By Business Facilities Staff
From the July/August 2020 Issue
Business Facilities didn’t let the COVID-19 crisis skew the results in our annual rankings report. Our rankings remain the most credible and comprehensive location leaderboards.
The process of evaluating the information we use to calculate our annual rankings usually begins in the spring. In the spring of 2020, as the unfolding calamity of the coronavirus pandemic turned all of our lives upside down, we had to decide what, if any, impact the disruptions of COVID-19 would have on the results in our 16th Annual Rankings Report.
We always try to configure our rankings as forward indicators that give you a clear picture not just of which locations are atop our leaderboard, but also who’s got the Big Mo—the assets, strategies and track record that spell growth potential.
In our 16th annual rankings, we’ve acknowledged the unique circumstances of what we all hope is a temporary disruption. We’ve dropped our overall state and metro Economic Growth Potential rankings for this year’s report; we won’t speculate on which regional economies are going to recover the fastest from this unprecedented crisis. We also reset our rankings data clock, setting it early enough to make sure that the wind-shear level turbulence the pandemic has inflicted on economies, markets and employment statistics did not skew our results. You might say we’ve quarantined COVID-19 and locked it out of our Rankings Report.
We hope these adjustments help you see through the fog of uncertainty now cloaking everyone’s endeavors, enabling you to view BF’s 16th annual Rankings Report in the same context you viewed the 15 that preceded it: the most comprehensive and credible rankings in our industry. And so, without further ado, here are the Best of the Best.
Business Facilities’ 16th Annual Rankings: State Rankings Report
TEXAS TOPS IN BUSINESS CLIMATE
It should come as no surprise that Texas, BF’s 2019 State of the Year, stands atop the leaderboard in our flagship Best Business Climate ranking.
The same factors that propelled TX to its record fourth SOTY award were in play when we tallied up the advantages of doing business in the Lone Star State. Texas has established its hegemony in an impressively diverse array of growth sectors. A rapidly expanding skilled workforce, solid infrastructure, readily available renewable energy and a vibrant innovation ecosystem are just a partial list of the must-haves TX puts on the table for corporate site selectors evaluating locations for their next project.
If that’s not enough to beat the competition, our friends in Texas will see your offer and raise it with lucrative incentives. When the governor reaches for the big chips in the Texas Enterprise Fund, it’s usually time for the other folks in the game to fold ‘em.
Just about all of the advantages cited above were in play this month when Austin, TX landed the most coveted project of the year to date: the gigafactory that will produce Tesla’s new Cybertruck, Semi truck and Models 3 and Y. What is expected to be a 5-million-square-foot assembly plant that will employ up to 5,000 workers will rise on a site on the southeastern edge of the Texas capital.
According to reports, this mega-site selection decision came down to two finalists, Austin and Tulsa, OK. When Travis County, TX (and the local school district) agreed to pony up more than $65 million in tax rebates over 10 years, the deal was sealed.
Rounding out the top five on our business climate leaderboard Virginia, Tennessee, Alabama and North Carolina, respectively.
Tennessee is a perennial contender for BF’s business climate crown, living up to the credo expressed on the TNECD website: “…high expectations, low debt and a pro-business regulatory environment.” The Volunteer State consistently sets a high bar in meeting all of the priorities of businesses evaluating locations in TN, whether it’s customized workforce training, precertified sites or lower industrial electricity costs.
Alabama, home to thriving automotive and aerospace sectors, continues to expand its reach. The state’s central Gulf Coast location makes it attractive to companies looking for regional distribution options.
ALDI U.S. recently announced it will build a new regional headquarters and distribution center in Loxley, AL to support the company’s growing footprint along the Gulf Coast. The grocery retailer purchased 160 acres in Loxley’s industrial and warehousing district, north of I-10 exit 44. The 564,000-square-foot facility will bring approximately $100 million in capital investment and create 200 jobs for Loxley and Baldwin County. Construction is scheduled to begin in early 2021.
