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Corporate Relocations

12.07.2009

According to Brookings and the National League of Cities, the fiscal outlook for local governments in 2010 and 2011 is not going to be pretty. Check out Fiscal Challenges Facing Cities for a detailed accounting of the unpleasantness. What does this mean for economic developers? We need to start nailing down our priorities because city and county funding is going to be tight.

As you start to consider your work plan and budget for next year, I’d recommend perusing some of the data available at YourEconomy.org, hosted by the Edward Lowe Foundation. You can see the jobs impact of relocations, expansions, and openings of new local businesses in every metro area and county in the US. You may be surprised at what you find. For example, between 1998 and 2007, corporate relocations accounted for at least one percent of net job growth in just five states. You’d probably expect to see states like Texas and North Carolina, perennial contenders for Site Selection magazine’s Governor’s Cup, at the top of the list–and you’d be wrong. The state where corporate relocations had the greatest impact on job creation during 1998-2007: the economic development powerhouse of Delaware. According to YourEconomy.org, relocating firms from out-of-state accounted for a whopping 2.12% of net new jobs in Delaware during 1998-2007. Rounding out the top five were Nevada (1.56%), Arizona (1.33%), Kansas (1.18%), and Georgia (1.00%).

Of course, statistics can only go so far persuading your board or city council to go along with your recommendations (“You see, Mr. Chairman, IEDC publishes this salary survey…) during a tight budget year. But at least you can be ready when the discussion moves to return on investment for spending on recruitment versus other priorities such as business recruitment and expansion or economic gardening.