Rick Weddle (Site Selectors Guild): Welcome to Site Selection Matters, where we take a closer look at the art and science of site selection decision-making. I’m your host, Rick Weddle, president in the Site Selectors Guild. In each episode, we introduce you to leaders in the world of corporate site selection and economic development. We speak with members of the Site Selectors Guild, our economic development partners, and corporate decision-makers to provide you with deep insight into the best and next practices in our profession. In this episode, we have as our guest, Dennis Donovan, a principal with Wadley Donovan Gutshaw Consulting, one of the nation’s leading site selection and location advisory firms. Today, Dennis will talk with us about how EDOs or economic developers can work to position their communities in the post-pandemic era. Join me as we welcome Dennis Donovan to Site Selection Matters.
Dennis, in this post-pandemic era, it seems like communities, just like companies, should be reassessing their competitive situation and their target industry focus to make sure they’re positioned correctly going forward. Is this correct? Do you see it that way?
Dennis Donovan (Wadley Donovan Gutshaw Consulting): Yes, I do. You know, this is really a continuation. I mean, it’s what I call continuous product improvement. Continuous business improvement should always be looking at the assets and liabilities that the community has to offer, and what that holds for the future, and how you rank vis-a-vis the competition. So I think that’s key. And one of…you know, in terms of competitive positioning, coming out of the pandemic, without any question, the number one consideration in terms of how successful a community will be from a retention expansion and a recruitment standpoint is the talent pool. I have never seen, even in the heydays, before the Great Recession, a tighter labor market that we’ve had today. Now, there’s change, there are differences around the country. It’s not uniform. But there are significant challenges. And they stretch from qualified entry-level through semi-skilled through skilled and certain professional positions as well.
So documenting in areas labor market resources, especially as they relate to the target industries, is going to be vitally important. And let me tell you, Rick, one of the challenges that I see not being adequately met, I do not see enough workforce assessment that is demand-driven, that we’re just taking stock of what the demand for certain skills are now and in the future. And I see too much in terms of communities and workforce development focusing on jobs. We need to be focusing on skills, the skills required, and then that leads into certain occupations or jobs. So this is gonna be really important, the demand-based, skills-based within your target industries and overall, and then I would say, you know, we hear all about upskilling and so forth. And that is true. But believe me, because of technology, there are going to be portion of the workforce that may not be able to participate fully in the post-COVID recovery. So we need to have a training aimed at not only the marginalized but at those at greatest risk of being displaced. And they can be upskilled to form bottom of the foundation for companies that are gonna require entry-level labor.
So this is a new paradigm here. And we don’t have a lot of time to do a lot of redesigning, we do it very quickly. So holistic collaborations of educators, government, business really needs to be business-led. It’s going to be key in terms of making sure that we have a workforce that can sustain our local companies and our target industries, particularly those that we’ve placed a premium for recruiting to create new jobs.
Rick: Hey, Dennis, that really makes a lot of sense. And I’ve made some notes here. I’ve got a whole bunch of topics I want to drill in just a bit. But let’s dig a little deeper on this overall concept of competitive position, if you will, for starters. How does an EDO, an economic development officer, or a community really go about evaluating how competitive they are in relation to others so they kind of become self-aware?
Dennis: It’s always difficult because when you do a self-assessment, the community or the EDO can be far more comprehensive than when you’re doing a benchmark because, you know, it’s very time-consuming and expensive to do a real deep dive on benchmark locations. This is my advice. I think that every so often, you know, it is important to take a comprehensive assessment of the assets and liabilities that a community or a region or area, a state, whatever it may be, take a comprehensive assessment of the asset and liabilities that are evident from a deep-dive evaluation. And deep-dive evaluation has to include a combination of interviews and surveys with corporations and then other stakeholders along the spectrum. That is absolutely key.
And then once that’s done… And this is important because I don’t see enough of this in target industries. Once that assessment is completed, then you need to take whatever assets have been identified and those that are most compelling. There needs to be a storyline that combines different assets into the sales message. And I don’t see enough of that, I see individual, oh, we got certain population growth, or we got 15,000 engineers. Okay, that’s good. But what does it all mean? If we tied together certain facts that surfaces assets, what storyline can we tell? And in a target industry that legitimately have a target industry, an area must have several compelling and distinctive assets. If you don’t, it’s going to be difficult to recruit.
