Urban Research Monitor
What Businesses Say They Want

Business Location Decision-Making illustrates that the process has changed markedly from even a few years ago. Location decisions in 2000 are based on availability of education, training, and a high-quality labor force as opposed to availability of land, buildings, and transportation networks. Cities can no longer take businesses for granted. Massive technological changes, mergers, and acquisitions—all of which are dramatically changing the organizational structure of businesses—mean that businesses must constantly reevaluate the best location and layout for their processes.

Cohen wrote her paper to help cities devise better strategies for attracting businesses to their downtowns. She interviewed corporate site selection managers, planning and location consultants, economic development specialists, and academics about how business location decisions are made today. She supplemented her interviews with written material found in trade literature, white papers, and industry reports.

Cohen found that education matters the most to businesses. She cites a recent survey of business leaders by Arthur Andersen in which 72 percent said that “workforce suitability” was their top criterion for selection of a city. They listed market access and cost structure as the next two most important factors. The mantra is no longer “location, location, location,” says Cohen. It is now “education, education, education.” More than any other characteristic of a potential city location, businesses need to know that they have access to a well-educated workforce—one committed to lifelong learning. In addition, if businesses want to be able to recruit high-skilled workers from other parts of the country, they must advertise that there is a good public school system in place for their employees’ children.

Cohen recommends that cities create excellent educational systems within their communities, starting with their elementary and secondary schools and continuing through to their community colleges and universities. She recommends that cities draw on the talents of businesspeople to develop educational curriculums that will prepare their future workforce to meet the job standards of companies the cities want to recruit. Cities, she says, should also develop and publicize continuous training and improvement of the skills of their adult labor market. Perhaps most important, cities must be ready to take bold action, similar to what Richmond, Virginia, did when Motorola-Siemans said it was concerned about moving there because the city did not have an engineering school nearby. Richmond worked with a university across the state to establish its own engineering school at one of its local universities.

Cohen also found that businesses are looking for communities in which they can be up and running 6 to 9 months after they have made their location decision. That means zoned, built, and fully wired with high-speed Internet capability within less than a year of moving. According to Cohen, businesses evaluate alternative cities based on how long it takes to work through the permitting process and stay away from those for which the process is inconsistent and confusing. Cities stand to gain substantial goodwill, says Cohen, if they can make major reforms in this area. She suggests that cities assign special teams to help businesses work through the red tape involved in getting permits. Linking fast-track processing to businesses willing to meet certain community goals as part of their development projects—such as constructing affordable housing—is another option.

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