“We are eager for ALDI to expand its presence in our state,” said Alabama Gov. Kay Ivey. “We’re proud to stand behind ALDI’s commitment to bringing value to the people of Alabama and the Gulf Coast region, and we welcome the company’s plans for a regional headquarters and distribution hub in Loxley that will create jobs for our hardworking citizens.”
North Carolina has a growing reputation as a leading high-tech hub, but the Tarheel State hasn’t forgotten its roots as a leader in traditional sectors like furniture-making.
GoldenHome International Inc. will invest $86 million to establish its North American headquarters in Concord, NC. The manufacturer of customized residential cabinet systems will create 257 jobs in Cabarrus County over the next five years.
GoldenHome International Inc. is the U.S. subsidiary of Xiamen, China-based Xiamen GoldenHome Co., Ltd. The publicly-held company provides high-end integrated kitchen cabinets and customized furnishings, including closet systems, vanity suites and interior doors. Employing a total workforce of more than 4,000 worldwide, GoldenHome products are distributed and sold through 2,000 franchise stores around the world. The company plans to base production, business operations, R&D, distribution, marketing and training at its new North American outpost in Concord.
Centene Corporation, a Fortune 50 provider of managed care services for public and private health plans, will create an East Coast regional headquarters and technology hub in Charlotte, NC. The move will bring 3,237 new jobs to North Carolina and a total investment of more than $1 billion by 2032.
“We chose Charlotte as the home to our East Coast headquarters because we believe it will enable us to continue our strong growth and our mission to serve the most vulnerable populations,” said Michael F. Neidorff, Chairman, President and CEO of Centene. “We look forward to our future in Charlotte and intend to be a strong part of the community, as we are in all of the places where we have business operations.”
Centene’s 3,237-job commitment makes the company’s new Mecklenburg County campus the largest job creation project in the 18-year history of the Job Development Investment Grant (JDIG) program. “Centene’s investment here is great for the Charlotte area and our whole state,” said Gov. Roy Cooper. “Centene knows that North Carolina has a resilient economy, ready workforce, livable communities and a host of other assets that make our state a leading destination for forward-thinking businesses.”
WIND POWER: BACK IN KANSAS
Not since Dorothy tapped her red shoes together has the wind made bigger news in Kansas: the Sunflower State is our top-ranked state for the percentage of electricity generated from wind power, snatching the crown from longtime champ Iowa, this year’s no. 2.
Kansas also is sprinting up the ladder of installed capacity, blowing past California to seize fourth place in BF’s Installed Wind Power Capacity ranking.
The most surprising thing about the relentless rise of wind power in Kansas is that it didn’t happen years ago. KS had to overcome a rather unique homegrown obstacle: Koch Industries, the oil and gas titan based in Wichita. For years, the Koch brothers waged an aggressive lobbying campaign that tried to undercut incentives aimed at expanding installed wind power in KS.
But even Koch Industries couldn’t stop the winds of change sweeping across the U.S. energy landscape: the exponential expansion of wind energy. Today, there are more than 60,000 wind turbines spinning across 41 states, powering the equivalent of more than 35 million homes in the U.S.
The U.S. added 9,143 MW of wind power capacity to the grid in 2019; another 44,000 MW of wind projects, representing more than $62 billion in investment, are either under construction or in advanced development.
BF has been telling you for years about the potential of offshore wind power to become a major source of energy for the United States. In 2019, the offshore wind energy sector finally arrived, so we created a new renewable energy category in our 2020 state rankings: Offshore Wind Power. Our ranking is based on announced state commitments to install offshore wind capacity by 2035.
East Coast states are leading the way in the creation of this new renewable power source, which has unlimited potential if related investments are made to connect power grids to new offshore wind farms. No. 1, New York, is aiming for more than 9,000 MW of offshore wind power; second-place NJ has announced it will build its capacity up to 7,500 MW.
