CWS Business Attraction For EDAC

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Investor Targeting Bringing Your Strengths to the Location Selection Game EDAC/EDABC 2009 CONFERENCE September 22, 2009

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Innovation in business attraction presentation given at Vancouver EDAC/EDABC

Transcript of CWS Business Attraction For EDAC

Page 1: CWS Business Attraction For EDAC

Investor TargetingBringing Your Strengths to the Location Selection Game

EDAC/EDABC  2009  CONFERENCE

September 22, 2009

Page 2: CWS Business Attraction For EDAC

CURRE

The Reality of NowEN

TEVEN

TS

The current downturn is not a crisis per se, but instead represents the growing pains of a truly global economy

S

• Corporate, MNC strategic realities Innovation Cycle

• Changing sector base• The role of policy in shaping the future

• Opportunities for proactive planning and targeting

What can this mean for you?

© 2009, CWS Consulting Group LLC

you?

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ISSUES

The New NormalOFADJUST• Maintaining identity in the  TM

ENT

g yface of Global convergence

• Embracing shift in trends rather than onslaught of “crisis”

• Transitioning to competing• Transitioning to competing in a tougher, global market

• Requires new and different qparadigms for true success. 

© 2009, CWS Consulting Group LLC

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AGEN

Location Strategies and Investor TargetingDA

• The Location Strategy (Site Selection) Process

• Investor Targeting – A Proactive Approach

• New Priorities in Location Strategy

• Innovation

• EnergyEnergy

• Protectionism

© 2009, CWS Consulting Group LLC

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THE  LOCATION  STRATEGY  PROCESS

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INTRO

What is Site Selection?ODUCTIO

NT

Are we selecting a site,….

TOLO

CATI

….Or a home for a business

ONSTRA

TEEGY

How Do Companies (or Consultants) 

M k L ti D i i ?Make Location Decisions?

© 2009, CWS Consulting Group LLC

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LOCA

T

The follo ing b siness sit ations can trigger a need for a ne

What is Site Selection?TIO

NSTRA

T• Real Estate event (Lease Termination)

The following business situations can trigger a need for a new site:

TEGYTRIG

• Real Estate event (Lease Termination)

• Expansion 

• Market Entry GERS

y

• Mergers, and Acquisitions

• Consolidation

• Realignment 

• Business Process Change

• Market Change

• Cost Reduction

© 2009, CWS Consulting Group LLC

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LOCA

TWhat are Companies Looking For?

TIONPRIO

R

Labor Skills, Talent

Labor and Operating Costs

• All play some role

• Specific importance d d th

RITIES

p g

Partners, Customers and Vendors

depends on the use

Utilities and Other Infrastructure

Transportation and Access

Real Estate and Facilities

Business Environment, Taxation, and Incentives

Quality of Life

© 2009, CWS Consulting Group LLC

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WHAT

L ti D i i f i l l t t h th h

Who Makes the Call?TANDW

H

I l

Location Decisions range from simple real estate searches up through complete strategic reconfigurations 

E l

HO?: S

COPE

Internal

• Chief Executive Officer

• Chief Operating Officer

h f l ff

External

• Real Estate Service Provider (Broker)

• Management Consultant EANDTEA

• Chief Financial Officer

• Director of Corporate Real Estate

• Director of Human Resources

• Management Consultant

• Location Consultant

• Engineers, Architects, and Planners

AM

• Business Unit Leaders

• Legal, Tax, Public Relations

Planners

© 2009, CWS Consulting Group LLC

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THEE

The Location Process allo s companies to define their b siness needs and then narro the list

A Business‐Based ProcessEVA

LUATIO

The Location Process allows companies to define their business needs and  then narrow the list of candidates based upon best‐fit.  A business‐based methodology matches companies to locations that will meet their needs for the long‐term.  

NPRO

CESSFinal LocationField Analysis S

Business Needs Assessment

Location Screening

Final Location Selection and Incentives Negotiations

Financial Modeling Executed 

SolutionSolution

NOTE C it b bl t f j t til Fi ld A l i !NOTE C it b bl t f j t til Fi ld A l i !

© 2009, CWS Consulting Group LLC

NOTE:  Community probably not aware of project until Field Analysis!NOTE:  Community probably not aware of project until Field Analysis!

