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This is what makes a town, city or state hot for business

What is it that makes businesses attracted to specific parts of the US—certain regions, states and towns? And what can those states and municipalities do to make themselves more attractive to companies? Figuring this out really is key to regional economic growth in the United States, and I put these questions to a panel of economic experts in Dallas, which focused on the economy of states in that particular region: Texas, Louisiana, Arkansas, Oklahoma and New Mexico.

First off, it’s worth noting that economic conditions are local—for instance what’s going on in northern Maine has very little to do with the economy of San Diego, but I would submit that you actually don’t often hear about specific regions that much. So what’s going on in that five-state region?

“There are a number of factors [that makes the economy in these states strong],” says Don Pierson, Secretary, Louisiana Economic Development, pointing to energy, of course, but also aerospace and trade with international markets. No doubt the decline in energy prices has hurt states like Texas, Louisiana and Oklahoma, but the panelists suggested the pain is less than it has been in past downturns.

The university systems were highlighted as a regional strength, with Marilyn Wiley, Dean and Professor of Finance, University of North Texas, College of Business, noting that Texas is “one of five states still growing its number of high school graduates over the next five years.” But, “fewer are coming out of high school college-ready,” she said. So challenges abound.

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Then I asked the $64,000 question: What is it that businesses want to hear from cities, states and towns in order to move to those areas?

united states map
united states map

“They want a supply of employees, they need and want community that will provide training and a good quality of life,” says Dean Wiley. “Good schools and a supportive city.”

“I sometimes see small mid-size markets struggle,” with being consistent, says Tom Stellman, CEO of TIP Strategies, Inc. It’s very important for “the county and government to be on same page when it comes to economic development and saying the same thing. To present a consistent face.”

“Site selection is data driven” initially, says Josh Bays, Principal, Site Selection Group. “But then it becomes subjective. What do they want to hear? A unified front from the community where they can see mitigated risk of uncertainty.”

Pierson has a slightly different perspective: “The more certainty you can build for the long haul, a pipeline with universities and community colleges to build a workforce longer term,” the better off you will be, he says.

“The whole notion from your economics textbook that the invisible hand will solve all the problems, having spent seven years working on projects, I can tell you, you need to help speed up that process and try to anticipate those needs,” says Stephen Barnes of Louisiana State University.

The bottom line? While economics is to a large degree local, the takeaways about what makes for a healthy business/town relationship can be broadly applied.