In June, Gov. Phil Murphy announced plans to develop the New Jersey Wind Port, a first-in-the-nation infrastructure investment that will provide a location for essential staging, assembly and manufacturing activities related to offshore wind projects on the East Coast.
The $400-million the Garden State has earmarked for the New Jersey Wind Port will be the biggest investment in Salem County in a generation. The Wind Port has the potential to create up to 1,500 manufacturing, assembly and operations jobs, as well as hundreds of construction jobs in NJ.
Manufacturing and marshalling projects supported by the Wind Port will drive economic growth in South Jersey, and throughout the state, Murphy said. NJ is committed to using union labor to construct the Wind Port and intends to set a new standard for inclusion of minority and women workers and business owners. Construction is targeted to begin in 2021.
“Offshore wind is a once-in-a-generation opportunity to not only protect our environment but also greatly expand our state economy in a way that has immediate impacts and paves the way for long-term growth,” Murphy said. “The New Jersey Wind Port will create thousands of high-quality jobs, bring millions of investment dollars to our state and establish New Jersey as the national capital of offshore wind. This is a vital step forward in achieving our goal of reaching 7,500 megawatts of offshore wind power by 2035 and 100 percent clean energy by 2050.”
Construction is planned in two phases, beginning in 2021. Phase 1 will develop a 30-acre site to accommodate marshalling activities and a 25-acre component manufacturing site. Phase 2 adds another 150+ acres to accommodate expanded marshalling activities and extensive manufacturing facilities for turbine components like blades and nacelles. The state currently estimates the Wind Port will cost between $300-400 million at full build. The New Jersey Economic Development Authority (NJEDA) is leading development and is currently considering a range of public, private and public-private partnership (P3) financing options.
The U.S. installed 13.3 gigawatts of solar photovoltaic power capacity in 2019 to reach 77.7 GW. Solar accounted for 40 percent of all new electric generating capacity added to the grid in 2019, more than any other energy sources (including natural gas) and the highest percentage achieved thus far by solar.
California remains the eternal Sun King: the Golden State has four times as much PV solar capacity as second-place NC. Georgia moves into the top 10 in installed solar power at no. 9.
VIRGINIA IS WIRED FOR SUCCESS
Steel, concrete, low-cost electricity from fossil fuels and wide-open spaces ripe for development were critical commodities required for growth in the 20th century, but data is the currency of the realm in the 21st. So this year we’re introducing a new category that we’ll call a flagship ranking from its inception: Digital Infrastructure.
These are the states that are wired for success, having laid the foundation—okay we’ll call it the ultimate database architecture—needed to support the growth sectors that have a voracious appetite for data in the emerging age of digital transformation.
Virginia is the top-ranked state in our first Digital Infrastructure ranking, a choice made easy by the impressive assets the Commonwealth has deployed to create a gigabit superhighway for data-driven high-tech businesses.
Virginia is home to the largest assemblage of data centers in the world, with Northern Virginia alone accounting for more than 100 (out of 504 known hyperscale data centers worldwide) that total more than 13.5 million square feet of data center space. Synergy Research Group estimates that 25 percent of U.S. hyperscale data centers are located in VA.
In Northern Virginia, network connectivity traces its roots to the U.S. government’s experiments in wide-area fiber optic networking in the 1960s. Today, an intersection of mission-critical fiber backbones connects Virginia to all major markets in the U.S., along with the highest density of dark fiber in the world. An estimated, 70 percent of internet IP traffic is either created or passes through Loudoun County’s “Data Center Alley,” making Ashburn the epicenter for global interconnection.
Virginia has taken a leadership position in cloud computing and cybersecurity, edging out Texas this year as the top-ranked state in BF’s Cybersecurity Leaders ranking. Virginia is at the forefront of talent development in this red-hot growth sector. VA is uniquely equipped to succeed in this sector, with close proximity to the federal government, unparalleled assets in information technology and higher education institutions that are training the next generation of cybersecurity professionals.