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BUSIN

Fi t U d t d d d fi th d( )

Understanding the Core DriversNESS

NEED

S

• Catalog of operations at each location in the current configuration

P i it t k t li t (i t l d t l)

First: Understand and define the need(s)

SASSESSM

• Proximity to key partners or clients (internal and external)

• Key labor requirements and recruitability

• Facility requirements MEN

T• Competitive factors

• Market factors

• Regulatory concernsLocationGoalsRegulatory concerns

• Infrastructure requirements

• Business continuity factors

T iti l i l t ti i t

Goals

• Transitional or implementation requirements

• Real or perceived barriers to change

• Govt’ assistance required (or issues to be avoided)

© 2009, CWS Consulting Group LLC

• Other key location criteria

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THEE

Front‐Loading the ProcessEVA

LUATIO

Challenge:  How can Communities enter the process earlier, and stay in the running longer?   N

PRO

CESSS

Business Needs

Location Screening

Final Location Selection and Incentives 

Field Analysis

Needs Assessment

ScreeningNegotiations

Financial Modeling Executed 

S l iSolution

© 2009, CWS Consulting Group LLC

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INVESTOR  TARGETING  – A  PROACTIVE  APPROACH

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INVES

Being a Good Host

How do we match

TMEN

TATHow do we match 

community strengths and goals to the needs of b i ?

TTRACTIO

N

business? STRA

TEGYY

© 2009, CWS Consulting Group LLC

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INVES

Reverse Engineering

Understand the link between community attributes and business needs

Investment  Market Analysis Final Investment 

TMEN

TATIndustry Targeting

Strategy Assessment

Attraction Plan

• Determine investor  goals and resources

• Determine key 

• Collect published and proprietary data on key criteria

• Construct weighting and ranking model

• Complete remediation plan as required

• Develop incentive

TTRACTIO

N

• Determine existing industry base

• Understand key dynamics for 

stakeholders• Catalog site characteristics

• Determine market and catalog regional tt ib t

and ranking model to test development candidates under prime and alternative scenarios

• Combine screening 

Develop incentive plan if required

• Develop key marketing targets and customized message and tactics for each

STRA

TEGY

selected industries• Examine availability 

of key inputs• Look for key vendors 

and partners• Determine existingattributes

• Examine existing regional and local economic base

• Establish initial strategic parameters

gresults with CWS Consulting Group experience to understand market dynamicsId if i i i l

• Develop deal structure(s)

Y• Determine existing reality and perception of benefits and obstacles in the site and regionstrategic parameters • Identify initial target 

industry candidates Investment Attraction Plan

g

© 2009, CWS Consulting Group LLC

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INVES

Location Planning for BusinessTM

ENTST

InvestmentStrategy Assessment

MarketAnalysis

Final Investment Attraction Plan

Investment Attraction Plan

IndustryTargeting

RATEG

YAS

First: Understand and define Goals and Resources

• What does the community want to achieve?  What are it’s development goals SSESSM

ENT

goals

• Which community groups and resources will participate in investor attraction?

Wh t th it i b i t b th

T

• What resources can the community or region bring to bear on the process?

• How will the plan be implemented?  How will it be made sustainable?

© 2009, CWS Consulting Group LLC

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MARK

Screening – Determining Relative AdvantagesKET

ANALYS

InvestmentStrategy Assessment

MarketAnalysis

Final Investment Attraction Plan

Investment Attraction Plan

IndustryTargeting

Economic Base and Regional Partners

General Demographics and Labor Force Dynamics

Availability of Skills and Talent

SISEconomic Base and Regional Partners

• An honest, objective and complete assessment of the community’s strengths, 

Transportation and Logistics

Education Resources weaknesses, and goals

• Provides the assessment of ingredients in the cupboard

f f

Overall Cost Base

Utility and Infrastructure Advantages• Identifies area for competitive improvement

Real Estate Availability, Suitability and Cost

Business Environment, Taxation, and Incentives

© 2009, CWS Consulting Group LLC

Quality of Life

Page 18: CWS Business Attraction For EDAC

INDUS

Identifying the Likely SuspectsSTRY

ANDU

InvestmentStrategy Assessment

MarketAnalysis

Final Investment Attraction Plan

Investment Attraction Plan

IndustryTargeting

• What is the existing regional base for the industry, and what are the dynamics

• What are the greatest pressures and opportunities facing the industry

USESELECT

What is the match between Community and Target Investors?

g p pp g y

• What typically forces changes in any of these companies’ real estate and asset strategies

• Which industry players are either facing now or will be facing a key decision 

TION

threshold in the near future

• What are the roadblocks keeping these companies from changing to meet new business demands

