Site Selection in Focus: Perceptions of Utah’s Business Environment

In collaboration with the Governor’s Office of Economic Development, the Economic Development Corporation of Utah (EDCUtah) works with companies looking at Utah as a place to locate operations. In this role, EDCUtah frequently interacts with site selectors—consultants hired by companies to identify prime locations. Site selectors often take the lead for their clients in negotiating with different states competing for a project.

Understanding the role site selectors play is a key factor in growing Utah’s economy. In fact, site selectors figure prominently in nearly one-third of expansion projects on which EDCUtah has worked over the past decade. We study the site selector community diligently.

During the 2020 Sundance Film Festival - what now seems years ago - EDCUtah invited four national site selectors to come to Utah to learn more about our business climate, labor force, quality of life, and everything that makes Utah great. At the end of the trip, EDCUtah asked the site selectors about a wide range of topics. The following four topics are just some of the insights we gained from our guests. 

First, what new things did they learn about Utah? Our group of site selectors generally understood Utah to be a good place to do business, but a few learnings stood out to them: 

  • Language capabilities and work ethic of our workforce
  • Strength of the financial services industry
  • Growth and focus on the life sciences industry

The biggest surprise for some of them was Utah’s “compassionate conservatism,” particularly a welcoming attitude toward immigrants and a commonsense approach to business and governance. “It's conservative in a ‘We're going to be fiscally sound and we're going to plan for the future’ way, which resonates with a lot of people,” said one consultant.

Second, we asked them about general economic development trends they are observing across the country. Our guests unanimously agreed on the major issue facing every location across the country: workforce. Availability of skilled labor is now of higher value than having lower costs compared to other markets.

As one participant remarked, “It’s just not enough anymore to show workforce data and to be the low-cost leader, from a market perspective. It's really moving more towards making a decision on culture…It's so much more people-focused.”

Third, we asked them about the need for incentives to attract high-growth companies. One of our experts stated bluntly that incentives are not going away. They will remain a competitive element in most corporate expansion decisions. 

The most attractive incentives they see involve upfront cash, an approach that Utah emphatically does not take. “Everybody wants it…[Upfront cash] has the most impact because typically it comes in the first few years of operations when a facility needs it the most because they're ramping up,” noted one.

With that said, one guest synthesized the general opinion that Utah’s post-performance, tax rebate-based incentive approach was “not the best, not the worst” that they’ve seen around the country. Being in the middle is likely a good place for Utah.

Another consultant cautioned against ratcheting down incentives in general: “First of all, the economy is not always going to be what it is now. And I also think, once you start tightening down incentives, and you're only incenting that top echelon of jobs and projects and workforce, you're ignoring opportunities that really benefit all the people in the state.”

[Please note the focus group took place in early February, before the current virus-related headwinds hit the global economy.]

The group emphasized that workforce training incentives and programs are gaining importance, as they can ensure a company has the skilled employees needed right from the start. A commitment to investing in K-12 education to build the workforce pipeline is also seen positively.

Fourth, we asked how to better support job growth in rural communities. One site selector commented: “Rural communities need to take a regional approach, and pool resources and funding to go after projects…What's good for the region is good for everyone in that region.”

The takeaways to attracting new companies? Maintain our welcoming culture and fiscal responsibility. Invest in talent and education. Avoid radical changes in the state’s incentive strategy. Help rural communities collaborate.

To see a more detailed report on the Site Selector Focus Group, visit the Original Research section of www.edcutah.org/research.

Publication 
Fri, 04/03/2020 - 10:59