Dean Barber

Archive for August, 2015|Monthly archive page

A Rocky Road to Travel: Making Business Development Work

In Corporate Site Selection and Economic Development on August 30, 2015 at 5:22 am

Probably harder than herding cats or making a meeting worthwhile is this thing we call, for lack of a better phrase, “business development.”

Business development is an exercise in outreach and I am convinced that most organizations, and this particularly holds true of economic development groups, are not very good at it.

There is usually much trial and error involved, which naturally puts off many people. It is certainly not a skill that can be learned or accomplished overnight.

I first began learning business development many years ago as a business reporter for a daily newspaper. I wasn’t selling a service or product, but my job, day in and day out, was to get people to talk to me, usually on the telephone.

Of course, my goal was to get “the story,” whatever that story was. I think I got pretty good at it.

Getting people on the telephone and engaged in conversation remains my preferred method today even with all the changes in technology.

Mind you, I am a big user of social media and even email, which can often usher a subsequent conversation, but I typically learn more and understand the nuances of a situation by having a conversation.

Mining Sources

To be an effective newspaper reporter, I had to develop an extensive network of sources or contacts. In virtually all cases it meant establishing rapport and trust with people who might normally not want to talk to me.

Now they may not have liked everything that I reported, but they soon understood that I had a job to do, and that I protected my sources and would not burn them.

Some may have also sensed that having this understanding with me would be more beneficial to them over the long run.

Mining sources typically is an ongoing, never-ending process which by definition takes time. It’s an art that many people who have the moniker of business development hanging on their job titles will never really get the hang of.

Either they don’t know how to develop contacts or they just don’t put in the time to do it.  It often means picking up the phone and calling a complete stranger, which can be daunting.

Too often, business people engage in “busy work,” all the while avoiding outreach and hoping  that someone else will call them so that they can react to the next big project.

To quote Dr. Phil: So how’s that working for you?

It’s Called Follow-Up

Tommy Lankri gets it. My wife and I used him for investment real estate purposes here in the Dallas-Fort Worth market. He found us the property we were looking for, proved to be a skillful negotiator, and we closed on it a couple months ago.

But Tommy understands maintaining a relationship is good business. This past week, he came to our property to see how things were going. It’s called follow-up, and it is integral to maintaining a relationship.

No doubt, Tommy wants our business in the future, and because he has proved to be a faithful ally, he will get it.

No make mistake about it, business retention and expansion is business development. It is a systematic way for economic developers to follow-up and maintain relationships with companies that have invested in their communities.

Do it and chances are you will be rewarded. Don’t do it, and you will lose out. Nobody likes to be ignored. Be the faithful ally.

Are You Linked In?

Truly I am not a shill for LinkedIn, but anyone who is supposed to be doing business development who doesn’t have at least 500 contacts on LinkedIn is out to lunch in my book.

I find it almost jaw-dropping that there are economic developers out there, ostensibly charged with recruiting business and helping existing business, who are not on LinkedIn. Unbelievable.

Yes, there is a learning curve, but it’s not difficult. If you don’t want to take the time to learn, then go home and make pottery, because it is evident that you are not serious about business development.

The truth is I have made more contacts and subsequent appointments with senior industry executives around this country through LinkedIn than any other method. Sure, the actual appointment setting will happen typically via a telephone conversation, but LinkedIn got me in the door.

If I see a business person on LinkedIn with less than 100 contacts, chances are I won’t even try to connect with them, as they have shown that they don’t get it.

And if they have less than 500, I still wonder. My advice: Spend the extra bucks and get the premium version as it allows you do so much more. And then work it.

Let me help you with your business development.

Add Illinois, Wisconsin and Maine to the Club

Last week, I told you how economic development in North Carolina was suffering because of a budget rift within the state legislature there.

Well, the Tar Heel State is far from alone. Lead statewide economic development organizations in Illinois, Wisconsin, and Maine, have also been taking it on the chin, particularly with regard to the rewarding of financial incentives.

In Illinois, tax incentives are on hold as first-term Republican Gov. Bruce Rauner and majority Democratic lawmakers squabble over the absence of a state spending plan in the fiscal year that began July 1.

