A few weeks ago, Ady Advantage’s Strategic Planning Project Manager Jason Vangalis and Lead Researcher Ashley Scray attended IEDC’s Annual Conference and Strategic Planning Workshop in Toronto. They enjoyed catching up with some of our current and former clients, networking with a variety of economic developers, and hearing about the latest economic development trends. As you can imagine, the buzz word at the conference was “Amazon.” However, as they listened to speakers and talked to economic developers, it became apparent that Amazon is not the only disrupter in the world of economic development today.
The economic development industry is one that is constantly changing and evolving. As economic development professionals, it is important to stay on top of disruptions and be aware of how they will impact your communities. Below are some of the biggest disruptions we heard throughout the conference, as well as our advice on how to stay ahead of the curve.
- Companies are becoming more public with their site location decisions (i.e., Amazon, Toyota/Mazda, etc.). Although a majority of companies still don’t want their site selection projects out in the public until a final location is ready to be announced, we are now seeing companies take a higher-profile, crowdsourced-type approach to site location decisions. These types of high-profile projects can be enticing, but it is important for local EDOs to keep stakeholders and elected officials focused on what the community can realistically support. It is okay to turn some of these projects down!
- Company structures and service models are changing. Uber is one of the biggest passenger transportation companies, but it owns no cars; Airbnb is one of the largest accommodation companies, but it owns no hotels. These types of non-ownership models change the economic development landscape in terms of supply chain, labor pool, transportation, and so on. EDOs and communities that are more progressive may be at an advantage to more traditional communities.
- Merger and acquisition activities are expected to continue. EDOs should be aware of this type of activity in their communities. Through BRE visits, EDOs should understand their companies’ market entry strategies, and how they decide to invest, expand and merge at the corporate level. If a merger or acquisition does happen, be sure to engage with both parties and ask “What can we do for you and how can we help?”
- Millennials and Gen Z are more likely to pick where they want to live first and then find a job. Place making will become increasingly important in order to attract and retain talent. These generations want to have some sort of connection to the community in which they live, whether that is through events, volunteer opportunities, etc. There is a misconception that these types of initiatives are long-term and expensive; however, consider starting small with a pop-up event or a small community park. Bite off a small piece at a time.
- Costs are becoming extremely high in the Tier 1 metro areas of the U.S. For this reason, site selectors and companies are starting to look at the Tier 2 metro areas for projects that need access to large amounts of talent. We will likely see continued growth in these Tier 2 cities and the surrounding areas.
- The gig economy will continue to grow. These jobs form an important part of the local economy but are not always easy to count as traditional jobs. As more individuals work outside of the traditional employment paradigm, it will be difficult to track job growth and employment impact in any given region with today’s methods. Additionally, it will be more challenging to apply traditional incentives policies to induce job growth. Productivity and impact on the local economy will be more important metrics as the gig economy grows.
At Ady Advantage, we feel it is part of our role as economic development and marketing professionals to share our knowledge and help others stay abreast of changes and trends in the marketplace. If you would like help understanding the latest trends and what the implications are for your community, contact us today.