The growing cybersecurity sector in Texas is centered in San Antonio, which bills itself as America’s Cyber City. The alignment of education, industry and government within cybersecurity, and the ability to collaborate across these sectors, presents the city’s most significant opportunity for industry development. What began in 1948 when the Air Force established its Security Service operations in San Antonio has grown into a national leading cybersecurity hub.
San Antonio has the highest concentration of cyber and intelligence professionals outside of the national capital region. Proximity to highly advanced DoD and military operations, including the Air Force Cyber Command and NSA Texas, paired with leading cyber education programs, and a competitive cost of doing business puts San Antonio in a position that other cities cannot duplicate.
“To further develop San Antonio’s cybersecurity dominance, we’re focused on talent development tailored to industry needs in the cybersecurity industry,” said Tom Long, Chief Development Officer of the San Antonio Economic Development Foundation. “It’s a strategy gaining attention and investment from cybersecurity operations large and small, as well as large corporations with significant internal cybersecurity hub operations.”
Industry plays a key role in shaping San Antonio’s cybersecurity workforce efforts, through the San Antonio Economic Development Foundation’s workforce development team SA Works.
GEORGIA: NO. 1 IN FILM PRODUCTION
Georgia takes the crown in our new Film Production Leaders category, ranking the states that are the top locations for motion picture and TV production.
According to the Georgia Department of Economic Development, the Peach State’s burgeoning film production industry took in a record $2.9 billion in fiscal year 2019, with 399 productions filmed in Georgia.
“The Peach State remains the Hollywood of the South, and companies across the globe have Georgia on their minds as a great place to invest, expand and relocate,” Gov. Brian Kemp said, in announcing the record haul from film production. The 399 productions filmed in Georgia included 26 feature films, 31 independent films, 214 television series, 91 commercials and 29 music videos.
“The entertainment industry has found a home in Georgia,” said GDEcD Deputy Commissioner for Film, Music & Digital Entertainment Lee Thomas. “While the spotlight certainly shines on our competitive incentive, it is the Georgia-based skilled crew, diverse topography, available infrastructure and the hundreds of small businesses that support our productions that keep us ranked as one of the top filming locations in the world.”
Michigan, Ohio and Indiana have repeated as our top three states, respectively, in Automotive Manufacturing Strength. In January, BF announced that Michigan Economic Development Corp. had been awarded our 2019 Deal of the Year Gold Award for Fiat Chrysler Automobiles’ (FCA) expansion, a project that includes a new $4.5-billion Jeep assembly plant in Detroit, and production expansions at four other Michigan plants which will bring more than 15,000 direct and indirect new jobs to the region over the next three decades.
Ohio’s already formidable auto supplier network keeps getting stronger.
Alcorta Forging Group recently announced it will establish its first U.S. manufacturing operations and regional headquarters in Marysville, OH. The 100-year-old Spanish automotive supplier will invest $15 million and create 50 new jobs in the Columbus Region with a potential expansion to double in five years, pending state and local approvals.
Alcorta plans to build its new 150,000-square-foot forging and manufacturing facility on 12 acres of land in the Marysville 33 Innovation Park, selecting Dublin Building Systems as its design-build partner. The project will be completed in three phases.
Texas, which rises to No. 7 in our annual automotive strength top 10, is well on its way to cementing its leadership position in truck manufacturing in the U.S. Tesla’s gigafactory won’t be the only truck assembly plant rising soon in the Lone Star State: Navistar recently broke ground for a commercial truck and bus manufacturing facility in San Antonio, bringing 600 jobs to the area. Vehicle production will begin in early 2022.
STILL NO. 1 NO MATTER WHAT IT’S CALLED
This year, we’ve renamed our flagship Workforce Training category to better reflect the multi-tasking that is now required from state workforce development programs: henceforth, this ranking will be known as Workforce Development/Talent Attraction.