“Local and state tax incentives are important business development tools, but cannot be truly effective while the state continues to bleed jobs due to high costs of doing business,” said  Jim Schultz, director of the Department of Commerce and Economic Opportunity.

Issuing the tax incentives without addressing what’s driving the costs “would be a disservice to Illinois businesses and communities,” Schultz said.

In neighboring Wisconsin, Reed Hall, the chief executive officer of the Wisconsin Economic Development Corporation, said he would resign on Sept 25.

Gov. Scott Walker created the public-private hybrid agency, replacing the state’s Commerce Department, shortly after taking office in 2011.

Since then the agency has been stung by a series of scathing audits, media reports about questionable loans and accusations of mismanagement.

Making the Maserati Payment

WEDC released documents in June showing that from July 2011 to June 2013, 27 awards worth about $24 million went out without any staff review, which is kind of hard to imagine.

One award was a $500,000 unsecured loan for a company owned by a Walker donor, who used agency funds to pay for a lease on a Maserati sports car. The company defaulted on the loan from the state.

Oshkosk Wins Big

Despite WEDC’s woes, Wisconsin got a big win last week when the U.S. Department of Defense awarded a $6.7 billion contract to Oshkosh Defense to assemble 17,000 Joint Light Tactical Vehicles, a replacement for the Humvee.

The contract is a timely boost for Oshkosh, which eliminated 760 jobs last year because of declining defense spending. The company plans to build the vehicle in Oshkosh, with deliveries beginning in 10 months.

He Said What?

In Maine, George Gervais, commissioner of the state’s Department of Economic and Community Development, told a legislative oversight committee that it was beyond his department’s resources to collect and report performance information necessary to gauge whether the tax incentives are working.

Now I wasn’t there, but I bet you that did not impress his audience.

Tracking performance based on incentives rewarded is not exactly a radical idea. It not only shows a degree of good stewardship, but can indicate whether certain incentive programs are essentially working as intended.

I think with a little imagination that it can be done in an unobtrusive, business-friendly sort of way. But generally speaking, government agencies are not known for their imagination.

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. OUR NEW ADDRESS is 2736 Golfing Green Drive, Dallas, Texas 75234. Dean 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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On Murderers’ Row: Economic Development at Risk in North Carolina

In Corporate Site Selection and Economic Development on August 23, 2015 at 1:59 am

North Carolina has a lot going for it. It has mountains in the west and seashore in the east, making it the sixth-most visited state in the country.

It has two of the fastest growing metro areas in the country, that of Charlotte and Raleigh/Durham, which combined have accounted for nearly 60 percent of North Carolina’s job growth since the recession.

From old, North Carolina has tobacco, textiles and furniture, still hanging in there, with even new capital investment projects happening.

From new, it has experienced a flood of tech jobs, much of which has been prompted by Research Triangle and the concentration of topnotch universities and companies nearby.

Raleigh, currently home to more than 400 startups, has seen a 23 percent increase in IT jobs in the first half of this year.

Now I have been to North Carolina many times, both on business and pleasure, and I always left impressed with the growth and potential for more growth that I have witnessed there.

Of course, I like economic growth, which is partly why I live in Texas. (See last week’s blog, Armadillo’s Revenge.)

An All-Star Team in Turrmoil

But back to North Carolina, which has been given practically all-star status in economic development circles, proportional to that of the University of North Carolina’s basketball program.

To believe that all is well with economic development in the Tar Heel State, however, would be wrong. The truth is, things are a bit in turmoil there right now.

I started hearing murmurs of discontent, among both economic developers and site selection consultants, more than a year ago in the midst of a transition from a traditional state-run commerce department to a public-private partnership for industry recruitment.

Now this is somewhat understandable, as there is a part of human nature that does not like change. I get that. But when other site selection consultants were telling me of telephone calls not being returned, well, that’s not a good sign.

To be fair, I no longer believe this non-responsive scenario to hold true. The newly-created Economic Development Partnership of North Carolina may have got off to a shaky start, but it is now headed by a consummate professional, Chris Chung, of late of the Missouri Partnership, who above all believes in customer service.

Economic Developers Speaking Out

But you know things are not all hunky dory when Chris, along with other top economic developers in the state, are coming out with public statements that they are concerned about the competitive position that North Carolina finds itself.