Secondly, then, knowing what the industries are that you either have as a foundation or that you’re trying to attract, then you’ve gotta really know what is important to these industries, very specifically the type of skills sets, do they need available buildings, do they need cleanrooms, whatever it may be. That becomes important. Once that’s understood, then benchmarking through desktop research and a limited amount of original research, you take and look at who have you competed against in the past and who do you think you’re gonna compete against in the future. And you can get that knowledge, you know, from past projects that you interview companies that have selected your area recently, what other areas did they look at. And you also do some research of where certain industries are really taking hold and beginning to grow, including with startup operations, and then you do a series of statistical benchmarks. How do you stack up, pluses and minuses?
And once you bring that back, then there’s two things you do. You say, “Okay, based upon how we have done our competitive analysis, what really stands out?” And what stands out then has to be translated, again, into sales names and marketing. And then you need to say, “Okay, what have we not plug in?” And we still have to address that in our marketing and branding. But we also then need to take stock of what we can do to ameliorate some of those disadvantages vis-a-vis the competition. So that’s in a nutshell what we do, deep dive on a host location and detail statistical and anecdotal evaluation of existing and emerging competitive locations.
Rick: Dennis, I like your idea, your comment about a storyline, because all the data in the world is important, and you’ll get to that evaluation and that, but you have to…ultimately, a community’s got to be able to message that and tell a story that is compelling that makes either a talented person or an important company want to be in that community location. And that storyline also, Dennis, I mean, it’s got to be not what the community wants to say, but rather what plays well with their market, isn’t that right?
Dennis: That’s absolutely right. Look at, you know, I sometimes am a critic of target industries because I think they’re too broad. I don’t see enough real definition of what the industry is, believe it or not, and I really don’t see other than, you know, again, a silo of messages, you know, we’ve been at certain number of, you know, IT or something. I just don’t see a cohesive intermingling of factors to develop a story or a compelling argument for the industry. What does that mean? Well, what is unique and distinctive for that industry? That’s number one. Number two, target industries I see today are too broad, a biomedical, I mean, everybody’s going after biomedical. If you’re in a biofield, what are the specific subsets that you are really strong at such as therapeutics, all right? That becomes important. Advanced manufacturing is kind of a…if a company is in manufacturing and it’s not advanced, they won’t be in manufacturing very long. I don’t care if you’re making mattresses or you’re making semiconductors. So, again, in manufacturing, what are the specific industries that your area has that can support the absolutely most critical requirements of those industries? So being more defined on target industries, we got to get to that point, too much broad definition of the target industries.
And here’s another thing that I don’t see out there very well, truly documenting the industry ecosystem. What do I mean? What are the companies that are operating in the area, established and new academic programs that are geared to that particular industry? They could be certifications. They could be training programs. They could be degree programs. Nonprofits, who are the nonprofits that are contributing to the ecosystem as well? And very importantly, in that industry, what is the success and scale of entrepreneurship and startup operations? And what resources are available for entrepreneurs, startups first and second stage within that industry? So defining the ecosystem, it’s not very well done. And that’s important to businesses because, in most target industries, we want to be in a industry ecosystem. Then we need to access the existing companies. You know, again, I don’t see enough of this, you know, you go out and talk to your companies, and this ought to be done at least every two years. What’s the good? What’s the bad? And what are we going to do to shore up the bad? And then how do we promote the good? Because things change, dynamics change.
If you have a target industry, you know, I mean, these industries can be, you know, revolutionized in a number of years. So you’re gonna make sure you’re still viable for it. So we got to continuously assess. And then on your website and your messaging, a business case, what is a strong business case? I want to see a one-pager. A business case is that why this company audit come to your area. And it’s got to be compelling. If it’s rudimentary, if it’s elementary, it’s just a bunch of hyperbole or pedantics, it’s not gonna have any impact. All right, that is absolutely going to be key. And then, again, in defining the talent pipeline, you know, we need to define the skills, and the skills are probably not even in Bureau of Labor Statistics. So what are the skills that are going to be required in this industry? And they may not be reported in government sources. That’s why you got to go find out what they are. And we got to do the same for the talent pipeline. Now, it’s not enough to say I got a number of computer science graduates every year. You’re gonna match them with what the companies are looking for in terms of the skill sets. That’s another thing that’s important.
I’m a big believer in print media and visual media, traditional media in terms of advertising, but I’m also a huge believer in extensive social market advertising. And if I’m doing it, I’m gonna promote my target industries on Facebook, YouTube, Twitter, LinkedIn. Now, the other thing, too, I don’t see enough of, writing blogs. Not why it’s a great location, but writing a blog that is of value to the industry. And a tagline, “Hey, this is from a company, or this is from a group of experts, based in location X or Y.” And the same would do on podcast. Do a podcast that is beneficial to the corporate community. And then you got the tagline, “This was developed from resources in a particular area.”
