As an economic developer, you regularly step into the ring to compete with other communities to attract and retain business. But unlike most competitions, only one side – businesses and their site selection consultants – knows what offers are being made.
This lack of competitive knowledge is not the result of economic developers’ disinterest. Most communities and economic development firms simply don’t have the time, effort, and resources required to develop adequate benchmarking and competitive insights.
While there are myriad rankings of states and communities published every day, they each have a different angle and motive. Most are designed to grab attention, boost readership, and/or push a particular narrative and don’t provide the rigorous analysis required to effectively inform a competitive bid.
Keep your friends close but your enemies closer
In order to give you the detailed competitive insights you need, we developed Located, a tool to help you simultaneously compete more aggressively and responsibly. Located does this by providing data-driven answers to questions that should drive your economic development pitch process:- Where have similar projects been located in the past?
- How does your community compare to your peers?
- What will other communities likely offer in incentives?
- What real estate do other communities have available?
- How does your talent profile compare to other communities?
- Can your community afford to win?
1. Where have similar projects been located in the past?
Most projects locate close to their markets (both the supply of inputs and their consumers), so the closeness (or distance) from a company’s markets will largely determine your community’s competitive positioning (Meurers & Moenius, 2020). This should not suggest that your community is incompatible for a project (South Carolina’s successful recruitment of a BMW plant outside of the traditional “auto alley” is a good example), but you should know if you are starting a competition from a position of strength or weakness.How Located can help
Located provides two important perspectives on a project:- How does this project compare to others in the industry by size (i.e., is this a super competitive project?)
- Where have other projects like yours located geographically (i.e., are you in a hot or cold zone for a specific type of project)?
Applying this insight
The historical context provided by our Located platform offers a quick signal of the competitiveness of a given project, which can be used to build support and momentum from your community for specific projects from the beginning. With this knowledge, an economic developer might make this case: “Our community is well positioned to win a project like this for X and Y reasons, but the project will be competitive so we need to present our best pitch as a community.”2. How does your community compare to your peers?
Economic developers usually have an intuitive sense of their competitors, but this sense is typically based on either geography or industry (i.e., community A has a similar concentration in an industry as your community). While this may be helpful in comparing public policies, this is not how competitive projects decide peer communities. Instead, most site selection firms take a much more nuanced, quantitative approach to defining peer communities by calculating a weighted average score that captures a dozen or more variables. Then, they let the numbers identify the best-fit locations to explore in more detail.How Located can help
The Located Location Competitiveness module identifies the top locations at the state, metro, or county levels. It pulls in dozens of key factors (e.g., number of workers by industry or occupation, labor costs and productivity, quality of the infrastructure, regulatory environment) into a dynamic index that allows you to quickly identify like communities that can then be used for comparisons.Applying this insight
Since you now have a quantitative understanding of your competitors, similar to what a business or consultant might have, you can tailor your pitch to highlight your strengths relative to your likely competition and emphasize the steps your community is taking to enhance the areas where your community may be less competitive (i.e., “we believe our community offers the best mix of high-quality yet affordable talent over other similarly sized cities close to your end markets”). Furthermore, this same data informs collaborations with elected officials and other stakeholders to advocate for policies and investments for the future (i.e., “although our community has an attractive talent pool for manufacturing projects, we fall behind other communities in the quality or quantity of project-ready sites”).3. What incentives will other communities likely offer?
Put simply, economic developers use incentives to compete. While longer-term investments in education and infrastructure provide the most sustainable competitive advantages, incentives are the near-term tools that economic developers have to distinguish their community from others. Today, economic development is one of the rare competitions where competitors rarely know who they are competing against and what their competitors may offer.How Located can help
Located provides two unique perspectives on the incentives package your competition will likely offer a company. The top-down AI Incentives Predictor forecasts a project’s likely incentives package for each of the lower 48 states based on 35,000 past projects. The bottoms-up Incentives Profitability Model analyzes over 275 economic development incentives across the 48 states to highlight which incentives a company may qualify for and how those incentives mix with other important cost factors to impact profitability.Applying this insight
Armed with this information, you can craft the most compelling incentives package that accounts for your community’s strengths while also incorporating insights into what your competition will offer (i.e., State X is your strongest competitor for a project and they will likely offer $Y million in incentives; what will or should your community offer?).4. What available real estate do other communities have?
Even if your community offers the best mix of factors—talent, business climate, quality of life—without real estate that matches a prospect’s needs, you cannot compete. If you have something that may fit a prospect’s needs, it becomes a matter of how well it fits and how much time and investment would be required to become “project ready.”How Located can help
The Located Real-Time Real Estate Portal provides you an easy and intuitive deep dive into your competitor communities’ product offering. By integrating each state’s industrial sites and buildings portfolio with commercial office space listings, the searchable Real Estate Portal allows you quick access to compare available real estate alongside location factors mentioned previously.Applying this insight
You can incorporate these real estate insights into your pitch to prospects (i.e., your community has the most suitable real estate offering(s) for X, Y, and Z reasons relative to your competition). In fact, you may realize that the communities deemed the most competitive may not have suitable real estate for a prospect, increasing your own community’s attractiveness. Furthermore, these insights could be invaluable as you work with elected officials to highlight infrastructure investment opportunities and/or policy changes that will improve your community’s competitiveness in the long run.5. How does your talent profile compare to other communities?
Talent is consistently rated as the top priority in a business location search. While some may only look at locations that offer the highest quality talent pool, no matter the cost, others may look for a balanced location offering a mix of quality yet affordable talent. Talent can mean different things to different companies, so it is critical to present a comprehensive and compelling picture of your community’s talent profile that shows why your community is the best fit for a project.How Located can help
Our Located portal examines the multi-faceted elements of the talent pool, instead of relying on simple proxies like college attainment rates or occupational counts. It presents insights on your current and future talent pool relative to other communities along three dimensions:- Our Real-time Labor Supply-Demand module compares how many workers a location has for a given occupation against how many active job postings are listed for those same types of occupations.
- Our Talent Development vs. Deployment module compares metro areas by educational attainment levels (“development”) and the mix of STEM and soft skills present in each area (“deployment”)
- Our Higher Education portal examines an area’s talent pipeline, searchable by state, school, and degree field
Applying this insight
You can use our Located tool to find the most compelling pitch for a prospect, whether it is the supply of a particular occupation in your area, the quality of your labor, the skills that your workforce holds, or your community’s future talent pipeline. Furthermore, you can use the data for benchmarking exercises to make the case for more and/or better investments in your community’s most valuable resource: its people.6. Can your community afford to win?
If your community wins this project, can it afford to host this business, economically, socially, and environmentally, among many other factors? The history of economic development in this country is replete with stories of bad deals. Just see Wisconsin’s $4.5B offer to Foxconn for the latest example (“Inside Wisconsin’s Disastrous $4.5 Billion Deal With Foxconn”). Thus, to build support for a project, no matter how exciting it may be, you will likely need to convince your elected officials and the broader public on the benefits of the project—how many jobs will be created, for whom, paying how much—as well as the costs in additional public services, congestion, and other intangible factors.How Located can help
Our Located tool estimates the impact to your community along three dimensions:- State and local revenue impact associated with each project: income (both for direct and indirect jobs created and for both operations and construction roles), sales, and property taxes.
- Estimated local costs in public services like increased demands on schools, parks, and infrastructure, among others.
- Total economic impact, including the additional “knock on” benefits using economic multipliers for sales, value added (i.e., gross regional product or GRP), earnings, and, most important to the public, jobs.
