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Louisiana to Site Seekers: What Recession?

Louisiana’s economy and job creation have been outpacing the nation throughout the past two years. Come see how this Southern state can boost your business. Louisiana is bucking the national recession by having an economy that currently is outperforming both the South and the nation. Unemployment rates in 2009, according to Louisiana Economic Development (LED) officials, was down about one percent since January 2008, bringing it to 6.7 percent as compared to the national average of 10 percent. The year 2009 saw expansions and relocations that resulted in more than 21,000 new jobs, $2.5 billion in new capital investment and $53 million per year in new state tax revenues. “Our aggressive focus on preserving our existing jobs and attracting new jobs is resulting in increases in our national rankings, improvements in our business climate, population in-migration and most importantly more good job opportunities for our people,” Gov. Bobby Jindal says. In fact, Louisiana tied for third among all U.S. states in Gallup’s Job Creation Index for 2009. According to Moody’s Economy Adversity Index, New Orleans, Lafayette and Lake Charles have emerged from the recession. “There is no longer a placeholder for Louisiana at the bottom of the major economic and business climate rankings,” says Louisiana Economic Development Secretary Stephen Moret. “The positive national recognition Louisiana has received since 2008 is a strong indicator that our economy has performed better than the South and U.S. during the recession. This consistent recognition also demonstrates that we are taking the right steps to grow our economy, create better job opportunities and position our state for long-term economic growth.” But the governor and the state’s economic development officials aren’t resting on their laurels, in fact, in April, Gov. Jindal laid out the Louisiana Way Forward. “The Louisiana Way Forward means that during these tough economic times, we’re pursuing reforms and efficiencies that make government do more with less. Families and business across Louisiana are tightening their belts and we’re doing the same for state government,” says Gov. Jindal. “The Louisiana Way Forward will create a more accountable state government so that even when our revenues grow back, we will not simply restore funding to the status quo, but instead, we’ll make investments that produce results.” The Way Forward includes further developing LED’s recently launched priority initiatives, including: • The Louisiana FastStart program—building on the expertise of national-caliber corporate training experts recruited from around the country, Louisiana FastStart is a first-class workforce solutions provider executing more than a dozen pilot projects—more than 11,000 hours of […]

Luxembourg: Dynamic Country, Grand Impact

Research and innovation are key drivers in modern industry. Luxembourg has unveiled new initiatives that are attracting investors and creating a dynamic environment for existing industries to grow. Luxembourg, officially called the Grand Duchy of Luxembourg, is located in one of the most dynamic regions of the EU at the heart of northwestern Europe where France, Germany and Belgium meet. Luxembourg is unique in that it is the world’s only remaining sovereign Grand Duchy—a territory whose head of state is a monarch. These and other factors have contributed to Luxembourg’s strong political, economic and social stability. In addition, its multiculturalism and multilingualism, with English, French and German being widely spoken, make Luxembourg a very attractive location for investors. In fact, the Grand Duchy’s international community has grown so much that it now represents about 42 percent of the population. In addition, around 150,000 non-residents commute to Luxembourg to work each day, representing about 44 percent of the total workforce. Over the years, Luxembourg has risen out of the shadows of its bordering countries to emerge as a strong player in the global marketplace. According to the Institute FERI, Luxembourg ranks number 1 in a survey analyzing European cities and ranking them according to their economic performance, the purchasing power of its citizens, the unemployment rate and its population until 2015. About half a million inhabitants live in Luxembourg (an area of land about the size of Rhode Island) and enjoy the highest GDP per capita in the world. Luxembourg is a gateway to the European market, giving companies access to some 500 million consumers. However, according to Francois Knaff, executive director of Luxembourg’s Office of Economic Development in New York, Luxembourg offers some unique advantages. “Luxembourg offers not only a central access, but unlike some other surrounding countries, we also offer the advantage of political, economic and social stability, as well as a strong fiscal environment with competitive salaries and lower tax rates and social taxes.” Luxembourg has risen to become one of the top locations for leading-edge communications infrastructure and is home to a host of Internet firms including Amazon, Apple, eBay and Skype. In March 2010, Luxembourg ranked second worldwide in mobile, fixed, and Internet connectivity, and has Europe’s lowest ICT costs, according to a new International Telecommunication Union survey of 159 nations. Luxembourg’s logistics sector is also ahead of the curve, rating above other European countries the UK, Switzerland, Belgium, Ireland, and France. In January 2010, it ranked fifth in the world in ease of importing and […]

