Dean Barber

Amazing Grace

In Corporate Site Selection and Economic Development on June 28, 2015 at 6:03 am

American politics are too often an ugly, mean-spirited affair, full of moral posing and finger pointing, which is probably why so many people are turned off by it.

But we were not turned off by the truly amazing grace that has been on full display in Charleston, S.C., in the wake of tragedy there.

In recent weeks, I have written favorably about the business climate of South Carolina in my role as a consultant for industry and economic development.

But in this blog entry, I am not writing so much as a consultant but rather as one who believes that we as a nation on the cusp of becoming a much better people. This is my hope.

For it is in the aftermath of something that is as terrible as the slaughter of innocents in a church with a predominately African-American congregation that we often take a closer look at ourselves and our motives and forge change.

By any measure, it’s been a rough year in this country, where violence erupted in Ferguson, Staten Island, and Baltimore amid racial tension.

Dylann Roof, 21-year-old white supremacist, hoped to exploit that tension with the twisted belief that he could precipitate a race war when he gunned down nine black parishioners in cold blood after sitting  with them for an hour during a prayer meeting.

Little did he know that his actions would reveal the essence of Christianity in ways that I think will forever transform the South and the rest of the nation.

At Roof’s bond hearing, the families of the victims gave moving statements about their loved ones, acknowledging anger and pain but praying for the accused killer’s soul and telling him he was forgiven.

May God Have Mercy on You

“I will never be able to hold her again, but I forgive you,” a daughter of Ethel Lance said. “And have mercy on your soul. You hurt me. You hurt a lot of people but God forgives you, and I forgive you.”

Felicia Sanders — mother of victim Tywanza Sanders and a survivor of the church shooting herself — said that “every fiber in my body hurts, and I will never be the same.”

“As we said in the Bible study, we enjoyed you,” she said of Roof. “But may God have mercy on you.”

Their amazing grace galvanized not just a city and a state but caught the attention of the world. President Obama tweeted: “In the midst of darkest tragedy, the decency and goodness of the American people shines through in these families.”

At the first service following the horrific slaughter of the nine innocent souls at Emanuel African Methodist Episcopal Church, the Rev. Norvel Goff told a packed, multiracial congregation, ‘Lots of folks expected us to do something strange and break out in a riot. Well, they just don’t know us.”

Said South Carolina Gov. Nikki Haley of the victims’ relatives: “Their expression of faith and forgiveness took our breath away.”

And it did. I asked myself if I could be such a great person if I were in their shoes.

I’m not sure that I could.

A War Still Being Fought

As a son of the South, I must confess that I have been sensitive to some of the uninformed bigotry and condescending comments I have heard from elites around this nation concerning the South.

“Practically the whole region has rejected nearly everything that’s good about this country and has become just one big nuclear waste site of choleric, and extremely racialized, resentment,” the Daily Beast’s Michael Tomasky wrote last year.

So how do you explain the tens of thousands of South Carolinians, white and black, marching in unity across the Ravenel Bridge? Were these all good Northerners who had descended upon Charleston?  Perhaps some were, and I can assure you that they would have been welcomed.

Historian Barbara Fields said, “The Civil War is still being fought and can still be lost.”

I believe her assessment is correct, but the massacre in Charleston, where the first shots of the Civil War were fired in 1861, may bring us closer to a true ending of that damn war. This is also my hope.

A Tough History

“On matters of race, South Carolina has a tough history,” said Gov. Haley, an Indian-American. “We all know that. Many of us have seen it in our own lives—in the lives of our parents and our grandparents. We don’t need reminders.”

“For many people in our state, the flag stands for traditions that are noble—traditions of history, of heritage and of ancestry.” But “for many others . . . the flag is a deeply offensive symbol of a brutally oppressive past.” The state can “survive” as home to both viewpoints: “We do not need to declare a winner and a loser here. We respect freedom of expression, and that for those who wish to show their respect for the flag on their private property, no one will stand in your way.”

“But the statehouse is different and the events of this past week call upon us to look at this in a different way. . . . Today, we are here in a moment of unity in our state, without ill will, to say it’s time to move the flag from the Capitol grounds.”

Within 48 hours of Gov. Haley showing true leadership, the governor of Alabama, Robert Bentley, ordered the flag removed from the statehouse grounds there, and Mississippi Sen. Roger Wicker said his state’s flag, which incorporates the Confederate design, should be altered. Govs. Nathan Deal of Georgia and Terry McAuliffe of Virginia said they’d do away with vanity license plates that include the banner.

