Nearly every part of the United States
and the world has labeled itself “Silicon” something.
Valley, Alley, Prairie, Forrest, just
to name a few.
Maybe they think that, if they name it,
you will come.
But it takes more than slogans and marketing
to make a location the right destination for your expanding high-tech company.
Nope, you need a dose of “Dragnet” Sgt. Joe
Friday’s “the facts ma’am, just the facts,”
before you settle on a site.
Expansion Management Magazine has consulted
experts and companies on the move, and offers these seven essentials for
expanding computer and high-tech firms.
Your location decision won’t be truly
successful without:
1. The right
work force
“The geeks have inherited the earth,”
Lee Sutterfield, president of SecureLogix Corp., told the San Antonio Express-News.
That means it’s important to choose a
location with enough techno-geeks, or at least potential nerds, to support
your firm.
Dell Computer Corp. knew Nashville, Tenn.,
was not a leading technology center when it chose the city for its first
campus outside of the Austin, Texas, area.
But the company has been flooded with
applicants since it announced plans in May for its multi-plant and service
campus. The operations will likely employ 5,000 within five years.
“We found the employee base matched our
needs well,” said Kip G. Thompson, vice president of worldwide real estate
and facilities for Dell. “We did a lot of research to understand that our
pioneering efforts would be ... pioneering with good results.”
The Nashville area offers a large pool
of manufacturing technology employees who are looking for a job or a job
change. Dell officials were also impressed with local schools, technical
colleges and universities.
The Nashville area boasts 85,000 post-secondary
students with 17 universities and colleges, including Vanderbilt and Middle
Tennessee State — the fastest growing university in Tennessee with an enrollment
of 20,000.
“That ... led us to believe that while
there wasn’t a technical work force already in place, that work force could
be developed quickly,” Thompson said. “So the groundwork was in place.
“Our sense was that there was a good strong
work ethic in the area. We conducted extensive interviews of current companies
and inquired as to the work ethic of the people.”
Interactive Pictures Corp., known
as IPIX, is also expanding rapidly in Tennessee. The firm, which went public
this year, has grown from 20 employees in 1997 to 200.
In 1997, IPIX, a leader in interactive
imaging for the Internet, outgrew its Knoxville facility and moved to Oak
Ridge, in part, to be near Oak Ridge National Laboratories. IPIX was launched
to commercialize technology developed at the laboratories.
“It (the move) was important from an image
perspective and also from a practical and pragmatic perspective to be near
its scientific roots,” said IPIX spokesperson Robert Cathey. “There’s such
a wealth of highly technical talent in that area.”
2. The right
education
Universities and technical training programs
are engines for the growth of the computer industry.
They provide not only employees, but opportunities
for collaboration, points out Dennis Donovan, a principal of the Wadley-Donovan
Group, a site selection consulting firm based in Morristown, N.J.
Software firms, in particular, can benefit
from a university presence.
“They’re locating around a lot of university
areas that have real strong computer science programs,” said Dan Rogers,
a former Motorola executive who runs Rogers Consulting Group in Austin.
Education is making a difference in areas
not traditionally associated with high-technology.
For example, Arkansas’ high-tech sector
has high hopes that a new college will improve the state’s technical environment.
The University of Arkansas-Little Rock’s
new College of Information Science & Systems Engineering consolidates
previous technology curriculum and offers new major and minor programs.
The new systems engineering degree includes
an emphasis on telecommunications, partly because of the demand from Little
Rock-based Alltel, a rapidly expanding telecom company. Other large information
technology players in Arkansas include ESI Group and Arkansas Systems Inc.
The new programs address an instructional
void and will help to speed the attraction of high-tech companies to central
Arkansas, said Mary Good, interim dean.
“Central Arkansas is a wonderful place
to live,” she said. “It beats Silicon Valley all to pieces.”
In South Carolina, companies including
Policy Management Systems Corp. are taking advantage of the technical training
the state offers to expanding firms.
PMSC, a software and electronic commerce
systems firm based in Columbia, partnered with the state’s technical college
system and Midlands Technical College to receive training through the Special
Schools program.
Midlands instructors provided two-years
worth of instruction for 40 hires in an intensive nine-month period.
“They are just totally immersed in software
development,” said James L. Hudgins, executive director of the South Carolina
Technical College System in Columbia.
PMSC provided a stipend for the students,
provided they agree to join the firm upon completion of the program. The
state pays for the training, provided the company meets job creation requirements.