60 Seconds with Hartley Powell, National Leader of KPMG’s Global Relocation & Expansion Services

60 Seconds with Hartley Powell, National Leader of KPMG’s Global Relocation & Expansion Services

KPMG recently released the results of its 2010 Competitive Alternatives study. We asked Hartley Powell to comment on major trends tracked by the study. BF: Do the 2010 results show an improvement or a decline in overall U.S. competitiveness? HP: My assessment is that the United States is holding its own in terms of cost-competitiveness relative to other industrialized nations. While the ranking of the United States in 2010 is somewhat lower than in 2008, this is due mainly to the shift in emphasis for the 2010 edition, which bases the comparison on the major cities within each country rather than one with a broader base of larger and smaller cities. Over the last few years, U.S. companies have achieved massive structural changes that have lowered the cost of production. BF: What is the biggest factor currently impacting U.S. competitiveness? HP: Productivity growth has clearly been a key factor in spurring U.S. competitiveness in the global economy. Despite the impact of the recent financial crisis and increased competition from fast-growing economies, such as those in China and India, the U.S. economy has demonstrated its resiliency during the recent recession, and strong productivity performance has been an important contributor to that success. This improved productivity supports solid competitiveness for the U.S. for the near and longer term. BF: We were surprised to see Mexico get the top ranking for R&D cost-competitiveness. Is the skill-level there comparable to the United States and Europe? HP: R&D includes a wide range of activities, from scientific research to prototype manufacturing. Many companies have developed and expanded these types of operations in Mexico for many years, so it would be safe to assume that their needs are being met. BF: The study lists increased electricity rates as a cost trend in the U.S. Will this be a temporary disadvantage as more alternative energy comes online? HP: A number of industry studies are projecting strong growth in U.S. electricity demand over the next several years, leading to continued upward pressure on U.S. electricity rates. Clearly, electricity prices vary significantly across different regions of the United States. Renewable energy mandates can increase the cost of power since renewables are generally more expensive than traditional sources of energy. While future demand may be met from alternative or renewable sources, we still do not anticipate a decline in rates. BF: The study indicates that labor costs have the biggest impact on cost competitiveness. Can a location mitigate that impact if it has an available pool of skilled workers within proximity […]

Race to the Bottom

KPMG’s 2010 Competitive Alternatives study reveals that the push to be the location with the lowest cost of manufacturing is heating up around the world. In a recovering economy, every major business expansion, relocation or new facility is the focus of intense competition. With fewer projects to zero in on, every location is vying to offer the lowest overall manufacturing costs. One of the most coveted measures of cost competitiveness is found in KPMG’s Competitive Alternatives study, which is conducted every two years. The 2010 Competitive Alternatives survey examined 112 cities in Australia, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, the United Kingdom and the United States. The KPMG study measured 26 significant cost components most likely to vary by location, including: labor, taxes, real estate and utilities, as they applied to 17 business sectors over a 10-year planning horizon. A range of non-cost competitiveness factors also were considered, as were currency exchange rates. The 2010 study was revamped to include a new focus on the largest cities in each country, and it includes a number of major cities not included in the 2008 survey, such as Berlin, Los Angeles, Lyon, Miami, Osaka, Rome and Tokyo. The results, released at the end of March, revealed some bad news for the U.S.—the United States dropped from third place in the 2008 KPMG study to seventh place in the 2010 survey. Mexico and Canada continued to hold onto the first- and second-place rankings, respectively, while the Netherlands surged from number seven to number three. “The global recession has not been the only factor impacting international business over the last two years,” explains Simon Harding, associate partner in KPMG’s Advisory Service practice and head of its Canadian Strategic & Commercial Intelligence practice. “Divergent trends in exchange rates, utility and transportation costs, taxes and incentives all helped to shape the international competitiveness environment in 2010,” Harding noted. “The degree of variation in business costs between major cities in some countries also is quite remarkable. All of these factors highlight the importance of having access to up-to-date intelligence on international business competitiveness issues for both businesses and governments.”   TAMPA AND ATLANTA LEADING LOW-COST LARGE U.S. CITIES Harding told Business Facilities that this year’s emphasis on the largest cities in each country was a primary factor in the downward shift in the U.S. competitiveness ranking. The change in focus impacted on the U.S. ranking due to the greater variation in costs between the largest cities and regional cities in the U. S. The cost […]

Maryland Corporate Moves

General Motors To Expand Green Manufacturing In Baltimore General Motors will produce next-generation, two-mode rear wheel drive motors and related electric drive components at GM Powertrain Baltimore in White Marsh, MD. Gov. Martin O’Malley, Sen. Barbara A. Mikulski, Sen. Benjamin Cardin, Rep. C.A. Dutch Ruppersberger and Baltimore County Executive Jim Smith jointly announced the green manufacturing expansion. GM will construct a high-volume electric drive manufacturing facility at the Baltimore County Transmission plant, creating approximately 200 jobs and retaining hundreds more already at the plant. “Maryland is proud to be home for this new innovation driven by GM for the next generation of green technology. The technology being unveiled today will help drivers drive further on less fuel, and provide green jobs for Marylanders to support their families,” said Gov. O’Malley. “Maryland is home to one of the nation’s most talented and skilled workforces, and GM’s decision to house the manufacturing of their new technology in our State is validation of their commitment to fuel innovation, create jobs, and drive economic progress here in Maryland.” Baltimore County Executive Jim Smith said the investment in green technology at GM’s Baltimore transmission plant will bring automotive jobs back from Mexico to White Marsh. “Today’s announcement is great news for GM’s Baltimore Transmission Plant, great news for jobs, and great news for Maryland’s economy. Just last year, people wanted to write-off the American auto industry. But I and my Team Maryland colleagues knew differently,” Sen. Mikulski said. “Building the fuel efficient engines of the future, GM’s Baltimore Transmission Plant is going to lead the way to a better way, showing America can compete, America can innovate, and the American auto industry can lead again.” GM is investing $129 million in the Baltimore Transmission Plant to build electric motors and related electric drive components. The company was selected by the U.S. Department of Energy for a $105 million grant for electric drive systems manufacturing. In addition, the State of Maryland is providing a $3 million grant through the Maryland Economic Development Assistance Fund (MEDAF) and a $1.5 million grant from the Maryland Department of Labor, Licensing & Regulation Workforce Training Fund. Baltimore County is providing a $6 million conditional grant from the Baltimore County Business Growth Fund and a $150,000 Baltimore County Economic Development Training grant. “I applaud GM’s decision to partner with Maryland in using the technology of the future to build cleaner, more efficient cars that will lead to in new jobs for Marylanders,” said Sen. Cardin, a member of the Environment and […]