A Perfect Union is Within Our Grasp

Here we have had both parties, with people of all colors, coming together in a come-to-Jesus fashion to atone for our country’s original sin. The Confederate flag will soon be relegated to the dustbin of history, which is where it belongs.

Now we should never forget our history, because it has unduly shaped us. But we, too, can shape history and put oppression and hate behind us, and to lean forward to ensure dignity and civil rights for all.

A perfect union is not so wild a dream. It is within our grasp, especially now with a movement of reconciliation in Charleston. Let us act.

Apostles of Disunion

There will be, of course, some remaining neo-Confederates. They will go to their graves believing and telling anyone who might listen that the old Confederacy was a supremely noble cause which was all about state’s rights and not about slavery.

These deluded persons are mistaken at best or liars at worst. For any rational study of our history will reveal that the Old Confederacy was founded on principles of the continuation and protection of the institution of slavery.

In his book Apostles of Disunion: Southern Secession Commissioners and the Causes of the Civil War, Charles Dew draws upon the very words of the secession commissioners in concluding that irrational fears of three imminent horrors – racial equality, race war, and miscegenation – spurred secession.

The commissioners preached a gospel of salvation by secession, contending the white race was in mortal danger with the election of Abraham Lincoln and the “black Republicans.

After the war, many of these same secession leaders became ardent proponents of the Lost Cause, conveniently seeming to forget their warnings of degradation before black assassins and fanatic abolitionists and insisting the South fought only for constitutional government and liberty.

My Confederate Roots

Today’s neo-Confederates continue to believe this Lost Cause mythology. Just as they are duped by a big lie, so too was my great grandfather, Thomas Elkins, who enlisted in the Confederate Army in Sweetwater, Tenn., in December 1862

Like the overwhelming majority of confederate soldiers, Thomas was no slave owner. In his mind, he was probably fighting to repel an invader from his homeland. In all actuality, he was fighting for a wealthy planter class to keep their slaves.

Thomas may have eventually figured that out when the Confederate Congress passed a law stating that anyone owning 20 slaves or more was exempt from serving in the Confederate Army.

Soon thereafter, the conflict was viewed as a “rich man’s war and a poor man’s fight” within the somewhat demoralized Confederate ranks.

After the war, my great grandfather would become a Presbyterian minister. My grandfather would later tell me stories that he could remember of Thomas telling him about fighting the Yankees and being captured during a raid at Big Hill, Kentucky, in 1863 and being sent to Camp Chase, Ohio, as a prisoner of war.

I have visited Thomas Elkins’ grave at a country church cemetery outside of Cleveland, Tenn. His headstone is prominently marked that he was a member of the 2nd Tenn. Cavalry, Co C., CSA.

And my grandfather, Homer Elkins, a kindly southern gentlemen, would briefly become a member of the Ku Klux Klan in the late 1920s but would drop out, appalled by the violence that he apparently witnessed.

He would, however, remain a member of the Sons of Confederate Veterans, and I still have a stack of his Confederate Veteran magazines from the 1960s. I never heard him once utter a racial slur.

Like his father, Homer was a devout Presbyterian. He had a Masonic funeral.

The Best Among Us

In his second inaugural address, President Lincoln noted that both the North and the South “read the same Bible and pray to the same God, and each invokes His aid against the other …”

Much is done in God’s name, some good, some bad. Men will make all sorts of excuses for what they do. Defenders of slavery would cherry-pick scripture in support of their “peculiar institution,” as if it was somehow God’s will.

Which only goes to show that we are all broken and flawed creations, precisely because we have been bestowed with this thing called free will. As such, we will frequently assign credit and blame for what we do as God’s will, thinking that will someway absolve us.

Only the grace of God absolves any of us. And those among us who have the strength of faith to forgive and give grace, well, they are the best among us. And we have seen them in Charleston.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Plano, Texas. He can be reached at dbarber@barberadvisors.com or at 972-767-9518. If you liked what you read here, invite him to speak at your next meeting.

The Cyber Boom in Washington

In Corporate Site Selection and Economic Development on June 16, 2015 at 8:49 pm

It’s scary world out there, which is precisely why I was on the phone making appointments with cybersecurity companies in the larger Washington, D.C., area last month.

The region around our nation’s capital truly is fast becoming the Silicon Valley of security and there are two primary reasons for this: 1) That’s where the money is and 2) That’s where the money is.

And when I say money, I am referring to contracts the federal government pays to cybersecurity companies to presumably make us all the more secure. (Although recent news reports on this topic are far from comforting.)

Geography plays a key role as it gives companies near the Beltway an advantage as they are within a few miles of the government customers paying them.