Other cities, like Abilene, Texas, have
educational programs in place and are actively recruiting firms as an incentive
to keep their technical graduates at home. Abilene has three private universities
offering information technology degrees.
In Richmond, Va., White Oak Semiconductor
began production last year at its $1.5 billion plant. Motorola also has
plans for a $3 billion semiconductor facility in the area, with construction
expected to begin by next year.
Supporting the growth of technology industries
is a new school of engineering opened in 1997 at Virginia Commonwealth
University. In addition, the Work Force One program gives executives input
into curriculum development in high schools, vocational schools and colleges.
Some of Northern Virginia’s high-tech
employee shortage is beginning to be filled by Richmond workers as firms
move south.
3. The right
infrastructure
If you’re a high-tech manufacturer, infrastructure
can be crucial to your success.
New York state has taken the initiative
to ensure that requirements are in place for semiconductor firms through
its SEMI-NY program. SEMI-NY pre-qualifies and pre-permits sites, speeding
the location and construction process. Thirteen locations were selected,
all having met strict criteria for infrastructure, land, power, transportation,
work force and higher educational institutions.
For Internet-based firms, an advanced
telecommunications infrastructure is critical.
In Pennsylvania, the state has given data-driven
companies a head start with its Technology Atlas, which outlines the high-tech
data, voice and video infrastructure in the state. Nearly 11,000 organizations
were surveyed to collect the data, which will be continuously updated.
The database can be accessed on the Internet (www.technology.state.pa.us/atlas)
and supports the creation of customized technology maps.
In Virginia, Intel Online Services has
chosen Fairfax County for its first East Coast location, a $130 million
Internet service center. The company will occupy a 73,000 square foot facility
near Dulles Airport.
“A large and growing proportion of the
world’s Internet traffic flows through Virginia,” said Mike Aymar, vice
president and general manager of Intel Online Services. “That made Virginia
a natural location for Intel’s expanding Internet services hosting business.”
4. The right
logistics
In any industry it’s important to determine
how a location will facilitate the movement of people and goods.
San Antonio’s presence on Interstate 35
was important to Amnitek’s capability to serve customers in Austin and
Houston. The company chose San Antonio this year for its 90,000 square
foot computer casings plant and headquarters.
In New Jersey, NextVenue announced its
headquarters would move to New York City, bringing 100 employees
and an investment of $5 million. The company expects to grow to 300 workers
in two years. The new media company is relocating, in part, to be closer
to its Wall Street customers.
“We will be able to better serve the financial
community’s business-to-business needs,” said Nicholas Balletta, president
and CEO.
5. The right
quality of life
If you’re planning a facility that will
need personnel from other locations, then make sure it’s hip for the crowd
that likes hip hop.
“The location needs to ... maximize a
company’s ability to recruit and retain those hard to find technical skills,”
said Donovan. “It’s got to be a location where a company will receive unsolicited
resumes.”
NewTek, a software company that develops
applications for video and film editing and special effects for movies,
moved to San Antonio from the Midwest, in part, to appeal to young high-tech
workers.
“We have to be in a place where we can
attract young people to our industry and San Antonio is one of those places,”
NewTek President and CEO Dwight Parscale told the San Antonio Business
Journal.
6. The right
industry mix
States with concentrations of high-tech
employment offer a strong foundation for newcomers and expansions. No company
wants to be a high-tech loner that lacks
operating support and a supply of local
manpower.
A “critical mass” of computer industry
firms, higher educational institutions and a talent pool within 100 miles
are important for software and R&D firms, said Donovan.
California, the leading state for the
computer industry, has already seen 152 computer and Internet technology
companies expand or move in this year, and more than 300 during the past
two years.
7. The right
business climate
As with any type of company, operating
costs are important. So is the reception from state and local leaders.
Cost-cutting was a factor in Frost &
Sullivan’s move to San Antonio. The company, an international research
and consulting firm that focuses on technology, opened its Texas office
in June. It has U.S. offices in Mountain View, Calif., and New York City.
“Our other two U.S. locations are in the
most expensive places in the country to live and do business,” Troy Kohut,
managing director of the San Antonio office, told the San Antonio Express-News.
“The costs are much lower here.”
Be sure to find out what incentive programs
are available and how state and local taxes will impact on the specifics
of your operation.
The facts are
in, ma’am
Well, those are the facts, ma’am. Although
your firm has its own unique needs, your expansion won’t be a true success
unless you’ve addressed these seven biggies.
Sgt. Friday says the case is closed. The
facts have been presented, Perry Mason style. Now it’s up to you to decide
which location is best.