© 2009, CWS Consulting Group LLC

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INVES

Bringing the Story to the Potential InvestorTM

ENTATFirst: Build competitive advantage

InvestmentStrategy Assessment

MarketAnalysis

Final Investment Attraction Plan

Investment Attraction Plan

IndustryTargeting

• Develop partnerships between public agencies and private companies

• Build training programs for specific skills or a particular labor class

• Install key infrastructure

TTRACTIO

N

• Install key infrastructure

• Provide environmental remediation for key properties

• Address legal, permitting and regulatory challenges at the site level

• Address tax permitting and regulatory issues at a community or regional level

PLAN

• Address tax, permitting, and regulatory issues at a community or regional level 

• Provide funds for base financing

• Develop tailored deal structures to meet the needs of specific users and investorsinvestors

Second:  Spread the word

© 2009, CWS Consulting Group LLC

Page 20: CWS Business Attraction For EDAC

BESTCommunity First Steps

PRA

CTICES

• Understand Your Community

• Organize and Prepare

S

• Engage the Current Corporate Base

• Build Regional Strength

• Build Relationships Between Government, Business, Education, and Economic Development

D l C h t E t l I S ti E i• Develop a Coherent External Image Supporting Economic Development

• Actively Reach OutActively Reach Out

• Be Creative

© 2009, CWS Consulting Group LLC

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NEW  PRIORITIES   IN  LOCATION  STRATEGY

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INNOV

The Global Innovation ChainVA

TIONInnovation, not Cost

• Manage the stream and flow of k l d d hknowledge and research 

• Bring new products to new markets

• What is your position in that flow of development?

• Strategic, multi‐focused approach

• Interfacing Clusters = Mutual Innovation 

• Develops sub‐sectors for support or spin‐off

• Adding value to industry location

© 2009, CWS Consulting Group LLC

Adding value to industry, location and economy at large

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INNOV

Using Innovation to your Advantage

• How do Innovation Cycles work?

Wh i i l i i

VATIO

N

• What is your regional innovation cycle?

• Avoid innovation “trends” versus true “cycles”

• Use these as unfolding points of contribution for economiccontribution for economic development (targeted investment)

• Build on this for business• Build on this for business attraction/Development

© 2009, CWS Consulting Group LLC

Page 24: CWS Business Attraction For EDAC

ENERG

The Coming Fuel CrunchGY

Relative Increase in Fuel Costs(Indexed to 1996)

??

SOURCES:  Energy Information Administration, Bureau of Labor Statistics

© 2009, CWS Consulting Group LLC

Page 25: CWS Business Attraction For EDAC

ENERG

Implication for Business Location?GYANDSUUPPLY

CHAIIN

© 2009, CWS Consulting Group LLC

Source: LogicNet Users Symposium 2009, David Simchi Levi

Page 26: CWS Business Attraction For EDAC

NATIO

Buy AmericaONALP

ROT

• Original language stated that all “manufactured goods” bought by taxpayers for the stimulus be produced domestically

TECTIONISM

• CAFTA and NAFTA impact

• In fact, more than 50 nations are covered by trade treaties with the US and may be exempt

M

trade treaties with the US and may be exempt from restrictions.

• By the way, when was the Buy American ActBy the way, when was the Buy American Act first tried?  1933.

HOWEVER ‐HOWEVER 

• Border state governments have attempted to put some restrictions in place for public works spending

• Impact appears largely restricted to larger public projects

© 2009, CWS Consulting Group LLC

p pp g y g p p j

FULL IMPACT NOT YET KNOWN 

Page 27: CWS Business Attraction For EDAC

BESTCommunity First Steps

PRA

CTICES

• Understand Your Community

• Organize and Prepare

S(R

EVISITE

• Engage the Current Corporate Base

• Build Regional Strength

D)• Build Relationships Between Government, Business, Education, and Economic Development

D l C h t E t l I S ti E i• Develop a Coherent External Image Supporting Economic Development

• Actively Reach OutActively Reach Out

• Be Creative

© 2009, CWS Consulting Group LLC

Page 28: CWS Business Attraction For EDAC

GETTI

How do we excel in Attracting Investment in the “New Normal”?NGAHEA

D

• Need to be nimble

• Need to innovate

N d t thi k l b ll

DOFTH

EB

• Need to think globally

• Need to partner

BUSIN

ESSAATTRA

CTIONNCURVE

“Rules are for the interpretation of wise men and the obedience of fools.”

– Colin Chapman

© 2009, CWS Consulting Group LLC

Page 29: CWS Business Attraction For EDAC

Chris SteelePhone: (617) 314-6527Email: [email protected]

THANK YOU VERY MUCH