Certified and Ready to Go

There are no national standards for certifying a site. Here is a handy guide to the typical certification process from a firm that specializes in evaluating mega-sites. Q As we begin to look at sites for a new facility, we are coming across a number of sites designated as “Certified.” What is a certified site and how does this designation create value for us? The Expert Says: A certified site is one which has been screened and evaluated against a set of development criteria in order to assess, and certify, its readiness for development. The first thing to know is that there are no national, centralized standards for site certification. So if you are evaluating a site that carries such a designation, you should still evaluate the site in full against your project specific criteria. If a site has been certified, it will have readiness advantages if the evaluation items and their criteria definitions are properly identified and designed to align very closely to what you are looking for in a site. All of these criteria issues are ones that matter to you in how timely and how costly it will be to get you project developed on the property, so properly designed and executed programs will have real bottom line value to you. Most certification programs will cover such fundamental criteria as property identification, property ownership and control, and availability. However, the “certification” criteria for each of these factors may vary from one program to another. With identification, there may informal descriptions or there may be full boundary surveys completed. With ownership and control, one property may have an owner or owners identified while another may not address this in full, particularly for a site that has multiple owners or different owners of different parcels. Availability may be documented with a formal real estate listing, or an option held by a development agency, or even simply a letter from the owner(s). One key element of availability is an opening or list price. A fundamental real estate issue is zoning. Since there are many reasons why a property may not be currently zoned for your intended purpose (including a lack of zoning regulations in the community), a properly certified site should address the zoning issues and the process, schedule and likelihood of achieving the required zoning designation in a timely manner. Constructability issues include surface and near-surface conditions such as flood plain and soil conditions. A major component of a site’s readiness is its development status. Four key studies that […]

Southern Innovation in the Carolinas

Creating Exciting New Workforce Development Strategies for the 21st Century In the past few years, the Carolinas have become well known for their creative and innovative climate, as well as their low-cost business environment. North Carolina and South Carolina has spent the past two decades certifying shovel-ready sites and pioneering new incentives. For example, Gov. Bev Perdue recently established the North Carolina Innovation Council to foster strategic investments and policies in the growing knowledge and innovation economy. The North Carolina Innovation Council is part of Gov. Perdue’s JobsNOW initiative. Through JobsNOW, the state will work aggressively to create jobs, train and retrain its workforce, and lay the foundation for a sustainable economic future. “To continue growing jobs in North Carolina, we must make sure this state is poised to compete globally in the 21st century,” says Perdue. “Innovation is North Carolina’s launch pad to success in the global economy, and it’s a primary way for us to maintain and sharpen our competitive edge.” North Carolina recently announced a partnership with Microsoft to provide free technology training to its citizens through the North Carolina Community College System, the Division of Workforce Development and the Employment Security Commission. The Elevate America courses range from basic- to intermediate-level technology literacy, and even provide a portion of the recipients with Microsoft Certification. “This partnership will provide North Carolinians with another opportunity to retrain for today’s new economy,” Gov. Perdue says. “At a time when businesses are seeking a highly qualified, well trained workforce, Elevate America can give potential employees new skills to succeed.” In South Carolina, the focus also is on creative workforce development strategies. The South Carolina Department of Commerce is committed to meeting a business’ specific workforce needs. The Department of Commerce’s Workforce Division and the readySC™ program, offered through the S.C. Technical College System, coordinate training needs at no cost for eligible new or expanding companies throughout the state. The readySC™ program works with the state’s 16 technical colleges to develop training curriculum tailored to meet a company’s workforce requirements. More than a quarter-million workers have been trained since the nationally recognized program’s inception. “South Carolina is dedicated to establishing an environment where businesses can prosper,” says Gov. Mark Sanford. “The state has taken necessary steps to further enhance its business-friendly environment. Efforts like tort reform, workers’ comp reform, lowering taxes and expanding healthcare access for small businesses are just a few reasons why South Carolina has been ranked among the top five most business-friendly states for the past four years […]