These government customers include the Central Intelligence Agency and the Pentagon in Northern Virginia; the Federal Bureau of Investigation and Department of Homeland Security in the District of Columbia; and Fort Meade and the Defense Information Systems Agency in Maryland.

So as with horseshoes, hand grenades and business, proximity matters, a truism with corporate site selection if there ever was one. (And you can quote me on that.)

Back in 2000, the federal government spent less than $1 billion on cybersecurity.  For 2015, that number will be about $15 billion and more is sure to be spent in future.

All this is why the Washington area posted more than 23,400 cybersecurity jobs last year – dramatically more than any other region, including in the Bay Area.

I think you can see why I was making appointments with cybersecurity firms in the Washington, D.C., region. Things are booming there and we would like to help companies and economic development organizations if we can be of help.

Created by a Boom Time

Last week, cybersecurity stocks surged to an all-time high. Goldman Sachs sees that trend continuing as the investment bank noted that last year “3,014 data breach incidents took place worldwide, exposing 1.1 billion records,” up 25 percent year over year.

In 2011, the global cybersecurity market hit $67 billion. It is projected to grow to as high as $156 billion by 2019, according to Markets and Markets, a Dallas-based research firm.

According to New York City-based CB Insights, in the past five years, $7.3 billion has been invested into 1,208 private cybersecurity startups.

I Was One of the 56 Million

I think may have mentioned in a blog late last year that my credit union sent me a new debit card, because I had shopped at Home Depot. The year before, my wife was sent a new credit card because she had shopped at Target.

Both retailers had been hacked, hence the new cards sent to us and a spate of bad publicity for the two companies.

Home Depot reported that hackers got into its systems by stealing a password from a vendor, opening a tiny hole that grew into the biggest retail-credit-card breach on record. About 56 million credit-card accounts were compromised, Home Depot said, with 53 million customer email addresses also being stolen.

The hack attack on Home Depot happened in April 2014, but company discovered it, or at least a reported it, in November 2014. Not exactly a confidence builder, athough they do have some great wood screws.

Meeting Industry Standards is Not Good Enough

Computer-security experts say that many retailers will not isolate sensitive parts of their networks from those that are more accessible to outsiders. It is usually after they have fallen prey to hackers that the companies address these “segmentation” issues.

Too often, however, they focus on meeting certain industry standards designed to detect known threats rather than anticipating the fluid, fast-moving tactics of hackers, which means they will be vulnerable again given time.

A recent Verizon cybersecurity report says most retailers bulk up IT security just in time for their payment card industry inspection, but then only 29 percent keep it up afterward.

“Officially they remain compliant, but only two or three weeks a year,” said Rodolphe Simonetti, a consultant with Verizon, in an interview with CNN Money.

According to the Verizon report, only 33 percent of companies regularly tested their computer networks for holes properly in 2014.

We All Pay

A new survey by the Ponemon Institute, a security research center, and IBM found that the average cost of a computer breach at large companies was $3.79 million globally. But for U.S.-based companies, the average cost was much higher at $6.5 million.

According to a report by USA TODAY, the survey included 350 companies in 11 countries that had experienced a data breach, mostly in 2014 — 62 of those companies were U.S.-based. The global cost has risen 23 percent since 2013, but only 11 percent in the U.S. That puts the average cost per lost or stolen record at $217 in the U.S. and $154 globally.

You can bet that we are all paying for that with increased prices for goods and services.

Target U.S. Government

Now you might think with all the hired cybersecurity guns at its disposal that the federal government would have its defense shields up and ready to thwart just about any cyberattack lodged against it.

But you would be wrong. In the past few months, hackers have breached security systems for the White House, the State Department, the Internal Revenue Service and the Office of Personnel Management.

An embarrassed Obama administration has given all government agencies a Dec. 31, 2016 deadline to encrypt their websites. So far, only 41 percent of federal domains are encrypted, according to government figures.

Now it is one thing for a retailer to get hacked, but quite another when it is the federal government. Because here is where national security is at stake, which is another reason why a cluster of cybersecurity firms are clustered in and around Washington.

A report from the U.S. Department of Homeland Security found federal agencies come under cyberattack hundreds of times a day and thousands of times a year.

You have probably heard by now that the IRS says that it was hacked with 100,000 Americans’ tax data compromised. Let me tell you, in the wrong hands, tax records can be much more dangerous and prone to extortion than credit card receipts.

But the Office of Personnel Management make take the cake in terms of sheer ineptness. Its security system is believed to have been compromised more than a year after it began and was discovered only when OPM was updating its security infrastructure.

Hackers didn’t just steal birthdays, email addresses and health information from the OPM, which is bad enough. They also got security clearance information on at least 4 million federal employees, including a database of federal employees who sought security clearances.

