Advanced manufacturing is growing in importance across the United States as regions compete to attract companies that are using sophisticated, innovative technologies in the production process.
Experts see advanced manufacturing as integral to a potential manufacturing renaissance in the U.S., making it an invaluable category for regions to emphasize for their long-term economic health. Advanced manufacturing, which is widely viewed as an area that is inherently resilient, adaptable, and efficient, has grown in scope and prominence in industries such as clean energy, biotechnology/pharma, automotive, aerospace, and semiconductor production. Government investments in advanced manufacturing—especially in clean energy and semiconductors recently—are helping to fuel growth in the field.
“We’re really seeing a lot of activity across that advanced manufacturing ecosystem,” said Matt Hurlbutt, President and CEO, Greater Rochester Enterprise in New York.
In 2020, Mazda Toyota Manufacturing USA chose Huntsville, AL as the site of its new venture, building a workforce of up to 4,000 to produce as many as 300,000 vehicles annually. (Photo: Alabama Department of Commerce)
Regions that are finding success developing new advanced manufacturing facilities point to some areas of emphasis prized by companies in site selection, though every case is unique.
“Companies and site location consultants all have their own scoring cards and their secret sauces for exactly how they score things, and it depends on their different approach, even if it’s the same industry,” said Jennifer Wakefield, President and CEO for the Greater Richmond Partnership in Virginia. “No two manufacturing operations are going to score things exactly the same.”
Workforce Continues To Reign
In a tight, highly competitive labor market, there might not be a more critical criteria to the site selection process than the makeup of a region’s workforce.
“For most companies considering a growth project, the key consideration is the available workforce,” said Ellen McNair, Secretary of the Alabama Department of Commerce. “After all, if they can’t assemble a workforce with the skills they need, their project is doomed to failure.”
Access to workers is simply foundational, Wakefield said.
“With any type of project, whether it’s manufacturing or some other industry, the first thing that any company executive or site location consultant asks when they’re trying to weigh the different criteria is, ‘Do they have the workers that I need in that region?” Wakefield said. “And will they have the workers in the future for the operation that we’re going to have?’”
In January 2024, Creation Technologies held the ribbon-cutting for its 150,000-square-foot facility in the Greater Rochester, NY region. The Boston-based company specializes in electronic contract manufacturing. (Rendering: Creation Technologies – Rochester)
The answer to those questions often starts with the region’s institutions that attract and develop talent. For instance, the Rochester, NY area benefits from having 19 colleges and universities in the region, and the greater metro area ranks third in college degrees per capita and No. 1 for degrees in STEM fields, according to the U.S. Department of Education. Meanwhile, Wakefield said there are 1.7 million higher education students within 150 miles of Richmond, VA. That includes the schools in the Community College Workforce Alliance, a partnership in which community colleges create custom programs for companies to meet specific labor needs.
In addition to higher education, specialized training can be integral, said Debi Durham, Director of the Iowa Economic Development Authority (IEDA), who noted that Iowa has one of the highest number of apprenticeship programs in the country, including both high school apprenticeship programs and career academies.
McNair said Alabama aims to provide customized workforce development solutions for growing companies.
“AIDT, our primary workforce development agency, has worked with companies such as Airbus, auto manufacturers including Mercedes-Benz and Hyundai, and the shipbuilder Austal, among many others,” McNair said. “AIDT has dedicated job training centers at these companies and others. It also operates the unique Alabama Robotics Technology Park training complex, where it is now building a $30 million facility for training related to electric vehicles and emerging technologies.”
Catalina Valencia, Executive Director of Business Development for the Minnesota Department of Employment and Economic Development, noted that workforce considerations go beyond attracting workers to keeping them. That’s where standard of living—where Minnesota ranks highly—is an important factor, as education, health care, housing, culture and entertainment, and overall quality of life come into focus.
Durham agreed that companies zero in on a community’s long-term appeal to a potential workforce. For that reason, she said, Iowa manages economic development and community development “in tandem.”
Cost-Effective Business Environment
Companies will consider the costs of various specific elements, but ultimately the overall cost of doing business in a region will be under the microscope—and incentives that regions offer can come into play in that calculation.
“Communities and sites compete hard to win growth projects, so the process can be very competitive,” McNair said. “Communities will sometimes offer free or discounted land, infrastructure improvements, tax breaks, and other perks. As we have seen on many occasions, states will craft high-dollar incentive packages for large-scale projects.”
