Positioning missouri for new business investment

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Positioning missouri for new business investment

  1. 1. Positioning Missouri for New Business Investment Presented to: Washington University – St. Louis Political Economy of Multinational Enterprises October 5, 2010 Christopher Chung, Chief Executive Officer Missouri Partnership
  2. 2. Discussion Topics What is the Missouri Partnership? How do we market Missouri for new business investment? How do companies approach the investment decision process? What are our challenges? “Lightning Round”
  3. 3. About the Partnership • Mission: To promote Missouri for new business investment, with the goal of recruiting new industry and jobs to the state • Public-private, non-profit corporation supported jointly by the Missouri Department of Economic Development and the Hawthorn Foundation • 12-member Board of Directors drawn from various industries across the state • 10-member staff focused on business recruitment (sales) and marketing
  4. 4. About the Partnership • Key objectives: Deliver the “message” about Missouri’s positive business attributes Raise awareness and visibility of Missouri as a place to do business Build relationships with decision-makers and decision-influencers Generate investment leads (i.e. Get Missouri “on the list”) Work with state, local, and private-sector partners to win the deal for Missouri Provide feedback for “product development”
  5. 5. About the Partnership • Rationale: Need for consistency in marketing efforts Need for continuity in sales relationships Engagement of private-sector resources Effectiveness of public-private partnership model  Enterprise Florida  Economic Development Corp. of Utah  Ohio Business Development Coalition  Econ. Dev. Partnership of Alabama
  6. 6. About the Partnership • Economic development is: Retention and expansion of existing business Growth of business start-ups Recruitment/attraction of new businesses • Our role is to: Market Missouri with the goal of new business recruitment “Get Missouri in the game, and then win the game.”
  7. 7. Our Marketing Strategy The “Air Campaign” • Goal #1: Raise the image of Missouri as a business location • Goal #2: Shape a positive perception of Missouri as a place to do business • Achieved through: Branding – “Real People. Real Opportunity.” Advertising Earned media Digital (web, social media, SEO) Thought leadership
  8. 8. Our Marketing Strategy The “Air Campaign” • Key elements include: Focus on relevant industry assets Peer-to-peer testimony involving successful Missouri businesses Highlighting improvements to the state’s business climate, positive rankings or acknowledgments for Missouri, and recent business recruitment successes
  9. 9. Missouri “Business or Pleasure?” ad in Southwest Airlines’ in- flight Spirit magazine (April 2010)
  10. 10. Missouri “Business or Pleasure?” ad in Southwest Airlines’ in- flight Spirit magazine (May 2010)
  11. 11. Missouri “Business or Pleasure?” ad in Southwest Airlines’ in- flight Spirit magazine (June 2010)
  12. 12. Missouri “Business or Pleasure?” ad in Southwest Airlines’ in- flight Spirit magazine (September 2010)
  13. 13. Missouri “Real Story” ad in Chicago market editions of Forbes, Fortune, Fast Company, Inc., Money, and Business Week (March 2010)
  14. 14. Missouri “Real Story” ad in Atlanta market editions of Forbes, Fortune, Fast Company, Inc., Money, and Business Week (April 2010)
  15. 15. Missouri “Real Story” ad in Atlanta market editions of Forbes, Fortune, Fast Company, Inc., Money, and Business Week (May 2010)
  16. 16. Missouri “Real Story” ad in Chicago market editions of Forbes, Fortune, Fast Company, Inc., Money, and Business Week (September 2010)
  17. 17. “Welcome to Missouri” ad (featuring Unisys) in Washington D.C. market editions of Forbes, Fortune, Fast Company, Inc., Money, and Business Week (September 2010)
  18. 18. Missouri “Real Renewal” advertorial supplement in North American Clean Energy (March 2010)
  19. 19. Missouri back-office advertorial supplement in Business Facilities (May 2010)
  20. 20. Missouri “Real Story” ad in Next Generation Pharma (February 2010)
  21. 21. Our Marketing Strategy The “Ground Campaign” • Goal #1: Develop and manage relationships with decision-makers and decision-influencers • Goal #2: Initiate face-to-face conversations regarding potential expansion/relocation plans • Achieved through: Conference sponsorships Trade show exhibitions Consultant outreach and hospitality events
  22. 22. Our Marketing Strategy The “Ground Campaign” • Key elements include: Focus on corporate real estate directors, site location consultants, international trade commissioners, and other decision influencers Cooperative approach with partner organizations Consistent use of Missouri business brand
  23. 23. Missouri trade show exhibition booth at Paris Air Show (2009)
  24. 24. Missouri trade show exhibition booth at China Overseas Investment Fair (2009)
  25. 25. Missouri exhibition pavilion at WINDPOWER 2010 in Dallas
  26. 26. Governor Nixon with the Missouri team at WINDPOWER 2010 in Dallas
  27. 27. The Investment Decision • The investment decision process: Win the right to compete  Achieved through marketing effort Win the competition  Achieved through recruitment/sales effort Win the repeat competition  Achieved through retention/expansion effort
  28. 28. The Investment Decision • Top 10 factors in investment decision:  Cost of labor (1st)  Highway accessibility (2nd)  Tax exemptions (3rd)  Energy availability and costs(4th)  Corporate tax rate (5th)  Availability of skilled labor (6th)  Occupancy and construction costs (7th)  State and local incentives (8th)  Availability of internet/telecom (9th)  Inbound/outbound shipping costs (10th) Source: Area Development 2009-10 Corporate Survey