They know too well that they are living with a manufactured crisis, made possible by a state legislature dogged by Tea Party activists. More on that later.

Said one fellow site selection consultant in an email exchange last week with me on North Carolina: “Difficult environment to do deals.” He added, “I know Chris is doing the best he can.”

Last week, the North Carolina House rejected a Senate version of an economic development bill, which would have increased annual financing for the Job Development Investment Grant (JDIG) program, truly the mainstay for the state’s incentive package.

JDIG’s Empty Till

The bill will now go to conference, where state lawmakers should, if they have a modicum of common sense, agree to a compromise bill, thereby funding the program.

JDIG is a discretionary incentive that provides sustained annual grants to new and expanding businesses measured against a percentage of withholding taxes paid by new employees.

The immediate problem is that JDIG is currently tapped out, as in there is no more money in the till. And that naturally has economic developers in the state very antsy, as they should be.

The N.C. Economic Developers Association back in May called on legislators to raise the cap on JDIG and extend it for five years beyond its sunset deadline of 2016.

“Without these types of programs, North Carolina and the economic developers across the state will operate at a disadvantage,” says Ernie Pearson, NCEDA president.

Ronnie Bryant, president and CEO of the 16-county Charlotte Regional Partnership, has not been pleased with the turn of events and has made his views known.

He said the Senate version, which caps JDIG at $20 million annually and adds $5 million to the current fiscal year, represents a watered-down compromise “that could potentially hamper business development.”

“I am among many regional and statewide economic-development officials, including John Skvarla, secretary of the North Carolina Department of Commerce, who have stated that JDIG shouldn’t be restricted by caps or a sunset date,” Bryant wrote in his weekly blog.

“This sends mixed messages to companies that are considering moving or expanding here.”

Defending Incentives

For his part, Skvalra, who has called JDIG “North Carolina’s flagship business recruitment tool,” has had to defend the idea that job-creation incentives do not constitute corporate welfare, which is never a good sign.

“Any number of considerations can lead a company to us – or away from us. Good sites, reliable infrastructure and talented workers get us to the finish line. Meaningful financial programs like JDIG and One N.C. put us across the finish line. Clearly, all these factors are important,” Skvalra wrote in a recent guest editorial for The Fayetteville Observer.

“But the absence of clarity regarding JDIG’s future erodes confidence in North Carolina as a destination for new jobs and investment. As the global economy moves ahead, most companies cannot afford to wait. Some have already taken their expansion plans to competing states.”

One of those competing states, neighboring South Carolina, is clearly on a roll. That state won two automotive assembly plants this year alone, when Mercedes-Benz announced in March and Volvo announced in May future factories to be built near Charleston.

Still No Auto Assembly Plant

Volvo had looked at three sites in North Carolina but passed, apparently viewing the overall incentive package being offered as not being particularly worthy. (Georgia was the second choice behind South Carolina.)

Unlike many states in the Southeast, most notably South Carolina, Tennessee, Kentucky, Georgia, Alabama and Mississippi, North Carolina has yet to win its first automotive assembly plant. It remains a stated goal for Chung.

(Jaguar Land Rover, which was reportedly considering North Carolina as a possible location for a new auto plant, has decided not to build in North America.)

Now I have tried in my past writings to avoid the political realm, as that is one sure-fire way to turn people off. I hope my readers can neither identify me as an R or a D, as I do not see myself as either.

Still, politics and economic development are so intertwined, so dependent on one another, that I must tiptoe into this arena, ever so reluctantly.

A Governor’s Feud

The bottom line is that politics are why economic development in North Carolina is having a difficult time of it right now, although I do expect the ship to be righted eventually.

It should be noted that legislators have yet to deliver a budget for the fiscal year that started July 1, the longest stalemate in 13 years.  The state is now operating under a temporary measure that allows it to spend money without a budget.

Knowledgeable observers tell me that the root of the problem is the rise of the Tea Party, particularly in the Senate.

On issue after issue, Gov. Pat McCrory, has been in a fight with the Senate almost since he took office in 2013. In rejecting Medicaid expansion under Obamacare and protecting opponents of gay marriage, the Legislature has forged ahead without him, sometimes overriding his vetoes.