They Got What?

By gaining access to SF-86 security clearance forms, which are used to conduct background checks on Americans seeking access to classified government information, the hackers have information that could easily be leveraged in exchange for legislative favors.

The 127-page security clearance forms have details on the applicants’ family members, friends, former friends, potential enemies, angry neighbors, jilted ex-lovers.

In short, this is the stuff of blackmail. So it is not a stretch to believe that the hackers, armed with this very personal information, will attempt to recruit spies and ultimately seek access to weapons plans and industrial secrets.

The Fifth Domain

Virtually every major attack has been attributed to Chinese and Russian hackers acting on behalf of their governments.

And what they are trying to do is steal proprietary information ranging from blueprints to software applications to private employee information to chemical formulas from government and industry.

The Economist describes cyberspace as “the fifth domain of warfare”, which is why the Pentagon is so involved. This is the new war, which in turn has created a growing war-time cybersecurity industry.

And while the greater Washington, D.C., area has distinct advantages, communities across the nation, particularly those near military installations, are investing in cybersecurity measures and infrastructure as they recognize the possibilities posed by this burgeoning industry.

With as many as 300,000 cybersecurity jobs in the United States going unfilled last year alone, according to security company Symantec, academic programs are being crafted to win research grants and generate the next generation of highly skilled workers poised to make six-figure salaries and stay local.

That is precisely the intent with the creation of the Center for Cybersecurity at the University of West Florida in Pensacola.

Other regions around the country are making big plays for the emerging cybersecurity industry, including the Seattle-Tacoma in Washington state and San Antonio, to name a few.

The cyber boom is real and is growing because we have a bunch of cyber outlaws on the loose. How, if and when we bring them to heel should be a matter of time. But we need to fight fire with fire. I vote Texas Rangers.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Plano, Texas. He can be reached at dbarber@barberadvisors.com or at 972-767-9518. If you liked what you read here, invite him to speak at your next meeting.

South Carolina’s Winning Hand

In Corporate Site Selection and Economic Development on June 7, 2015 at 10:22 pm

In our desire to make the right decisions, sometimes we turn to others who have gone before us for answers.

We want to hear of their journey, of their experiences.

In business as in life, getting information from those who are in a position to know, those who have truly walked the walk, can be a hugely valuable undertaking.

For that very reason, if I am focusing on community on behalf of a corporate client for location analysis, I will want to talk to existing companies there.

I will want to learn what their experiences have been, good and bad.

Whether it is a review, testimonial or a reference, learning what others believe to be true is a powerful driver for business. It is why employers ask for references from potential employees and why my wife reads Yelp reviews before we venture into a restaurant.

And believe it or not, a good review may have been what tipped the Volvo project in favor of South Carolina over rival Georgia.

The Boss Pays a Visit

You see, Volvo’s head honcho for North America made it a point to visit with BMW, which has been operating an assembly plant in South Carolina’s Upstate region for years.

“You always want to avoid reinventing the wheel,” said Lex Kerssemakers, President and CEO of Volvo Cars North America, in an interview with The State, the newspaper based in Columbia, S.C.

“If they had a good experience that would make a big difference in our decision process. They have been there for years so they know exactly how it works in South Carolina.”

Indeed, BMW does know how things work in South Carolina as the German automaker is now in midst of its fifth expansion in Greer, spending $1 billion in the process.

By 2016, BMW, employing 8,000 workers, will be able to produce up to 450,000 vehicles a year, up from 300,000 that it produced last year.

Volvo’s footprint in the Palmetto State will be considerably smaller. The Swedish/Chinese automaker says it will build its $500 million plant in Berkeley County near Charleston, employing about 2,000 people.

We know that Volvo visited the Port at Charleston (where BMWs are shipped out primarily to Europe) several times to get a better understanding of how it worked. And I would not be surprised if South Carolina’s emphasis with apprenticeship programs (much more common in Europe) may have given it another edge.

One Win Begets Another

Now I can tell you from experience that had Mercedes-Benz not chosen Alabama in the late 1990s for an assembly plant near Tuscaloosa, it is highly doubtful that Honda would have built an assembly plant in Lincoln, Ala.

And were it not for Mercedes and Honda’s presence in Alabama, I don’t believe Hyundai would have built an assembly plant near Montgomery. One win begets another.

Whether they consciously do it or not, companies reference and even sometimes follow each other, whether they will admit it or not. It’s often why industry clusters start to take shape.

And even if no formal discussions take place, companies will take note of and even study the experiences of their competition.

