When Will Wynn looks out over the Austin skyline, he sees a vibrant and prosperous city, seemingly bursting at the seams. Wynn is the two-term mayor of the city of Austin, Texas, one of the fastest-growing urban centers in the United States.
Back in the 1960s, Austin was primarily a college town that also happened to be the state capital. Now it is an economic powerhouse that almost always seems to be on the short list when technology companies look for a future facility location.
What happened in Austin that makes it so different? A lot of it has to do with people like Will Wynn and his predecessors in the mayor’s chair.
“I spend a lot of my time working with our business community,” Wynn said. “Whether it’s as a co-investor in programs like the Chamber’s Opportunity Austin and our Austin Technology Incubator, or simply working with an individual employer to help interface with government, it’s been rewarding for me.”
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“I spend a lot of my time working with our business community.”
— Will Wynn, Mayor of Austin, Texas
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An example of Wynn’s active involvement in attracting business to the Austin metro involved Samsung’s decision to build a $3.5 million chip plant there. According to Austin Chamber of Commerce, which serves as the regional economic development organization, Austin was in competition with China, South Korea and several U.S. states for this major semiconductor project.
During an 18-month period, the chamber facilitated weekly meetings between federal, state, city, county and school district to fine tune the incentive package for Samsung before Samsung had even made its final choice. This strategy gave Austin’s competition open information about its incentive offer but, in the end, also resulted in an expedited decision in Austin’s favor.
The Austin-Round Rock, Texas MSA ranked No. 1 in this year’s Mayor’s Challenge ranking, which is a composite of the six major research studies Expansion Management has published during the past 12 months. We also took into consideration the results of our annual Hot Cities poll of 80 prominent site location experts.
Austin was followed by Minneapolis, Raleigh, Washington, D.C., and Kansas City. Rounding out this year’s top 10 are Richmond, Pittsburgh, Omaha, Fargo, N.D., and Seattle. (Click here to view detailed ratings for the Top Business Opportunity Metros.
Austin, Minneapolis and Raleigh also finished 1, 2, 3 in last year’s ranking.
Texas led all states with seven metros making the list of 5-Star Business Opportunity Metros, an honor awarded to the top 20 percent of all U.S. metros. Missouri, Pennsylvania and Virginia were next, with four metros. Eight states — Arizona, Iowa, Kansas, Michigan, Minnesota, North Carolina, Washington and Wisconsin — each had three metros make the 5-Star list.
In all, 72 out of the 362 metros were awarded the 5-Star designation. Thirty-three states and the District of Columbia are represented on this list.
About the Rankings
Throughout the year, Expansion Management publishes a series of ratings that attempt to evaluate the potential of each of the metro areas in the United States according to a variety of major categories we feel will impact a company’s ability to be successful in that particular location.
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“UT [University of Texas] is incalculably important to Austin, first and foremost by attracting thousands of young, driven minds who want to better themselves economically, but also for the hundreds of millions of dollars annually spent on campus on cutting edge research and development.”
— Will Wynn, Mayor of Austin, Texas
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Public Schools. Our annual Education Quotient™ compares 2,800 secondary school districts nationwide, focusing primarily on results obtained (college board scores and graduation rates) by each school district. The results provide our readers with a way of comparing the type of work force they are likely to encounter in various communities across the country. After all, today’s high school students represent a community’s work force for the next 40 years.
College Educated Work Force. Our Knowledge Worker Quotient™ measures the post-secondary educated work force among the 362 MSAs. For today’s high-tech, high-value companies, the most important site location criteria of all is an educated work force, specifically in the science, medical and engineering fields that tend to drive our emerging technology industries.
Logistics Infrastructure. The Logistics Quotient™ , conducted in conjunction with Logistics Today magazine, compares metro areas according to 10 major logistics categories: the overall transportation and distribution industry climate; work force/labor costs/availability/shill levels; road/highway basic infrastructure and spending; road density/congestion/truck safety; road conditions; taxes and fees; railroad access; water ports (both river/lake and ocean); air service; and interstate highway access (both main and auxiliary routes).
Healthcare Expenses for Business. Our Healthcare Cost Quotient™ compares healthcare costs among the 50 states as a major cost for employers, who generally pick up 75 percent to 80 percent of healthcare cost for their employees. As the cost of healthcare has risen steadily during the years, so too has its impact on a company’s bottom line. As a result, healthcare costs have become an important site location factor when companies compare cities across the country, or even within a particular region.
Middle Class Affordability. Our annual Quality of Life Quotient™ compares 362 metro areas based upon cost of living, affordable housing, low crime, transportation access, good public schools, proximity to community colleges and universities, an educated work force, low taxes, and other concerns that a potential employer might have. Since companies have a choice as to where to locate future facilities, the concept here is to find locations where employees can enjoy a high quality middle class lifestyle at the lowest cost to the employer.