  29. 29. The Investment Decision • Other relevant factors in investment decision:  Low union profile (11th)  Availability of land (T-12th)  Availability of buildings (T-12th)  Right-to-work state (14th)  Proximity to major markets (15th)  “Fast-track” permitting (16th)  Environmental regulations (17th)  Availability of financing (18th)  Proximity to suppliers (19th)  Employee training programs (20th) Source: Area Development 2009-10 Corporate Survey
  30. 30. The Investment Decision • Other relevant factors in investment decision: Raw materials availability (21st) Availability of unskilled labor (22nd) Accessibility to major airport (23rd) Proximity to technical university (24th) Railroad service (25th) Waterway/ocean port access (26th) Source: Area Development 2009-10 Corporate Survey
  31. 31. The Investment Decision • What we can control… Highway accessibility (2nd) Tax exemptions (3rd) Energy availability and costs (4th) Corporate tax rate (5th) Availability of skilled labor (6th) State and local incentives (8th) Availability of internet/telecom (9th) These competitiveness factors can be influenced by state and local public policy decisions.
  32. 32. The Investment Decision • And what we can’t… Cost of labor (1st) Occupancy/construction costs (7th) Inbound/outbound shipping costs (10th) These competitiveness factors are unlikely to be influenced by state and local public policy decisions.
  33. 33. The Investment Decision • Factors cited when Missouri is eliminated from consideration for new investment projects: Insufficient real estate “product” Uncompetitive incentive package Total business costs Less-than-ideal interstate access Generation mix for local utility provider What about Missouri’s right-to-work status?
  34. 34. A Word on Incentives “Incentives make a good site better. They don’t make a bad site, good.” - Anonymous
  35. 35. A Word on Incentives • Typically a tie-breaker late in the decision-making process Finalist options are similar in other location factors (e.g. workforce, logistics costs, etc.) Company becomes increasingly price- sensitive Incentives are one of the few cost variables within control of the state and local government Incentives negotiation and consulting services as a fast-growing specialization
  36. 36. A Word on Incentives • Incentives remain an integral part of a state’s competitive toolbox even after “reform”  Ohio example  Comprehensive business tax reform in 2005  Five job-creation tax credits remain in place  Texas example  No personal income tax  Frequently rated one of the “best” states for business  Still maintains a $300 million “deal-closing” fund
  37. 37. A Word on Incentives • How does Missouri stack up? Job creation tax credits are well-received (due to ability to sell, transfer, or have refunded) Training programs are an overall positive Limited availability for infrastructure and site development funding Limited access to capital for fixed-asset investment (and early-stage companies) No “deal-closing fund” No industry-focused incentive programs
  38. 38. Our Challenges • Product awareness Raising the visibility of Missouri and its economic development potential Shaping a positive perception of Missouri as a place to do business Identifying unique assets to market • Product development Investments in education and infrastructure Business climate improvements (e.g. incentive toolbox, regulatory process) Targeting growth industries that complement Missouri’s natural strengths and advantages
  39. 39. “Lightning Round” / Q&A
  40. 40. What are Missouri’s targeted industry sectors?
  41. 41. U.S. Wind Energy Resource Map
  42. 42. Blades Nacelle Tower Wind turbine in Northwest Missouri
  43. 43. U.S. Solar Energy Resource Map
  44. 44. U.S. Biomass Resource Map
  45. 45. What recent successes has Missouri seen in recruiting new business investment?
  46. 46. IBM executive Tim Shaughnessy at the company’s announcement ceremony in Columbia for “Project Tiger” (May 2010)
  47. 47. Unisys executives join the Governor and Mayor of St. Louis at the company’s announcement ceremony in St. Louis for “Project Remote” (June 2010)
  48. 48. What states and countries does Missouri compete most frequently with?
  49. 49. Overall Rankings (1st = Best State for Business) Source: CNBC “Top States for Business” 2009 Nebraska Kansas Oklahoma Arkansas Tennessee Kentucky Illinois Iowa Missouri
  50. 50. From the 2009 China Overseas Investment Fair in Beijing
  51. 51. What is the Missouri Partnership’s interaction with elected officials, and how important are those officials in recruiting new business investment?
  52. 52. What policies have the most impact in helping a state attract new business investment?
  53. 53. What policies have the least impact in helping a state attract new business investment?
  54. 54. What about China?
  55. 55. 0 50000 100000 150000 200000 250000 300000 350000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Foreign-Direct Investment in the U.S., 1998-2008 (in $USD 000s) Source: InvestAmerica.gov, courtesy of U.S. BEA
  56. 56. Outbound FDI Flows from China Source: Organization for Economic Cooperation & Development, 2008
  57. 57. What career choices or options should interested students pursue?
  58. 58. Further links of interest: www.iedconline.com (“Job Center”) www.showme.org (“Job Openings”) www.ildevelopmentcouncil.org
  59. 59. Christopher Chung Chief Executive Officer Missouri Partnership Office – 314.725.0949 Cell – 573.808.0089 Chris@MissouriPartnership.com

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