That tattered relationship did not improve when Gov. McCrory criticized the Senate over a plan that would allocate more sales taxes collected in urban centers to rural areas.

This battle between anti-government Tea Party supporters and business-oriented Republicans, pitting urban against rural, is certainly not exclusive to North Carolina. Similar rifts have occurred in other states to be sure.

To Unilaterally Disarm is Not an Option

But in North Carolina, this political fight has resulted in economic development being held hostage. And, mind you, this is happening in a state in the Southeast, where economic development, is played hard and fast, much like its college football.

In an interview last month with the Charlotte Business Journal, Chris Chung acknowledged that North Carolina is at a “competitive disadvantage” with other Southeastern states.

“If we want to unilaterally disarm while the rest of our competitors continue to offer these tools, I really worry about our risk that we fall behind,” he said.

“We’re on murderers’ row when it comes to competition.”

I couldn’t have said it any better. 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. OUR NEW ADDRESS is 2736 Golfing Green Drive, Dallas, Texas 75234. Dean 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.

Armadillo’s Revenge: Texas Grows Despite Oil Slump

In Corporate Site Selection and Economic Development on August 15, 2015 at 5:08 pm

The law of supply and demand is one of the most basic principles in economics. The premise is that when an item is scarce, but many people want it, the price of that item will rise.

Conversely, if there is a larger supply of an item than consumer demand warrants, the price will fall, which is why crude oil slipped to $41.35 a barrel last week, the lowest intraday price since March 2009.

But here is a truism that you should know. Armadillos, the official small mammal in Texas, do not recognize nor abide by the law of supply and demand. They care not a whit about it. They simply go about their business.

Last month, some brainiac in Marietta, Texas, shot at an armadillo, with the bullet righteously ricocheting off the animal’s armor and back into the shooter’s face.

Said the Tyler (Texas) Morning Telegraph in an Aug. 7 editorial: “Don’t mess with Texas armadillos.”

Not Blistering But Not Bad

Just as you should not mess with our critters, you certainly should not predict the demise of the Texas economy, even with the struggling oil and gas industry. Some have suggested as much, and they would be wrong.

The Federal Reserve Bank of Dallas forecasts 2015 job growth for Texas at 156,000 jobs. Not the blistering pace of 2014 when the state added 457,900 jobs, but not bad.

Texas has been able to mitigate the economic damage done by crude’s price decline by cutting taxes and relying on its diversified economy, according to Gov. Greg Abbott.

“While other states have been raising taxes, we cut taxes by $4 billion … and it is attracting businesses from New York, from New Jersey and across the entire country,” Abbott told CNBC last month.

“Texas leads the nation in technology exports, we have the largest medical center, not just in the United States, but in the entire world,” Abbott added, also saying that General Motors is currently investing $1.4 billion to open a new manufacturing facility in Arlington.

A Hit in Jobs and Revenue

Still, in a world awash in oil, even Texans, albeit not their armadillos, cannot escape the law of supply and demand. Upstream oil and gas companies have laid off more than 20,000 workers in the state and more job cuts are likely on the way.

And the state’s revenue will take a hit from lower oil prices, according to an April report from the Dallas Federal Reserve Bank.

“Texas, owing to size and diversification, obtains 9 percent of tax revenue from oil and gas. Oil and gas severance tax revenue in Texas totaled $4.5 billion in 2013. With the halving of oil prices, and potentially lower production, those receipts likely will significantly fall in 2015,” the report said.

Nevertheless, Texas’ exposure to the oil glut is much smaller than that of other states, as crude accounts for 80 percent of Alaska’s tax revenue and nearly 50 percent of North Dakota’s, according to the Fed report.

A Healthier Diversified Economy

If the oil bust of the 1980s taught Texas anything, it was that a diversified economy is a healthier economy. In the decade and a half after 1986, Texas’ economy grew by 118 percent, while the mining industry (which includes oil and gas) grew only 18 percent.

“The Texas strategy of avoiding burdensome taxation and regulation has attracted a variety of businesses across many industries that have diversified the state economy,” according to a recent Wall Street Journal editorial, concluding, “the resilience in Texas is proving again that limiting government is an economic growth strategy for all seasons.”

One thing is for certain, the Texas housing market is on fire, with home prices skyrocketing to an all-time high in the second quarter of 2015. I can relate because I just bought a house in Dallas, where it is a sellers’ market to my chagrin.