Taxes and Infrastructure Spending. Our annual Legislative Quotient™ measures a state’s business climate in those areas that governments are responsible for — taxes, spending on education and basic infrastructure, and managing the state’s finances. Not only do we look at the most current data on revenue and spending, we also look at five-year trends to see if things are getting better or worse.
Reputation Among Site Location Professionals. Each year, the editor’s of Expansion Management poll 70 to 80 prominent site location consultants to determine which cities their clients find most attractive when it comes to actually selecting an expansion or relocation site. America’s 50 Hottest Cities ™ .
For more information on each of these studies, visit our Web site at www.ExpansionManagement.com
University as an Economic Engine
What do the metros areas that highlight this year’s Mayor’s Challenge ranking have in common? One of the most obvious characteristics, in almost every case, it is the presence of a major research university.
“UT [University of Texas] is incalculably important to Austin, first and foremost by attracting thousands of young, driven minds who want to better themselves economically, but also for the hundreds of millions of dollars annually spent on campus on cutting edge research and development” said Wynn.
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“As a University town, education, health care and insurance have been our primary industries. As we rapidly approach a population of 100,000, we realize the importance of supporting our mainstays while developing a more diverse mix of high tech businesses, light manufacturing, service trades and small businesses”
— Darwin Hindman, Mayor of Columbia, Mo.
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As they have grown from college town to major urban center, these cities have made a concerted effort to diversify the local economy.
“As a University town, education, health care and insurance have been our primary industries,” said Darwin Hindman, mayor of Columbia, Mo., the home of the University of Missouri. “As we rapidly approach a population of 100,000, we realize the importance of supporting our mainstays while developing a more diverse mix of high tech businesses, light manufacturing, service trades and small businesses.”
Make no mistake, though. It is still the university, particularly the research universities, which fuels the local economy.
“College Station is proud to be the home of a major research institution like Texas A&M University, which serves as the economic engine for our region by attracting public and private entities in need of a highly educated work force,” said Ben White, mayor of College Station, Texas, home to Texas A&M University.
“The recent decision by the Governor of Texas to fund a $6 million Emerging Technology Fund grant for the newly established Texas Institute of Preclinical Studies (TIPS) at Texas A&M University is a true example of successful regional partnership,” said White. “College Station, Bryan and Brazos County have committed $2.5 million in support of TIPS through The Research Valley Partnership.”
Mayors as Economic Recruiters
While it is the private sector that drives the U.S. economy, it is the mayors who represent the “face” of a local community and who can play an important role in a company’s decision whether or not to establish a business operation in that particular city.
For a city to prosper, it is important that local mayors work closely with the local business community. They do this not for altruistic reasons, but because it is the best way to ensure the future economic viability of their city and region.
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“Business growth is important to us because it grows the tax base that helps us make Knoxville an even better place to live, and it creates good jobs for our citizens. It reflects the progress we’ve seen in making Knoxville a great place to live, work and raise a family.”
— Bill Haslem, Mayor of Knoxville, Tenn.
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“Business growth is important to us because it grows the tax base that helps us make Knoxville an even better place to live, and it creates good jobs for our citizens,” said Bill Haslem, mayor of Knoxville, Tenn. “It reflects the progress we’ve seen in making Knoxville a great place to live, work and raise a family.”
Mayors must have a little bit of the itinerant preacher in them. Most of them also go on business recruitment trips all over the world in an attempt to sell business leaders of the benefits of locating in their particular town.
“Yes, I have traveled with our Chamber of Commerce officials to both U.S. coasts and overseas,” said Wynn. “I like to stress what a remarkable work force we have in Austin; young, educated and creative.”
The population size of a metro is not necessarily an indication of the size of the companies that choose to locate there.
“Large, multinational corporations like Microsoft and John Deere recognize what Fargo has to offer,” said Dennis Walaker, mayor of Fargo, N.D. “These companies continue to expand their facilities and work force in the region, and prosper from the community’s value on education and our incredible work ethic. Executives know they can do business here [because] there is the infrastructure, logistics and air service necessary to handle all their corporate needs.”
And it is not just the mayor who is important to the feeling business has about a particular community. The entire local government, including the clerk in the zoning or building permit office, has to be on board.
“The Flagstaff city council had identifies economic development as its No. 1 priority,” said Scott Overton, vice mayor of the city of Flagstaff, Ariz. “The city supports a positive business climate to enhance economic development efforts”
Mayors as Regional Champions
While it is usually the largest city that gives a metro it’s reputation among the outside world, the region is generally a partnership between all of the cities and towns within the overall metro area.