Operating in Richmond, VA for nearly 50 years, the Weidmüller Group is expanding in Chesterfield County with a new plant for engineering, production, and warehousing for its industrial connectivity products. (Photo: Weidmüller, Virginia Economic Development Partnership)
State policies can give one location the advantage over another. For instance, Greater Richmond Partnership’s Wakefield said state policies were one of the key drivers for the LEGO Group deciding to choose the Richmond area for a new $1 billion manufacturing facility. In particular, Virginia’s Clean Air Act played a vital role, she said.
“They wanted to make sure that any manufacturing operation that they brought to the United States was something that could be carbon neutral by a specified timeframe and meet all of these requirements for sustainability,” Wakefield said. “So that was a key reason why they looked at Virginia.”
Companies that prioritize environmental, social and governance (ESG) will weigh that in their decisions.
Durham said Iowa is the top state in the country for renewable energy and can help companies that are pursuing aggressive carbon neutral goals. The IEDA has an energy office that works with companies to help them reduce their carbon footprint and reach their sustainability goals, she said.
Valencia said that in Minnesota, “We at the state level invest heavily in making sure that we are reaching out to the many different population segments across our state. And that we have metrics within our different state organizations to make sure that inclusivity is central to the work we do.”
Sites ‘Ready To Go’
Durham said the “inventory question” is foremost in the minds of many companies searching for a site.
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“Do you have the land and is it ready to go? Which is why we, for the last 10-plus years, have been investing pretty extensively in certified sites so that we can move at the speed of business,” Durham said. “And we’ve seen lately that we have some searches that come to us by way of site selectors that are even saying that they won’t even look at anything but a certified site due to short timelines.”
Similarly, Hurlbutt said Greater Rochester Enterprise is seeing a lot of interest in the ability to invest and get new equipment online quickly.
Minnesota’s Valencia said, “Time to market is becoming very important for companies.”
That means companies will often evaluate the readiness of the site and the ready availability of a trained workforce to help it hit the ground running. It also will want to weigh timelines for permitting and possible local opposition to a site, Valencia said.
“They are looking at the readiness of these locations from a utility perspective, from an infrastructure perspective and from a workforce perspective,” Valencia said.
Nu-Tek, a Minnesota-based manufacturer that develops and manufactures animal-free peptones and protein hydrolysates for biotechnology and pharmaceutical companies, decided on the City of Austin, MN for its new plant location. (Photo: Minnesota Department of Employment & Economic Development)
Durham said Iowa’s certified sites—designed to be developed quickly—range from 25 acres up to approximately 1,650 acres. Anticipated resources are prepared accordingly. For instance, the larger sites will have robust sewer, water, and utility capacity ready. Iowa is looking to continue to bolster its certified site program with a goal of having at least one site in each of its 99 counties.
But advanced manufacturing projects can have challenging needs.
“We’re seeing an intensity in terms of the demand for resources—be it power, be it water, be it wastewater, be it access to critical infrastructure, rail, or deep-water ports,” Valencia said. “Companies are looking for sites that have the capacity to offer all of these things together.”
History, Support, And Seeing The Whole Picture
Advanced manufacturers will carefully weigh the stability of the overall business climate in a region, including the policies being developed at the state level, Wakefield said.
Iowa’s 4,100 manufacturers produce the range from food products and medical devices to aerospace products and construction machinery. Iowa-based Plas-Tech Tooling focuses on production machining of plastic and metal parts. (Photo: Plas-Tech Tooling, Garner, Iowa)
Manufacturers also will weigh the availability of supportive partners in a region, according to Hurlbutt. The history of a region can play a factor for some companies. For instance, Hurlbutt points to Rochester’s legacy of being home to innovative companies, such as Kodak and GM, as helping to attract other companies.
“I think the key to our success, and what we really strive for, is connectivity,” Hurlbutt said. “We’re very well-supported by leading elected officials, by our community leadership, colleges, universities and our leading businesses. And that’s what make tick. We’ve got great access to infrastructure, to natural resources and to people, but it’s that ability to connect with a business leader in one phone call that really helps us create success for those who are interested in investing in the region—both for existing companies as well as those who are new to the region.”
When making the ultimate decision among multiple competitive options and comparing their pluses and minuses, McNair said the choice often “comes down to a numbers game—where is it most economical to place this operation?”
“That may or may not end up being the best measure to predict success,” McNair said. “Beyond a sterile economic analysis, corporate decision-makers should pay close attention to the track record of companies that locate in a certain state. Do they get the support they need in terms of workforce development to succeed? Do they choose to repeatedly expand their operations there? Those factors can be very revealing.”
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