“The impact of lower oil prices continues to be delayed, leading to a surprisingly strong second quarter. In fact, Texas home sales are actually stronger than they were this time last year, when oil prices were nearly $100 a barrel,” said Scott Kesner, chairman of the Texas Association of Realtors. “This is further evidence of the strong and enduring demand for Texas real estate.”

Texas home sales increased 46.3 percent from first quarter 2015 and 4.7 percent year-over-year to 88,906 home sales.

The median price for Texas homes also increased, growing 8.1 percent from second quarter 2014 to $200,000, while the average price increased 9 percent year-over-year to $258,786.

OPEC’s Strategy

OPEC, the 12-nation cartel led by Saudi Arabia, has refused to cut output in the light of lower prices and demand. In doing so, the cartel hopes to squeeze its U.S. rivals with higher production costs out of the market.

And that strategy might be working to some degree.  Earnings are down for U.S. producers, forcing them to decommission more than half their rigs and sharply cut investments in exploration and production.

Houston-based oil industry recruiter Swift Worldwide Resources estimates worldwide oil field layoffs have reached 176,100 so far.

Chevron recently announced that it will cut about 1,500 positions over the course of 2015, with bulk of the job cuts will happening in Houston.

OPEC is betting on the American energy revolution, which helped create the worldwide supply glut, resulting in an industry shakeout in which many of the new smaller oil companies that are heavily dependent on leverage not surviving.

Add China, a Strong Dollar and Iran

Add to the mix China, which has been the main driver of global growth. A slowdown in that country has meant that its appetite for raw materials of all sorts, including crude oil, has been and will be curtailed.

At the same time, a strong dollar makes oil more expensive for buyers in overseas markets. The U.S. dollar has soared 7 percent so far this year against a basket of currencies. China added to the pressure on oil by devaluing its currency last week.

And then there is Iran. The country’s nuclear deal with the West could pave the way for lots of new Iranian oil to flood the market at just the wrong time.

Add all this together and you get an environment in which oil companies are postponing investments, furloughing workers and cutting other costs.

Oil consulting firm Wood Mackenzie estimates global oil and natural-gas producers have delayed $200 billion of investment in more than 45 projects following the slump in crude prices that started in late 2014, as reported by Bloomberg.

Texas Will Keep On

Still, to the surprise of many, U.S. oil output remains stubbornly high, with projections that Texas will produce more oil and gas than ever before.

Karr Ingham, an economist for the Texas Alliance of Energy Producers, told a gathering of reporters in Houston last month that crude oil production in Texas will reach an all-time high in 2015.

Ingham, author of the Texas Petro Index (TPI), projected that total oil production in 2015 will be 1.284 billion barrels, surpassing the record high of 1.263 billion barrels set in 1972.

Explaining the apparent disconnect between oil production and wellhead prices in Texas would seem to fly in the face of the law of supply and demand.

According to press reports, Ingham said crude oil prices will have to drop to a price so low that production will be curtailed and demand will rise to remove the worldwide glut.

No one knows what that price point is and how long it will take for that to happen.

One thing is for certain, the armadillos, well, they don’t give a hoot.

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. OUR NEW ADDRESS is 2736 Golfing Green Drive, Dallas, Texas 75234. Dean 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.

Moving is a Pain, for People and Companies

In Corporate Site Selection and Economic Development on August 8, 2015 at 2:04 pm

After a week of moving heavy boxes from a former residence to a new one, I am all stove up.

For those don’t know that southernism, it means that I am sore from my earlobes to my toes, as if I were beaten with two by fours. And thus I am more convinced than ever that physical labor does not agree with me and should be avoided whenever possible.

But I could not avoid it last week. While professional movers were hired to pick up and transport our furniture 15 miles from point A to point B, I spent the good part of last week packing and moving boxes in daily trips with my pickup truck.

And it hurt, it really did.

My wife said that I should leave all the packing and box moving for the movers. But I could not do that.

‘Cause when a Texan fancies, he’ll take his chances, chances will be taken, that’s for sure. (I’m quoting from the song “London Homesick Blues” by Gary P. Nunn.)