Rick: Dennis, we’re gonna jump into some of those details in just a minute. But you mentioned change and how industry is changing. And I’d like to follow up on that if I could. For example, we hear a lot about supply chain realignment and how companies are adjusting their supply chain. It seems to me that a community might have been well-positioned for the old supply chain framework and wake up suddenly today and find that things have changed. And maybe the companies that they’ve been counting on aren’t distributing or manufacturing in the same locations. Are you seeing that as a possibility?
Dennis: It’s a reality. It’s more than a possibility. It’s happening. Companies are looking at…and supply chains, and the supply chain oftentimes includes companies that are making products, that are captives, they’re making in the house, they could be sub-contracting. A lot of corporations saying, “Do we even need this subcontract?” You may be in an area that has a subcontractor to a particular industry. They may want more subcontractors. They might want less subcontractors. You know, when you re-evaluate your supply chain, there could be too much of a concentration in a geographic area that could benefit your community. It may be a disadvantage to your community. Companies are saying, “You know, maybe we don’t have enough global diversity. And we need to either cap or relocate capacity locally to more global, or we’re gonna reshore and bring it in.” I can just say that supply chains are getting shorter. They’re becoming more regionalized. And they’re becoming very, very tuned more so than ever to risk and potential disruption throughout that entire supply chain. So they are being geographically reformulated in many cases. And so you need to understand that particularly in your target industries and your foundational industries. That’s important.
Rick: Dennis, you talked earlier about the existing businesses. And as we come out of the pandemic, isn’t it a great time for an EDO to update their existing industry or business retention expansion program, touching on the challenges of, let’s just say it, work from home, gig economy, all of that, the challenges that that’s presenting to communities? What should a community be doing in supporting their existing industry in this new work-from-home environment?
Dennis: Working home is one. But, I mean, what we really need to do is, I think, post-pandemic, I see a role for economic development to be a quarterback, if you will, to help companies, particularly small, midsize companies deal with the new paradigm of post-COVID. What are we talking about? I can remember when we used to have the manufacturing extension services at land-grant universities that really help businesses, particularly with technology and so forth. We need to be doing the same thing. Number one, that in a post-pandemic, there needs to be a whole series of resources, toolkits, experts that an economic development agency would have as a resource center to allow companies to access those resources to be able to fashion a strategy really for its survival and expansion post-pandemic. What does this mean? Workplace design, there’re implications here for workplace design. There are health and safety issues. There’s a work at home versus physical office. I don’t believe that you’re going to see wholesale remote worker work at home, I think it’ll be a hybrid. But how do companies cope with that? All right.
And then as a workforce of the future, we have trends of globalization of technology and demographic change, you know, we’re becoming a older country. You know, that’s a real serious issue. So they’re not in their favor. So having the kind of expertise in education and consulting with your local companies, to me, is going to be very, very important. This is a new and extended, if you will, role that economic development agencies need to play in retention and expansion.
Rick: You know, Dennis, you mentioned earlier the word upskilling. And you also mentioned that we’re in the tightest labor market you’ve seen in many years. Let’s talk a little bit more about talent and workforce. You know, as you said, you see Help Wanted signs almost everywhere. But you’d also see many workers that still haven’t or can’t find jobs in their preferred career or maybe aren’t equipped, if you will, to compete for the jobs that do exist. What are your deeper thoughts on talent and workforce and how a community can be effective in addressing this?
Dennis: Again, you know, I think that number one is to assess what are the skills that the local businesses need. That’s gonna be absolutely critical. And it’s skills versus job. I mentioned before, you know, we really need to start retraining on positions that are higher risk of automation, food preparation workers, receptionists, front desk, you know, ticket takers, medical assistants, things like this. This is gonna be key. Because the more we can retrain the portion of the labor market that may be left out of this new technology-driven economy, well, then that’s gonna help companies be able to fill positions, they can train. And we have to really pay very close attention to the marginalized, you know, the long-term underemployed, the disabled, formerly incarcerated. You know, it’s gonna be important to look at the marginalized elements of our workforce and to try to get them into the workforce to be trained with basic skills and so forth. So that’s key. But then manufacturing companies are adopting rapidly what they call factory 4.0. This is the introduction of artificial intelligence, robotics, other technological innovations.