As it has for the past decade, Louisiana Economic Development’s FastStart program remains the gold standard for customized workforce development and talent attraction. LED FastStart pioneered the use of iPads and other digital platforms to provide real-time training tools.
Virginia surged into third place in our annual workforce training and recruitment sweepstakes, putting down a marker that it intends to go toe-to-toe with workforce development leaders Louisiana and Alabama. Earlier this year, VA unveiled the Virginia Talent Accelerator Program, delivered by the Virginia Economic Development Partnership in partnership with the Virginia Community College System.
Virginia’s Talent Accelerator provides training and recruitment solutions that are fully customized to a company’s unique operations, equipment, standards and culture. All program services are provided at no cost to qualified new and expanding companies as an incentive for job creation.
Customized, job-specific training services are designed and delivered using methodologies and media determined to be most effective for accelerating learning in each topic. These can include hands-on training, simulations, broadcast-quality videos, illustrated work instructions, instructor-led classroom sessions, animations and e-learning modules. All company-specific materials developed during the project become the property of the client and all proprietary information is protected by a non-disclosure agreement.
Recruitment services offered by the Virginia program can include localized company- and job-specific recruiting web pages, applicant tracking, video job descriptions, quality of life videos, high-potential candidate identification and social media outreach. VA’s recruitment effort goes the extra mile to ensure good matches between employers and potential employees, with pre-employment training of job candidates.
CALIFORNIA: BIRTHPLACE OF BIOTECH
Because California’s population and economy might dwarf most of the other states, the Golden State sometimes doesn’t get enough respect in rankings that are formulated with a heavy dose of location quotients, which artificially level the rankings playing field.
In BF’s rankings, population is a demographic that should be factored into growth potential and workforce development. The states that rise to the top of our rankings leaderboards are measured by their performance.
It’s easy to be dazzled by rising stars in emerging growth sectors, but consistent high-level performance should never be overlooked. And when that excellence spans two centuries, attention must be paid.
In the 21st century, thriving biotechnology hubs have been established in more than a dozen states. But if you took a time machine back to the second half of the last century looking for biotech leaders, you’d be directed to three: California, New Jersey and Massachusetts.
What hasn’t changed in more than 50 years is this: CA, NJ and MA are the top three, respectively, in Biotechnology Strength.
California is the birthplace of the U.S. biotechnology industry and home to a large share of the industry. At its zenith as a biotech powerhouse in the first decade of this century, nearly half of national R&D spending on biotechnology was in CA and the Golden State generated more than half of the nation’s biotech revenues.
According to the California Life Sciences Association’s 2019 annual report, there were 3,418 life sciences companies in the state in 2018—169 more than the previous year; more than 1,570 are pharmaceutical and biotechnology companies, up 117 from 2017. The other 1,848 companies produce medical devices, diagnostic tests, biofuels, research tools and other biotech products and services.
The value of National Institutes of Health (NIH) grants awarded to California increased in 2018 to $3.9 billion; life sciences venture capital investment amounted to $7.6 billion. The CLSA report said the biotech/life sciences sector in California directly employs 311,226 people, with biotech innovators spanning the state from San Francisco to San Diego.
California’s strength in research, as well as its large share of the U.S. biotech industry, will continue to make it one of the most attractive places to form biotech companies. The state’s strong research capacity, long tradition of venture capital investment and high quality labor pool provide all of the essentials for a steadily growing economy.
What is known in the Garden State as the “brain belt” in central New Jersey resides the heart of the pharmaceuticals industry and a thriving biotech hub.
NJ’s biotech/pharma sector has made an impressive rebound from the dark days of the Great Recession, when it suffered several defections (most notably the Swiss pharma giant Hoffman-Laroche, which moved most of its operation to California in 2009).
Since mid-2017, NJ has rapidly expanded its innovation ecosystem for biotechnology with the establishment of a network of biotech incubators closely collaborating with the Garden States top universities. A good example is the Incubator at North Brunswick, which is one of the more significant incubation facilities in the nation dedicated to life sciences and biotechnology companies, a 46,000 square-foot facility in a 50-acre research park in North Brunswick in the heart of NJ’s “Research Corridor.”