“Whether you’re considering access to good jobs or good services, having a healthy economy helps everyone, and this cannot be achieved without a strong and supportive climate in which businesses can succeed,” said Ernie McAlister, mayor of Cary, N.C., part of the Raleigh-Cary MSA. “As local governments, our job is to provide a stable and supportive environment that allows for both new and existing businesses to thrive and prosper.”
Successful metros are characterized more by cooperation, rather than competition, among the various local government entities. More often than not, that cooperation is generally rewarded by companies and organizations that tend to ignore political boundaries, looking instead at the entire region.
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“As mayor of the city of Bryan, we recognize the importance of regional cooperation, partnership and economic impact. The recent decision to locate the Texas A&M Health Science Center new campus in Bryan, and the announcement by Toyo Ink of their plans to construct and operate a new state-of-the art manufacturing facility in our backyard, will have substantial regional economic impacts.”
— Mark Conlee, Mayor of Bryan, Texas
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“As mayor of the city of Bryan, we recognize the importance of regional cooperation, partnership and economic impact,” said Mark Conlee, mayor of Bryan, Texas, part of the College Station-Bryan MSA. “The recent decision to locate the Texas A&M Health Science Center new campus in Bryan, and the announcement by Toyo Ink of their plans to construct and operate a new state-of-the art manufacturing facility in our backyard, will have substantial regional economic impacts.”
Mike Ragsdale, mayor of Knox County, part of the Knoxville MSA, also looks at economic growth as a partnership venture among all the local communities.
“Knox County has a high quality of life and one of the nation’s lowest unemployment rates,” he said “When you combine this with an educated work force, we continue to be a place where companies choose to locate or expand. The creation of 22,000 new jobs and [more than] $2.2 billion in new non-residential capital investment has made our region one of the nation’s economic powerhouses. We have an opportunity to build on this success and take advantage of our world-class assets.”
“In this global economy, business leaders seeking expansion or relocation will be reading headlines on location decisions by other corporations, they will be speaking with their peers and they will quickly narrow their search to a short list of regions that are attracting major corporations and facilities,” said Dick Sears, mayor of Holly Springs, N.C. “In addition to our focused local marketing strategy, being a part of the vibrant Raleigh-Cary MSA has certainly helped Holly Springs get noticed on a national scale.“
Barry Broome, CEO of the Greater Phoenix Economic Council, sums it up nicely.
“If you don’t cooperate regionally, you wind up driving up the eventual cost in terms of public dollars,” he said. “Regional cooperation allows you to put together smarter investment packages and avoid bidding wars.”
Working with Economic Developers
For mayors to be successful in their efforts to encourage a vibrant local economy, a regional economic development organization often plays a major role.
“We leverage the region’s many assets to attract and retain businesses,” said Allen Neel, president and CEO of the East Tennessee Economic Development Agency. “We work closely with the local economic developers, chambers of commerce, county mayors and utilities in our region.”
Successful economic developers approach the task of business attraction the same way the private sector does.
“The private market evaluates markets regionally and so that’s how communities need to market themselves,” said Broome. “They look at resources like transportation regionally and economic development organizations need to tailor their efforts to reflect how industry operates.”
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“The private market evaluates markets regionally and so that’s how communities need to market themselves. They look at resources like transportation regionally and economic development organizations need to tailor their efforts to reflect how industry operates.”
— Barry Broome, CEO, Greater Phoenix Economic Council
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These economic developers are the professionals whose job it is to help translate political goals into action, and an important part of their task is to change the way the outside world looks at their community.
Take, for example, College Station, once a sleepy hamlet often referred to as being in the middle of nowhere, which has seen its population explode from around 40,000 some 30 years ago to 200,000 today.
“We are an emerging 21st century world-class metro area connected to both the Gulf Coast Megopolitan Area and the Austin-San Antonio Megapolitan area (as defined by demographers at Virginia Tech University),” said Todd McDaniel, president and CEO of the Research Triangle Partnership located in the College Station-Bryan, Texas MSA. “We have a population close to 1 million within a 60 mile radius and almost 7 million within a 90-mile radius of our offices here in the TAMU Research Park.”
As the home of the University of Arizona, Tucson economic developers are also actively building on the synergies that offers.
“We continue to work on creating competitive advantages through workforce development enhancements and the development of attractive new real estate offerings” said Stephanie McKinney, president and CEO of the Greater Flagstaff Economic Council.
Still, it is the mayor who is the public face of a community and its dreams for the future.
So what type of city is Will Wynn hoping to shape for the people of Austin?
“The most livable big city in the country,” he said. “We’ll be young, educated, attractive, safe, fit, tolerant, hip and creative.”
It’s hard to put it any better than that.