And this is gonna require different skill sets. So understanding what those skill sets are and developing the talent pipeline really starting at K through 12 but certainly in the community and 4-year colleges is gonna be absolutely critical. This is gonna be key. And I also think that talent attraction…yeah, man, I mean, you know, we have spent a lot of dollars and resources on recruiting businesses. Now, we got to start recruiting talent. So talent attraction, come-home campaigns, move-here campaigns, job networks, you know, possibly, even providing some cash incentives. I’ve seen cash incentives provided for remote workers. Maybe we got to start doing this for skilled workers as well. So this is going to become absolutely important as talent development and talent attraction. It’s gonna have to be given far more resources behind it than ever before.
Rick: You know, it’s all about supply and demand, and when the demand is there and the supply is not there, you have to be creative, I guess, on how you go about it. Let’s switch gears a little bit and talk about marketing communities. You started to share some of your thoughts on what communities need to be doing. It does seem like that, during the pandemic, almost everything is shifted online, you know, from websites to digital marketing efforts, to virtual outreach and sales calls, even virtual site visits. From your point of view, how much of this will continue? Is virtual here to stay? And how does the community take advantage of this change?
Dennis: Yeah, I think it’s a great opportunity for communities. Virtual site location decision-making is here to stay. We will take the process of selecting a new site further along utilizing virtual resources as opposed to on-site resources than ever before. Being able to meet the requirements for companies and consultants that are going to be doing virtual information gathering and analysis is gonna be key. So what does that mean? Well, number one, you got to have a great website. And that website needs to have information that not only consultants but companies can use as well. And, you know, because the consultants only represent maybe 30%, 40% of the marketplace. And so we may have a lot of data that companies or that, you know, the do-it-yourselfers, or those that are being helped out by, you know, a professional not in our field, an attorney or something, they’re gonna need a lot of data. So data-rich websites are gonna be really critical as well. But having the ability to do virtual community tours, I would like to see communities offering…you know, you could even do…these could be the equivalent of videos, you know, a virtual presentation, if you will, on target industries.
You know, we go through the entire ecosystem of a target industry. This is what we have to offer within the community. It needs to be done virtually, all right? I think virtual sales calls are gonna be key. You know, we can have rather prospective trips. We can have virtual meetings with companies and prospects as well. I see that, you know, 360 tours of submarkets, real estate, and labor submarkets are gonna be key. Absolutely important. There are 360 tours of your key sites and buildings. So, you know, we’ll need to have a whole slew of tools that are virtual tools to be able to effectively market communities. And then, as I mentioned, digital marketing is really key. You know, you gotta be made aware of…and many multiple modes on social media platforms.
Rick: Does that mean also… You mentioned skills earlier and upscaling. It seems to me that a lot of economic developers are gonna need to be retrained a little bit, or you’re gonna have to have new talent in their shops to manage this virtual, and this data, and this online world.
Dennis: Hey, you know, I’m in a bubble, so no different than some of the other fields. I mean, you’re gonna need… You know, data analytics is gonna be really critical. You know, artificial intelligence is going to be key. So, you know, those will do a really good job in terms of how you present data, how you go and get data because it may not be readily available, and then how you conduct, like I said, this virtual reality. I mean, they’re reality tours. That’s what it is. You know, it’s AR. You know, it’s a way artificial reality. I mean, this is really going to be key. You know, it’s nice to host people on a FAM tour. How about conducting virtual FAM tours? You reach a lot more of an audience than you do just with a limited FAM tour. So I think that the virtual world is here to stay. I know, we are taking our part… Unless it’s a very, you know, unique industry where, you know, the sites are really critical, you know, with infrastructure and so forth, we are taking virtual site analysis probably a third further data decision pathway than we did a year ago.
Rick: That’s amazing. That’s really amazing. And, you know, that’s been changing over time. But now it’s accelerated dramatically. You know, Dennis, you’ve given us a lot to think about in this podcast today. What a great conversation we’ve had. But that’s really all the time we have. So let me say thanks right now to Dennis Donovan with Wadley Donovan Gutshaw Consulting for talking with us today on Site Selection Matters.
Dennis: Rick, it’s been my pleasure. Thank you.
Rick: Thanks for listening to this episode of Site Selection Matters. And a special thanks today to Dennis Donovan of Wadley Donovan Gutshaw Consulting for helping us understand how communities can compete in a post-pandemic era, one informative discussion and one that leaves us with a lot to think about. Again, I’m Rick Weddle, president of the Site Selectors Guild. This podcast episode presents my views and the views of my guest, and they do not represent the views or opinions of the Site Selectors Guild or its membership. We hope you’ll subscribe to Site Selection Matters podcast on Apple Podcasts, Stitcher, Spotify, or wherever you listen to your podcasts. We look forward to bringing you some great discussions in the year ahead. And until next time, good day.