Ellen Perlman was a GOVERNING staff writer and technology columnist.E-mail: firstname.lastname@example.org
Not very long ago, when a business wanted to relocate, site selectors would contact local economic development officials, fly to a city, and meet with real estate brokers to get a sense of what properties were available and what potential competitors or partners were in the vicinity. Property hunters still want all that information. But these days, they can find much of it on the Internet.
If a business were considering a move to Oklahoma City, for example, it wouldn't take more than a few keystrokes and a few minutes to learn what properties are available throughout the city. If company officials decide they like the location at, say, 101 Park Avenue, they could then find out that within a mile of that site there are about 1,200 adults ages 30 to 39 years old; 2.4 percent of the population has an annual income level of more than $100,000; and nearly 70 percent is male. Such statistics are not presented merely in charts and tables but also are offered as color-coded maps.
This is such invaluable and powerful data that it's getting to the point where localities that cannot provide such geographic information online are starting to lose businesses to those that can. What makes a site appealing is closely related to location-specific advantages, says Anatalio Ubalde, chief operating officer of GIS Planning, a consulting firm. "If I'm a business and I'm interested in finding 10,000 square feet of office space, I could find that in rural town U.S.A. or I could find it in downtown Manhattan," he notes. "That's not why businesses relocate."
In choosing one place over another, businesses are looking for unique advantages. They appraise such factors as the quality of the workforce, the existence of an enterprise zone and access to transportation. If it's too difficult to find those kinds of details, they often go to places that make it easier for them.
Three basic questions need to be answered: Are buildings or sites available? What are the market numbers for the area, in terms of demographics, workforce and spending? And what are the opportunities and partnerships possible in that specific location? A data-rich Web site using GIS to map results can answer those questions in no time.
Research shows that 80 percent of the preliminary site selection now happens on the Web. Those places not in the game may be bypassed without ever realizing it. "Companies will create a short list of potential sites using information obtained from the Internet," says Kate McEnroe, an Atlanta-based expansion and relocation consultant. "On the other hand, companies won't even consider a site if the information is not there."
And the expectation is growing that jurisdictions will offer a visual version of that information--in the form of GIS-generated maps. For instance, GIS can group and display the location of businesses by industry, enabling interested companies to see where certain industries are clustered. It's information people could not really grasp except through GIS. "If I gave you a database and you looked at it until your eyes were bleary, you would never understand it the way you would spatially," says Ubalde.
Four years ago, only a few communities were using GIS to attract businesses. Now, dozens of places are taking advantage of it. "We're seeing a much more diverse group of economic development professionals using it," Ubalde says. "We're seeing it in rural and exurban communities like Mansfield, Texas, and urban communities like Indianapolis and San Francisco."
Oklahoma City is claiming a return on investment of nearly 3,800 percent, based on the $145,000 invested in its Web site and $5.6 million in savings over two years. That savings represents the time formerly spent by brokers, site selectors and city staff. Revenue generated from new businesses is another major goal. "When you combine GIS with the distribution capabilities of the Internet, you have an unbeatable tool to attract new business in an internationally competitive market," says Brenda Workman, director of Central City Development with the Greater Oklahoma City Chamber of Commerce.
In addition to data being easily accessible and visually appealing, it is also current. San Francisco has 65 city departments that are constantly updating information. When a new business registers, for example, the tax department updates its information. Within hours, that information is sent out from the department and merged into the GIS database. Realtors take care of their end by updating the property information. "The real value is that combination--all this different data from our departments and the private sector, doing it dynamically and pushing it out to folks," says Erich Seamon, GIS officer in San Francisco.
While large cities typically develop their own GIS-enhanced business- recruitment sites on the Internet, there are ways for smaller jurisdictions to get a cut of the action at little or no cost. In some places, organizations are providing GIS capabilities for economic development on a statewide basis. The Oregon Prospector, for instance, run by a nonprofit economic development association, provides information about sites that could be located anywhere in the state. And despite competition often trumping cooperation, city leaders in Southern California believed that if small jurisdictions worked together it would benefit their region, which would help each of them individually.
Three years ago, Riverside County, along with Lake Elsinore, Murrieta and Temecula, formed a partnership to use GIS to sell the area to businesses worldwide. "All our marketing is based on GIS," says Stevie Field, manager of business development for the Southwest California Economic Alliance. "It was thought that when we pool our money together we are more effective in marketing. [GIS] tells more than a brochure or a presentation folder."
Brokers in these little towns can load into the database aerial photos, pictures and floor plans of properties. The site tells prospects all about the demographic make-up of the area and consumer expenditures. About 80 percent of the brokers in the area are participating in the site.
Maintaining GIS sites is not expensive. Tucson used pre-existing GIS data from Pima County to create an economic development site for the metro area, which includes four other communities and the unincorporated areas of the county. The city's economic development office is able to maintain the site with less than one full-time person. One analysis shows that for every dollar invested in the system, the return is $62 for what it would have cost the city, brokers and site selectors to handle everything in person.
Equally important for Tucson is the image that GIS conveys. Tucson considers itself to be on the leading edge of technology. But officials worry that has not sunk in to the outside world. "A lot of people think of Tucson as the Old West," says Kendall Bert, director of Tucson's Office of Economic Development. With GIS, "we present a much higher-tech face to the world."
Littleton, Colorado, has a different idea about how to use GIS for economic development. Rather than focusing on it as a recruitment tool, the city is turning the technology inward to help expand existing businesses. Littleton officials use the term "economic gardening" to describe the city's work on behalf of local businesses. "If you go get business, you're hunting," says Christian Gibbons, director of Business/Industry Affairs. "We're staying home and gardening."
Littleton has built a series of capabilities including GIS and database research, keeping track of stats on local businesses, running focus groups, and monitoring legislation, new product releases and trends. Basically, Littleton does for its hometown businesses--free of charge--what a large corporation would do for itself.
Littleton subscribes to 10 database research services and shares the information. Marketing is by far the most frequently requested service by small businesses. About 80 percent of the local businesses are established mom-and-pop businesses that want to sell more and market their services.
Using public demographic, consumer and neighborhood information, economic development officials can pinpoint marketing opportunities. The data can help target where a business should consider sending a direct mail piece--down to, for instance, a specific neighborhood or even a few blocks. Otherwise, businesses wind up sending materials to an entire ZIP code.
The 3 to 5 percent that are "gazelles," or growth companies, have issues related to continued expansion, a field where the database research gets more interesting, Gibbons says. They want in-depth knowledge of the marketplace. "We do competitor intelligence. They want industry trends. 'Should I expand in certain areas? Is the market going to shift on me?'"
Often they don't know about the big industry marketing analysis companies that will sell a research table for a couple of hundred dollars, providing tremendously useful information. "They still have to purchase those lists, but a lot of times they don't know those lists exist," says Eric Ervin, GIS analyst for Littleton, Colorado.
Yet the lists can be invaluable. "They can tell you the number of people who bought French poodles in the last three months who were making salaries over $60,000," Gibbons says. "A trucker and an accountant may both make $50,000. But one's going to NASCAR, the other to wherever accountants go," he says. Wherever that is, some local business needs to know.