So it is not surprising that Kerssemakers would have wanted to hear firsthand from BMW and learn what it had experienced in South Carolina.

And being that Volvo was considering a site near Charleston, BMW probably figured out that Volvo would not be competing for the same labor pool. So why not give them the low down?

And so they did, and in doing so, BMW became an ace in South Carolina’s hand.

Kerssemakers and company also had to be well aware that Daimler AG announced in March that it will build a $500 million facility in North Charleston to build Sprinter vans.

Again, one win begets another. Funny how that works.

South Carolina’s Incentive Package

Press reports are pegging the incentives package for Volvo at more than $200 million, with $123 million financed through economic development bonds. In other words, the state is going to borrow the money to pay for the incentive package.

While the deal is going to happen, the notion of borrowing doesn’t sit well with some state lawmakers, because with borrowing comes interest to the tune of millions.

They contend the state would do better to use $70 million of an anticipated surplus to settle its obligations instead of borrowing the money as proposed by Gov. Nikki Haley.

Gov. Haley says financing much of the incentive package through bonds is a better way, because Volvo does not want to become part of a political debate.

Well, Earth to Volvo, there is always going to be some debate or grumbling about incentives, even in pro-business South Carolina. But rest assured, this deal is solid. The politicos won’t muck it up.

And Good Things Will Happen as a Result

A study by College of Charleston economist Frank Hefner shows the Volvo plant will generate $11.3 million in annual state and local taxes as construction winds down in 2017.

At full production of 100,000 vehicles per year, no later than 2024, the plant will generate nearly $72.4 million in annual taxes. That would double if Volvo builds a second production line at the site, which will depend on market conditions.

Speaking in Tongues

A few weeks ago, I was in New York to meet with Michigan Gov. Rick Snyder and a group of economic developers from his state.

I was one of a number of consultants in attendance, and during one our sessions, we (the consultants) were asked what other states impressed us the most.

Georgia got the biggest nod of approval. That didn’t surprise me, but it certainly wasn’t the first state that came to my mind. (Actually, the most improved state is Michigan.)

I offered up South Carolina, and some of those New York/New Jersey-based consultants looked at me as if I were speaking in tongues. I looked right back at them thinking, “What?”

And couple weeks later, Volvo announced that it was going to South Carolina, leaving Georgia as the bride’s maid.

Now I knew, (I although I don’t have the numbers to prove it), that South Carolina has been winning just as often as it has been losing to Georgia of late when the two go head to head on sizable recruitment projects.

If fact, local economic developers in Georgia last year told me how South Carolina was playing hardball, adding fuel to the fire of the “Beast of the Southeast” moniker proclaimed by Bobby Hitt, South Carolina’s secretary of commerce.

When you’re one a roll, you’re on a roll, and much of that, I credit to governors who have the power to set the tone for economic development in their states.

Nikki Haley, like Rick Snyder, is a good ‘un, another ace in the hand.

With Malice Toward None

When working with or for a company, I try to do my best to clear the deck and start anew — wiping away any preconceived ideas and notions that I may have of a place.

Oh sure, there are places with better business climates than others. South Carolina and Georgia both generally have favorable business climates.

But preconceived notions can get in the way of determining better locations based on the specific needs and wants of a client company.

So when consultants are asked what states are best, as was the case a few weeks ago when meeting with Michigan economic developers, I am hard pressed to give an answer that sounds halfway intelligent.

“Please tell us, oh wise guru consultants, who is hot and who is not. Who pray tell could we – your humble and modest servants — learn from?” (Our Michigan friends did not phrase it like that.)

But my immediate thought was, “Heck, most states could probably learn from you. You got Rick Snyder. Michigan is on a tear right now.”

Another Reality

Still, many if not most economic developers are obsessed with this idea of how their home places are perceived by others. Or how they compare to their competition.

And I believe it is a contributing reason why some economic development groups will spend an ungodly amount of money on branding campaigns that don’t mean manure to a tree.

But perception as reality, and I get that because I once was an economic developer. And I wanted people to like my place, at least better than some other places.

But let me tell you of another reality. I had a conversation this past week with a senior executive with a manufacturing company who said that core business reasons – not incentives, not image, not branding, not hoopla – would dictate where his company builds a future plant.

It was clear from our conversation that he was focused on the tangible, that which can be recorded, measured and analyzed. The facts on the ground in a specific region of the country was what mattered most. All else was pretty much superfluous.

And that was music to my ears. I hope we’ll be able help him.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Plano, Texas. He can be reached at dbarber@barberadvisors.com or at 972-767-9518. If you liked what you read here, invite him to speak at your next meeting.

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