CLEVELAND, OH — July 11, 2005 — “Among today’s big city mayors, attracting businesses — and the new jobs and tax revenue they bring with them — is priority No. 1,” said Bill King, chief editor of Expansion Management magazine. “Competition among cities is fierce and, despite their notoriety, incentives are not the difference maker when it comes to why businesses choose one city over another. Being able to satisfy a company’s long term business requirements is much more important, and the most successful cities realize that fact.”
Expansion Management is a monthly business magazine for executives of companies that are actively looking for a place to expand or relocate their facilities within the next one to three years. Every year, the magazine’s award-winning research department conducts a number of studies that compare communities according to a wide variety of characteristics important to corporate site selectors.
In this year’s rankings, Texas led all states, with seven metros earning the coveted “5-Star Business Opportunity Metro” distinction. Missouri, Ohio and Virginia each had five metros that earned top honors, while Pennsylvania had four. In all, 32 states had at least one “5-Star Business Opportunity Metro” on this year’s list.
The “5-Star” designation represents the “gold standard” for cities in Expansion Management’s various annual metro “Quotient” studies. It is awarded to the top 20 percent of the 362 metro areas, and cities that earn this distinction can rightfully consider themselves to be among the elite in that particular category (i.e., publics schools, health care costs, logistics infrastructure, etc.).
“Most metros have at least one area of strength when it comes to attracting business,” said Bill King, chief editor of Expansion Management. “These metro areas that made this list are strong across the board. For employers who are trying to find the best location for a new manufacturing facility, distribution center, or regional headquarters, these cities represent an excellent value.
“During the course of the year, we try to look at the various metropolitan areas from a wide variety of perspectives,” said King. “Like most of our readers, we have a tendency to emphasize labor and operating costs in our studies.”
Here are the seven major studies and surveys, conducted during the past 12 months, that made up the Mayor’s Challenge competition:
Ø Education Quotient TM — the backbone of our manufacturing work force is still the high school graduate, and the EQ evaluated 2,800 school districts (about 35 percent of all high school degree-granting districts) nationwide as a way to provide our readers with a basis for comparing the type of work force they are likely to encounter in various communities throughout the United States. The EQ focuses on results, not on spending, with the main emphasis placed on how much students learned (college board test results) and whether they finished what they started (graduation rates).
Ø Health Care Cost Quotient TM — the HQ looks at health care as being a major cost for employers throughout the nation. It is also something that varies from community to community in terms of cost and availability. This year’s HQ compares all 50 states according to a variety of categories that measured both the availability of quality health care services and the cost to employers of those services. In this ranking, cost is just as important as quality, and vice versa.
Ø Quality of Life Quotient TM — most Americans aspire to a middle class lifestyle, which is available in every community in the country. The only difference is how much it will cost to buy into that lifestyle and, as everyone knows, that cost varies widely from city to city. That is where it becomes a business, as well as a site selection, factor. Based upon that philosophy, our annual Quality of Life Quotient TM compares all 362 MSAs according to nearly 50 different factors organized into nine broad categories — low crime rates, affordable housing, quality public schools, reasonable standard of living, spouse employment opportunities, adult education levels, traffic and commuting, continuing education opportunities for adults, and commercial air access.
Ø Logistics Quotient TM — the LogQ, produced in partnership with Logistics Today magazine, attempts to compare the logistics infrastructure and work force among the various metro areas nationwide. This study looks at the logistics work force and logistics companies within each of 362 MSAs, as well as the transportation infrastructure (road, air, rail and water) servicing that metro. The study also looks at taxes and fees imposed on logistics activities in those cities. Since most logistics decisions are driven by the need to locate in a particular geographic region, corporate site selectors can use the results of this study to evaluate how cities did on a national, as well as a regional, basis.
Ø Knowledge Worker Quotient TM — the KQ attempts to identify where companies in the knowledge-based industries are most likely to find the workers they need, both in terms of quality and quantity. It compares all 362 MSAs according to such criteria as the percentage of scientists and engineers in the overall work force, the number of patents issued per capita, the number of colleges and universities (and community colleges) in the metro area, as well as university research and development spending. The idea is to identify where companies are most likely to find that critical mass of highly-educated, technical worker so essential to the “knowledge economy.”
Ø Legislative Quotient TM — the LQ attempts to compare the business climate created by the 50 state legislatures in terms of the areas over which they actually have control: taxes and government spending. While all politicians love to take credit for a good economy (but are nowhere to be found when it comes to taking credit for a bad economy), it is in the type (e.g., corporate income tax, sales taxes, franchise taxes, excise taxes, inventory taxes, etc.) and degree (e.g., the tax rate) of taxes levied on local businesses that they have their greatest impact on the local economy. Right behind that in terms of importance to business is how these legislatures choose to spend the money they raise, specifically in the areas of education and infrastructure.
Ø America’s Hottest Cities TM — this year, for the first time, we also included the results of our 8th annual poll of 80 prominent corporate site consultants. This is a perception poll, not unlike the opinion polls taken daily by politicians, news organizations and other firms attempting to take the pulse of a certain group on a particular issue. In this case, our goal was to find out which cities their clients find most attractive when it comes to selecting an expansion or relocation site.
For a copy of the 2005 Mayor’s Challenge article, visit Expansion Management’s Web site at www.ExpansionManagement.com
Means the article is accessible only to our magazine subscribers.