Bigger in Texas

Thankfully, we’ll be staying in the Metroplex, the terminology used here for the Dallas-Fort Worth metro area, which is gargantuan in size, 9,286 square miles of total area.

Yes, you read that right. It’s bigger than Rhode Island and Connecticut combined.

The 2014 official estimate U.S. Census has the Dallas-Fort Worth Metroplex at 6,954,330, making it the largest metropolitan area in the South and the fourth largest in the country.

The Metroplex added more than 131,000 people from July 1, 2013, to July 1, 2014, and the area’s population has grown by more than one million since the 2000 US census.

If the good news is that we are staying in the Metroplex, the bad is that moving, no matter how you cut it, is a royal pain in the petute. (I don’t think you need a definition here.)

Which got me to thinking about companies and how moving for them is also a difficult and even painful decision, which is the primary reason why my consultancy exists.

When you get down to it, some of the very same factors that are involved in a residential move so too are important for corporate site selection.

Proximity Matters

When we started looking for a new home, my wife wanted to be a closer to her place of work. Our new place is about one mile from a north/south interstate and less than a mile from an east/west interstate highway.

It is now about 10 or 15 minutes from her office, whereas before she had an hour commute via mostly toll roads.

Now she will have no toll roads for her daily commute and there will be lower fuel costs because of the shorter distance traveled.

Transportation costs, particularly for manufacturers moving products, can be a huge cost and is often not given proper consideration in factoring optimal locations in the site selection process.

Thankfully, I have a logistics expert on our team who can do the cost analysis on transportation, which we typically employ on finalist locations.

Taxes Matter

It just so happens that our property taxes will be lower in our new location in comparison to our former location. There are a lot of towns and cities in the DFW Metroplex. I have seen the number 71, which is astounding, but I believe it to be true.

Texas has no state property tax. (Nor state income tax.) The Legislature has authorized local governments to collect the tax. The state does not set tax rates, collect taxes or settle disputes between you and your local governments.

Again, at our new home, 15 miles away from our former home, we will be paying lower property taxes, which was a certainly a factor or an added plus during our residential site search.

Property taxes, and an assortment of other taxes, are typically of importance for companies considering a new location for operations, because they effect the bottom line and the cost of doing business.

An excessive tax bite has often prompted companies to move operations from one state to another. General Electric, along with Aetna Inc. and Travelers Cos., have of late decried the higher taxes in Connecticut.

Trust me, this is how you lose companies.

Energy Matters

I cannot say that utilities and energy costs were a big consideration for us during our home search in the Metroplex, but I can tell you that my wife, being the good steward that she is, insisted that we choose an electric utility that gets a big part of its energy load from renewable sources. And she chose accordingly, as she had that option here.

Energy costs, particularly for manufactures, can be a tremendous cost, so due diligence is required in a location analysis to determine how much they will be paying via the electrical load that they will require.

Many utilities offer complicated rate schedules that will have your eyes glaze over, when you just simply want a comparison number to go by.

Leave it to say, the costs per kilowatt hour (kWh) in this country can vary by a lot, from less than five cents per kilowatt hour to more than 50 cents, in the case of Block Island in Rhode Island, where the nation’s first offshore windfarm is now under construction.

Neighbors Matter

When we were looking for our new home, the condition and the feel of the neighborhood was important to us as was the demographics of the place.

We are not elitists, but neither do we want to live in a neighborhood plagued by crime and poverty, even if the real estate deal may be exceptional.

We knowingly paid more for our place because of the place and the fact that it is truly a seller’s market in the Dallas-Fort Worth area with the influx of people coming here and the limited inventory of residential properties for sale.

But the point is that we wanted to live in a neighborhood where we would feel comfortable and truly make it a home.

Companies are the same way. Most will want to be there for the long haul and want to gauge a community by its corporate presence and the neighbors that it will keep.

Property Matters

Some companies will knowingly pay more to go into an upscale business or industrial park, because they want that setting, particularly if customers come calling.

The last thing a company typically wants is building a nice corporate campus across the street from a junk yard or neighbors that are not conducive to the image that the company wants to portray.

And while companies look for characteristics of a labor draw for its future workforce in terms of quality and quantity, we, too, were looking at the human component in the neighborhoods where we were conducting our personal home site search.

