Assorted Links Monday

The Site Selectors Guild 2020 – 2021 Annual Report is out.

These charts of the economy during World War II are reassuring:  The U.S. ramped up the war effort without crushing personal consumption.

Bring Me A Shrubbery

by Dean Barber.

I should begin by acknowledging my guilt in perpetuating the myth of the omnipotent and all-knowing site consultant.

The truth is that I was never very good at pulling off such a charade. Now when I meet with economic developers, which I have been doing as we come out of this horific pandemic, I will fess up.

Yes, BBA can and occasionally does do corporate location analysis, I tell them, but the overwhelming majority of our work is in fact economic development consulting. Just so you know. Really, no need to genuflect. Prefer you not.

Economic developers who attend these site consultant events, and I have attended two quite recently, do so with the hope that one day a site consultant may someday bring them a corporate investment project. It's a big hope and can be a long wait.

Some years ago, an economic developer, a friend now retired, told me that he went to a large consultant event year after year, at considerable expense to the utility company where he worked. What I found particularly interesting is that he said he never believed his attendance would result in his region winning a capital investment project.

"Then why do you go?" I asked.

"Because it is expected of me," he replied.

Last week, one economic developer asked me this at a consultant event, and I'm not making this up: "Dean, what would it take for you to bring a project to my region?"

Because I revel in the absurdities of life, I was tempted to quote from a Monty Python skit, "Bring me a shrubbery. When you have found it, you must place it here, next to this shrubbery, only slightly higher, so we get the two-level effect with a little path running down the middle."

My actual answer was: "Well, it would first take a client that would want to consider your region, which I like by the way. But honestly, the chances of me bringing you a project is very remote."

She was a bit stunned by that. Apparently, no consultant had ever told her such a thing.

But her question really goes to the heart of why these consultant-centric events are held. Too often, the economic developers consider the words of the consultants as golden, whereas I have concluded that consultants can be just as ill-informed as anyone.

I still remember one stating with absolute certainty at an event several years ago here in Dallas that there would be no trade war with China.

But the faithful come to these events, which tend to perpetuate the myth that business attraction matters first and foremost -- never mind that in any given community three-quarters of all new jobs are created by incumbent employers --and that site consultants somehow possess a greater and deeper knowledge of industry trends. Forget that you can learn more about industry trends by studiously reading one week of the Wall Street Journal than by attending a consultant event.

The truth is that for most places, business retention and expansion, entrepreneurial development, and workforce development are far more effective strategies for job creation and capital investment than industry recruitment.

No doubt, some economic developers on their quest for their holy grail capital project will wholly reject what I say. No doubt some puffed-up consultants will be offended. Such is life.

From the BBA Economic Digest: Special Free Edition by Dean Barber.  Subscribe here.

This shipping dashboard shows why you should Christmas shop early: Container shortages remain, but there’s a new challenge — gridlock at the world’s biggest ports.

The coming regime shift towards capital-heavy companies; Structural shifts will require more investment in technologies and supply chains:

The investment regime of the past two decades was dominated by capital-light business models and a focus on investing in faster-growing companies.

We see this changing, with capital-heavy models and investment in companies that are currently considered undervalued coming to the fore as short-run capacity pressures and longer run structural themes combine.

Episode #8 of the Econ Dev Show Podcast is live.

Patrick Pierce moved from a large organization in Washington state to a small town in North Carolina, and he says that the coopetition is the same everywhere.

Listen now.