NJ is home to 13 of the world’s 20 largest pharmaceutical, medical technology and diagnostics companies, including Bristol-Myers Squibb, Johnson and Johnson, Merck, Novartis, Pfizer, Sanofi, Novo Nordisk, Bayer Healthcare, Daiichi Sankyo and more. There are more than 400 biotechnology companies in NJ, including Amicus Therapeutics, Celgene Corporation, Chromocell, ContraVir Pharmaceuticals, Genmab and PTC Therapeutics. According to Choose New Jersey, the Garden State has the highest concentration of scientists and engineers in the U.S.
NJ also is home to some of the world’s largest clinical research organizations, including Covance, PharmaTrials, InVentiv Health Clinical and Frontage Clinical Services, and major healthcare foundations, including the Robert Wood Johnson Foundation, Christopher and Dana Reeve Foundation, Henry H. Kessler Foundation and The Healthcare Foundation of New Jersey.
World-renowned biotech research institutions in NJ include the Advanced Research at Cancer Institute of NJ, Stem Cell Institute of New Jersey, W.M. Keck Center for Collaborative Neuroscience, Center for Advanced Biotechnology and Medicine (CABM), Biotechnology Center for Agriculture and the Environment, Waksman Institute and the Center for Advanced Food Technology.
TEXAS: UNDISPUTED CHAMP OF EXPORTS
We’ve said it before and it bears repeating: Texas is the heavyweight king of exports. Actually, we’ve been repeating that for every one of the past 15 years.
The Lone Star State shipped $330.5 billion worth of goods around the world in 2019. That dollar amount represents a 4.6 percent increase from 2018 to 2019 and a 42.7 percent increase since 2016.
The value of exports from Texas is estimated to equal 20.1 percent of the U.S. total for exports in 2019.
Based on statistics from the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA), Texas’ exported products represent 18.3 percent of the state’s GDP in 2019.
IDAHO IS GETTING CROWDED
When we think of population growth, the SunBelt usually comes to mind, states like Texas, which is now home to nearly 30 million folks (second only in population to California, which is about to top 40 million) and Florida (number three in population at 23 million and counting, blowing past NY’s 19.4 million). We also think about demographics in states like Utah, which has the largest contingent of people under the age of 30.
Well it’s time to think about Idaho. Population growth is measured in percentages, and Idaho’s growth rate of more than four percent is outpacing the other 49 states. For a lot of people looking for a new place to live, the Gem State is a shiny object they can’t resist.
Why are people flocking to Idaho?
One reason is that they’re leaving more densely populated states (hint: there’s an exodus from a West Coast state with 40 million people in it) in search of wide open spaces.
Here’s a statistic that says it all: Idaho’s population of 1.75 million is smaller than more than a dozen U.S. cities, but its land mass of approximately 200,000 square miles is half the size of California. So yes, Idaho is getting crowded, but it’s got plenty of space left for newcomers who want to trade Palm Trees for potato fields.
But since we’re always averse to odious comparisons, let’s stop talking about people leaving other states and say a few words about the incredible quality of life and opportunity that awaits you if you follow the same route that Lewis and Clark took and you stop along the way (they ended up in Oregon) in Idaho.
The natural splendor of Idaho is known to all, but you might be surprised to learn that Boise is developing a reputation as a millennial magnet with a low cost of living and a growing high-tech hub. Millennials quickly fall in love with Boise’s dynamic downtown, its flourishing coffee scene and friendly, laid-back vibe. Idaho’s capital is a hip city with small-town coziness (pop. 229,000) just miles away from unmatched scenic splendor and every type of outdoor recreation you can imagine.
So it’s no surprise that Boise saw an 18.2 percent increase in population between 2010 and 2018.
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