A Specialist Matters

Finally, we employed our own site selection consultant to help us find what we were looking for. Tommy Lankri is one cool dude. A former Israeli Army sniper, this guy is driven. He helped us not only find the property we were looking for, but he proved to be the tough negotiator that we wanted.

I’m telling you, first-generation immigrants to the country always work harder. Tommy has already done astounding things and he will sure to make it big.

But the point is that my wife and I hired a consultant, a Realtor, to help us with our home site selection process. We had sense enough to know that we had gaps in our knowledge and needed that specialist for help. (And those professional movers were of big help, too.)

Which is the very same reason why companies should hire site selection consultants to do their location analysis. Companies know what they do, that’s what they are an expert in.

But they don’t know what they don’t know. They don’t know the many factors and intricacies of site selection, which is precisely why they should, and here is my shameless plug, hire Barber Business Advisors for that.

We can help and save a company time and money in the process, alleviating some of the pain that goes with a move.

In Memoriam

Ted Levine, founder of Development Counsellors International (DCI) passed away last week.  He was 89.

Ted founded DCI in 1960, when it was the only firm specializing in economic development public relations and marketing in the U.S., probably the world.

I did not know Ted well, but I liked him immediately when he offered me some valuable critiques to some of my early blogs. I could tell that he had great wisdom.

His son Andy took over DCI as president a few years ago. I see him as a chip off the old block, a standup guy just like his dad.

Lord, I wish we had more people like that in business today.

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. OUR NEW ADDRESS is 2736 Golfing Green Drive, Dallas, Texas 75234. Dean 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.

Red Army, Red Dots and the Wind Cries Rhode Island

In Corporate Site Selection and Economic Development on August 1, 2015 at 10:32 pm

As my regular readers (my mother and some guy in India) know, I write primarily for a business audience, tackling topical issues that I think would be of interest to corporate executives, economic developers and just regular folks.

In doing so, I do my best to write in plain English and avoid jargon and gobbledygook, which too many business people use in an attempt to impress others as to how smart they are.

More often than not, they are just muddying the waters, although some people fall for their shtick.

“We’re going forward with our plans to implement optional third-generation matrix approaches.”

“We need a more blue-sky approach to dot-com organisational contingencies.”

“We’re going forward with our plans to implement parallel relative mobility.”

I have been in meetings where such management speak was being inflicted on entrapped souls. If I find myself in such a setting, where someone, typically a consultant, is obviously obfuscating, I might lean over to a trusted colleague and say, “What is this person talking about?”

The Plain English Campaign is a website worth visiting. It’s British but still appropriate for a U.S. audience, as we have our share of people who speak much and say nothing.

It’s time now to revamp and reboot our total organisational time-phases. So let’s look at some business news stories of the past week that should boost our parallel relative matrix approaches.

Red Army, Red Dots

NBC News obtained a National Security Agency map that show that the Chinese government has engaged in a cyber-assault on all sectors of the U.S economy, including major firms like Google and Lockheed Martin, as well as the U.S. government and military.

More than 600 corporate, private or entities were attacked over a five-year period, with clusters in America’s industrial centers. The map shows the entire Northeast Corridor, from Boston to Washington, D.C., blanketed in red dots.

Each dot represented a successful Chinese attempt to steal corporate and military secrets and data about America’s critical infrastructure, particularly the electrical power and telecommunications and internet backbone.

What was electronically pilfered included everything from specifications for hybrid cars to formulas for pharmaceutical products to details about U.S. military and civilian air traffic control systems, according to the NBC report.

Other targeted areas included California’s Silicon Valley, Los Angles, Dallas, Miami, Chicago, Seattle, and Detroit. The highest number of attacks was in California, which had almost 50.

A Growing Industry

As I reported in my June 16 blog, an entire cybersecurity industry has been born in response to cyber attacks, with much of the growth centered in and around the nation’s capital.

And for once, Washington lawmakers appear to be acting. The Senate plans to vote on two cyber security bills before the August recess — the Cybersecurity Information Sharing Act (CISA), to increase sharing of public and private data on hackers, and the Federal Cybersecurity Enhancement Act, to require agencies to adopt cybersecurity best practices and speed the implementation of the government’s anti-hacking shield “Einstein.”

