Corporate Survey.

ICT is a blanket term that includes equipment or technology involved with the communication of information. The U.S. Census Bureau released a study in March 2008 (the latest available survey) that reveals U.S. businesses spent a total of $250.7 billion on ICT equipment in 2006. Doubtless, ICT is vital in today's global economy, especially with distributed work forces and global clients.

But despite these facts, the "availability of advanced ICT services" factor fell dramatically in Area Development's 2008 Corporate Survey. It was ranked "very important" or "important" by only 55.5 percent of survey respondents. By contrast, 82.2 percent ranked this factor as "very important" or "important" in the previous year's survey.

Is ICT less of a concern in a nation that has focused on bringing broadband Internet capabilities and wireless technologies to the most rural areas? Or is the nearly 30 percent decline in ICT interest simply a fluke?

"ICT is absolutely essential to the way we do business these days," confirms Les Cranmer, a senior managing director at Studley in Philadelphia. "Thirty or 40 years ago, we used to focus on sewage capacity. You'd look at large cities or small towns and ask about the ability to provide adequate sewage for manufacturing plants. Today, it's important but it's an accepted fact. Now, we are also moving beyond technology to other concerns."

ICT: Is It Really a Given?
Again, ICT is undeniably an essential factor. Apparently what has changed is the emergence of other factors that are more important in the eyes of site selectors.

Companies expect telecommunications infrastructure to be in place: it's a necessity, not a nice-to-have amenity, according to Nancy Musselwhite, a senior consultant at Geo Strategy Partners, a research and strategy consulting firm in Atlanta.

"IT rules every business from headquarters to data and call centers to distribution centers to manufacturing locations," she says. "The community that doesn't understand that does not get many looks from site selectors."

ICT has become ubiquitous, and because of that, it's less of a concern than many other site selection categories, echoes Trevor Ragsdale, executive vice president of Jones Lang LaSalle's supply chain and logistics solutions team. There are, of course, some caveats to that statement.

"In some cases, while doing greenfield projects, the availability of ICT is a problem," Ragsdale admits. "However, this can typically be overcome with economic incentive grants to bring service to a site, especially when a company is contemplating the creation of new employment."

While ICT is a given, however, Mark Sweeney, a principal at McCallum Sweeney Consulting, a business and economic development consulting firm in Greenville, S.C., says site selectors aren't taking it for granted. Site selectors are taking steps to verify the robustness of the ICT infrastructure, particularly for manufacturers and distributors that are looking at rural or less-developed areas.

"You can still go into rural areas that don't have adequate technology infrastructure," Sweeny says. "All of a sudden, ICT becomes a very important factor for that project in that location. But generally speaking, it's no longer a geographic differentiator."

Ron Pollina, principal of Pollina Corporate Real Estate in Park Ridge, Ill., offers one more possible explanation for the decline in the number of site selectors that rated advanced ICT as a "very important" factor: economic trends.

"Site selectors aren't working with as many technology-intensive companies today," Pollina offers. "Manufacturing isn't the only industry losing jobs. High-tech isn't growing in this country. So the downgrade in importance could have to do with the fact that there's less demand for it."

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