What makes one city, state or region standout from others? How do companies, especially in an international marketplace, locate the right facility for its future growth?
As part of Bayoubuzz's focus upon economic development, we interviewed Von Hatley, the Managing Director of Jones Walker Consulting to share his thoughts about the trends and processes enabling property owner, regions and industries to connect with one another.
Below is a Google Hangout video and the interview transcript Bayoubuzz publisher Stephen Sabludowsky recently conducted with Hatley.
SABLUDOWSKY: Hi this is Stephen Sabludowsky, publisher of Bayoubuzz.com. Today we have an exciting program, were going to be talking about economic development with Von Hatley of Jones Walker Consulting. Von, why don't you tell us about yourself and Jones Walker consulting.
HATLEY: Yes, I'm the managing director of Jones Walker consulting. We're a wholly-owned division of the law firm Jones Walker and what my role is to help companies that are looking to expand or consolidate operations to seek out and identify the best places for them to improve the business model going forward.
SABLUDOWSKY: Now, Jones Walker Law firm with offices across the nation, and I correct?
HATLEY: The entire law firm has 18 law offices in 11 states which are located anywhere from New York on the east coast down the East Coast and then to Florida and then all the way over to the West Coast to the State of California.
SABLUDOWSKY: You worked in the Department of economic development for the State of Louisiana and made some great improvements in economic development--tell us a little bit about that please
HATLEY: Site Selection Magazine in around 2007 ranked Louisiana manufacturing as number one in the nation in manufacturing momentum and that was driven primarily by several things--overall market dynamics, but in addition to the work that we have done to make Louisiana more competitive by utilizing a simple sales tax apportionment formula, by eliminating sales taxes on machinery and equipment purchased in Louisiana and also by focusing a tremendous amount of effort on education and training at the time.
SABLUDOWSKY: In terms of economic development, what are companies looking for, in this economy?
HATLEY: I think the overall aspect is that they're looking for an environment that they feel that they can trust and grow in. At the end of the day, some states or some localities feel that they can WIN a project on incentives. The incentives are really just an offset of a large tax burden, created by the project and so incentives are important, but the overall cost of doing business is much more important
SABLUDOWSKY: Are companies looking for state or region that is focusing primarily on, say, K to 12 education or higher education or workforce development or something of that nature?
HATLEY: Well, you have to have a combination of infrastructure--if the company is going to locate operations they have to build roads to the facility, in addition to transportation and utility infrastructure to get a plant up and running that's much more difficult than something that is already built for the company in preparation for an investment that they were looking for. In addition to that, the workforce, some education and training--they are all very important if you look today at the market a lot of the corporations are reaching into the K to 12 level to introduce some students who are seeking new careers in their industry and to form apprenticeship programs to make that happen. You have to start off in the K to 12 area; I think fundamentally if you can look at the European model, people are choosing what their overall career path are going to be when they're 12, 13 and 14 years old. I think it sets those people on a trajectory and those students on a trajectory that allows them to be able to understand and get into industry and find a focus that fits them better. If you're from a knowledge-based industry like digital media and things like that, the advent of research and development and those types of things help those regions get those type of jobs.
SABLUDOWSKY: Obviously, economic development is very competitive like everything, so are there any trends in this industry that economic developers, states, regions, companies--are looking at--to really make a difference?
HATLEY: Well, the key thing that states are becoming more adept to answering requests for proposals from consultants. When a company is really looking to make a large decision, they may be bombarded by an initial set of 2000 questions. After those 2000 questions are answered, they may be one of 50 sites they're looking at from around the world.
That comes down to a much more detailed process with a deeper dive whether it's 50 or so questions that come into play that sort of make the move for them to get down to the short list of sites. So one of the questions you really ask is “what does one of the shortlisted sites have to do to win”. What I tell clients is, you really have to clearly separate yourself as number one from number two, and in order to do that, you can’t win on just one single aspect of a project the workforce or be it infrastructure or be it incentives or be it taxes but really --- win on each one of those areas, and if you can do that, I think that leading economic development regions of the future are really looking to raise the bar in each area that they can improve on and show that to a company. Because that is basically is trying to do as well. They're trying to get more sales, be more efficient, do things faster, do it better and do it cheaper--the regions that are able to do that, as well as companies have the best chances of success.
SABLUDOWSKY: There's always changes in market forces, government, politics, economy-- so how does industry deal with those changes?
HATLEY: Well, I think that one of things that are very important is that you have to find an economic development environment that fundamentally transcends administrations. So you really want to focus on whatever that might be, if its knowledge-based jobs or if it's high-tech manufacturing, advanced manufacturing, and in some areas, it can be a more a creative class of industries that are growing. I think the most important part is that-- whatever the strategy is--make a slight tweak over time but you really want to focus long-term on what you're trying to improve in your area.
SABLUDOWSKY: What are economic development consultants and regions doing to be more persuasive and efficient?
HATLEY:A couple things I think that are important is that--for regional and state economic development organizations, they do a real good job of mining and understanding what type of companies that you're going after. The old adage was in order to get an economic development project was-- if you do enough cold calls, eventually at some point in time that one project would come out of those cold calls, or if you attend enough shows eventually at some point in time you'll get a project out of attending the shows.
There's no time for that in the market, the market moves too fast nowadays, and so the organizations that know how to do good fundamental research, in addition to training the people, that when they do get in front of a CEO, that they listen and they understand the market dynamics, so they can talk with the leadership team about how their region fits those market dynamics and then move on from there.
You sort of raise the level of conversation for the companies and that in turn makes the company's more comfortable in making a decision to choose your region.
SABLUDOWSKY: Tell us about the process in which, say, you would be involved in a particular project.
HATLEY: Well, there are so many different ways, one of the most likely to get involved is when a company is looking on a global scale of different areas around the country and in other countries in order to do business and so they'll call on Jones Walker as a law firm and my organization as a site selection consultant firm and help us mine the initial data for the needs that they have, and it could be the access to workforce. It could be the access to transportation corridors or access to a myriad of things but what we would wind up doing is help those guys prioritize those needs and then from there identify the type of questions that they would ask and then send them a request for proposal out to the various states or various countries and then as a result of their response back to us, we would then whittle down the available sites to something that is more manageable and then move on from there.
SABLUDOWSKY: Or we talking about nationally or internationally?
HATLEY: We're working on international projects every single day
SABLUDOWSKY: Von, thank you so much and this is my last question--are there any major trends taking place in this industry?
HATLEY: A lot of states are now looking for certified sites, they have a certified-sites program, and that basically means that the local land owner, working with the regional economic development organization, has really looked at the site from a development-ready standpoint--in other words, can you walk in on day one and throw out a shovel start to construct a facility. I think, as time moves on, what you find in certified sites is they really are all certified for heavy manufacturing and so i think you'll see that over time that certified sites program, not only in the United States but around the world, will be focused on other types of sites, be it for the knowledge based-industries, the creative class or light manufacturing or heavy manufacturing because each one of those have completely different dynamics of what the needs of that project would be and I think we are starting to see that today is that regions are starting to focus on one--more than another to grow and prosper in their communities