Both bills have strong bipartisan backing and potential White House support.

A Cyber Pearl Harbor?

So why is this important to you?

The experts are saying that more attacks like one on the U.S. Office of Personnel Management are coming with something akin to a “cyber Pearl Harbor” a distinct possibility.

A cyberattack which shuts down parts of the United States’ power grid could cost as much as $1 trillion to the U.S. economy, according to a recent report from the University of Cambridge Centre for Risk Studies and Lloyd’s of London.

The report insurance market outlines a scenario of an electricity blackout that leaves 93 million people in New York and Washington, D.C., without power.

The U.S. government said that two cyberattacks on the OPM compromised more than 21 million Social Security numbers, 1.1 million fingerprint records, and 19.7 million forms with data that could include a person’s mental-health history.

In May 2014 a Federal grand jury indicted five officers of the Chinese People’s Liberation Army Unit 61398 on charges of theft of confidential business information from U.S. companies and planting malware on their computers.

A First for Rhode Island

Last week, I wrote about how wind energy will power a next generation of large data centers to be built by Facebook and Google.

And now construction has begun off Rhode Island’s coast on the nation’s first offshore wind farm. Deepwater Wind is building a five-turbine wind farm off Block Island. It hopes to power 17,000 homes as early as next year.

While European and Asian countries have built vast offshore wind farms to convert steady ocean breezes into electricity, no comparable U.S. projects have begun construction until now.

“Block Island Wind Farm will not only tap into the enormous power of the Atlantic’s coastal winds to provide reliable, affordable and clean energy to Rhode Islanders, but will also serve as a beacon for American’s sustainable energy future,” said Interior Secretary Sally Jewell, who traveled to the resort Island for the event.

The project, located in state waters just under three miles from the island’s southeast coast, is being viewed as a hopeful, if modest, new beginning for an industry that has stumbled in recent years, beset by legal battles and financial difficulties.

Block Island Wants Relief

Proposed wind farms in coastal Massachusetts, New Jersey and Delaware have stalled because of problems with financing, regulatory approvals or opposition from local landowners.
Block Island, however, wants to replace its expensive source of energy.

“We are one of the highest rates in the country,” David Milner, general manager for the Block Island Power Company, told National Public Radio. “We got up over 50 cents per kilowatt-hour, which is a huge burden on the businesses out here and the individuals.”

In New England, the average rate is 16 cents per kilowatt-hour for all sectors.

I Want My PTC

A vote by the Republican-dominated U.S. Senate Finance Committee in mid-July overwhelmingly re-upped the wind Production Tax Credit (PTC) and policies that support wind farms.

Each time the PTC comes up for a vote to be expanded or renewed, the future of American wind energy has always come into doubt. And that has happened numerous times since it was originally enacted in 1992.

The PTC expiration date in January had brought to an end a $23 tax credit for every megawatt-hour of electricity a wind turbine generates.

A megawatt-hour is enough to power about 1,000 homes for one hour, according to Bloomberg. The credit, which was worth about $2 billion for all US wind projects in 2013, has brought down the price of electricity in areas of the country where wind power flourishes, since wind farms can charge less and still turn a profit.

According to Bloomberg, “In Texas, the biggest wind-producing state in the US, wind farms have occasionally sold electricity for less than zero – that is, they’ve paid to provide power to the grid to undercut the state’s nuclear or coal energy providers.”

According to American Wind Energy Association, when the tax credits expired briefly in 2013, installations of new wind farms in the U.S. fell 92 percent, causing a loss of 30,000 jobs across the industry that year.

After Congress renewed the PTC, the industry added 23,000 jobs the following year, bringing the total to 73,000 at the end of 2014.

And Stable Means?

A Department of Energy report released earlier this year projected that with a stable policy, wind has the potential to supply 10 percent of the nation’s electricity demand by 2020, 20 percent by 2030, and 35 percent by 2050.

Of course, it is apparent that a “stable policy” means federal tax credits. Without them, the industry has proven that it will come to a virtual halt.

Which begs the question, if wind energy is indeed the way of the future, which it very well might be, then why does it need subsidies? And for how long?

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. OUR NEW ADDRESS is 2736 Golfing Green Drive, Dallas, Texas 75234. Dean 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.