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2010's Most Important Locational Trend

Author: Robert Ady
01/10/2010

It's that time of the (new) year when all the noted soothsayers and prognosticators make their predictions about everything from the traditional economic metrics to the length of women's skirts, from divorce rates to world series contenders, and from political winners to the latest food craze. Fortunately, or unfortunately, such is not the case with what will be this year's most important locational trend.

And, of course, the trend I'm suggesting is the continued increase in the level of competition among economic development groups to attract and retain businesses. The pressure for new jobs and business investment is greater now than it has ever been. Nations, states, regional, and local entities are in hand-to-hand combat. Needless to say, the state of our economy is the major driver of this trend today but other factors are contributing as well. Let's go through a few of the more relevant indicators which will maintain competitive pressure on the environment in which EDO's will operate.

Work Force Trends With 15.3 million people currently unemployed in the U.S. and an additional 100,000 jobs needed every a month just to keep up with a growing population, it will take a frenetic pace of job creation to bring jobs and workers into balance anytime soon, keeping long term pressure on EDO's.

Substitution of Capital for Labor Although this will lead to new investment, it is counterproductive to the demand for job creation. This happens as more sophisticated machinery and equipment is substituted for labor thereby increasing the productivity per man hour.

Sheer Number of Economic Development Organizations According to my count, the latest issue of Area Development magazine listed over 2000 EDO's in the U.S. alone despite the fact that there have been a number of consolidations during the past year. More reductions can be expected in the future due to budget constraints and overlapping jurisdictions but the sheer number of EDO's will remain surprisingly high, continuing the fierce competition among EDO's for new jobs and investment.

More Political Involvement Recognizing the importance of job creation for their constituents, more and more politicians at all levels of government are demanding and receiving major roles in business attraction and expansion. Historically, local mayors and governors were involved in major project competitive battles but now representatives from national offices are also weighing in. Increased leverage from politicians greatly raises the ante and places more pressure for job creation success on EDO's from states to local groups.

2010 will not be a year for reflection but a year all EDO's will need to secure a competitive edge. Success in the competitive arena of business attraction and retention will require well thought out and implemented marketing programs from initial web site design to final negotiations and new project signing.

The economic development community has been confronted with many daunting challenges over the years and has always responded successfully. I would expect the same in 2010.

Join Bob and Janet Ady, President of Voltedge, to learn the other top trends that will affect E.D. in 2010. For more information, visit www.Ady- Voltedge.com/upcomingwebinars.php