< Previous8 G R E A T E R P H O E N I X : T HE C O N N E C T E D P L AC Ehen Deloitte announced recently that it would invest $34 million to develop a 100,000-sq.-ft. technology solutions complex employing 1,500 phase-1 jobs in Gilbert, the news served as the latest propellent for a Greater Phoenix economy that is firing on all cylinders.With an annual GDP of more than $240 billion, ranking 16th in the country, the 4.7-million-resident Greater Phoenix Metropolitan Statistical Area (MSA) has become one of the most attractive business destinations in the country, according to experts who study business migration patterns for a living.“Phoenix ranks number 17 in the nation in tech talent growth and number 16 best for young professionals,” says Jim Rounds, president of Rounds Consulting Group in Tempe. “Arizona became a top 5 state for population growth, job growth and income growth, and Greater Phoenix is the main reason why. Greater Phoenix is three-fourths of the state’s economy.”Because of this growth, and the underlying factors fueling it, Rounds says he is “much more bullish on the region than [he] was last year or five years ago.” What changed? “The economic numbers B USIN E S S C L IM A T E O V E R V I E WA pro-business climate, highly educated workforce and reasonable costs serve as magnets.by R O N S TA R N E RWWhy Businesses are Choosing Greater PhoenixG R E A T E R P H O E N I X : T HE C O N N E C T E D P L AC E 9• A best-in-class community college system churns out hundreds of thousands of students every year who form the lifeblood of the local economy.• Greater Phoenix has become a breeding ground for new technology in fields such as wearable devices, the Internet of Things, blockchain technology, FinTech and autonomous vehicles.• Greater Phoenix is close to many major markets. Trucks can reach San Diego in 5.5 hours, Los Angeles in 5.75 hours, Las Vegas in 4.75 hours, Albuquerque in 6.75 look better,” he says, “and the U.S. economy is stronger now.”Several factors drive Rounds’ confidence in Greater Phoenix:• Greater Phoenix is a desirable location that continues to attract a ton of in-migration.• Public policy in Arizona, a right-to-work state, is tilted in favor of new business creation and profitability.• Higher education, anchored by America’s largest public university, Arizona State University, provides the third-largest labor pool in the West and a supply of highly educated labor that employers covet.Phoenix at duskImage: Getty Images10 G R E A T E R P H O E N I X : T HE C O N N E C T E D P L AC Ehours, El Paso in 6 hours, and Mexico in 3.5 hours.• Greater Phoenix is a true meritocracy where anyone with talent and work ethic can succeed.“Not just one thing, but dozens of things drive our economy,” says Rounds. “We have changed our policy to encourage economic growth. You have to do this repeatedly before you get the benefits, and Phoenix is reaping the rewards of these pro-growth policy changes.”Elliott Pollack, CEO of consulting firm Elliott D. Pollack & Company in Scottsdale, agrees. “The Greater Phoenix economy is doing extremely well. This is the strongest it’s been in over 12 years,” he says. “Our jobless rate of 3.4 percent is the lowest we’ve had since 2007, and our 3 percent GDP growth rate is the largest we’ve experienced since 2006, making Phoenix the seventh-fastest-growing market in the U.S.”More than 90 percent of all new jobs in Arizona originate in Greater Phoenix, says Pollack. “Our growth is very balanced,” he notes. “Housing permits are up 14 percent and will exceed 20,000 new permits this year. Our median home price is $250,000, up 8.7 percent from a year ago.”With a population that’s growing 1.8 percent a year, Greater Phoenix is becoming the destination of choice for employers’ most coveted demographic: highly educated, highly skilled millennials. “Maricopa County had the largest numeric increase of any U.S. county last year, as 89,000 people moved here,” Pollack says. “That makes us the second-fastest-growing metro in the country. This has been an exceptional year, and I expect 2019 to be a good year too.”Several fundamental factors underpin this growth, he adds. Image courtesy of Visit PhoenixG R E A T E R P H O E N I X : T HE C O N N E C T E D P L AC E 11“People vote with their feet, and companies vote by moving their offices to Phoenix,” he says. “It’s not like other states where companies are treated like pariahs. The Greater Phoenix Economic Council and the Arizona Commerce Authority go to bat for you. The whole environment has become very favorable for businesses and their workers.”He adds that Greater Phoenix “is one of those places, like Dallas and Denver, that wants to grow. It has a pro-business climate and a reasonable cost of living. Housing is very affordable. It is well located. It is easy to get anywhere from here.”The market is also well positioned to grow in the future, he notes. The industries that are growing the fastest — health care services, FinTech, professional and business services, leisure and hospitality — are inherent strengths in Greater Phoenix. “As long as we attract millennials,” he says, “we will attract the companies that need them as workers.”Finally, Pollack says, the region’s trump card is its unparalleled quality of life. “The overall vibrance of our communities has just exploded,” he says. “Places like downtown Tempe, Chandler, Gilbert, Glendale, downtown Scottsdale and downtown Phoenix have become thriving centers of commerce, retail and entertainment. They are destinations of choice.”Not even a trade war will slow down Greater Phoenix, he adds. “Even if there are trade issues with Canada and Mexico, I think they will have only minor effects on Greater Phoenix. It will be a blip and then things will pick back up,” he says. “Our economy is based on a lot more than international trade. This is a true success story.” “Greater Phoenix is one of those places, like Dallas and Denver, that wants to grow. It has a pro-business climate and a reasonable cost of living.”— Elliott Pollack, CEO, Elliott D. Pollack & Company, Scottsdale12 G R E A T E R P H O E N I X : T HE C O N N E C T E D P L AC EI N T ER V I E W WI T H L E A D ER S H IPreater Phoenix is winning the race for industry because it is winning the race for talent.That, in a nutshell, says Chris Camacho, president and CEO of the Greater Phoenix Economic Council, is why companies continue to invest their capital to set up shop and do business in Phoenix and its surrounding communities. The fact that Arizona has made it easier to do business in the region is a plus.In a recent interview, Camacho discussed the greatest business assets of Greater Phoenix and what his area is doing to attract even more jobs and industry.What are your region’s greatest selling points to businesses?CAMACHO: We hit an all-time high in prospect activity this past year. This was the most active quarter we have seen in our history. A handful of reasons explain this. First, we are one of the fastest-growing markets in the U.S. with over 100,000 people moving here each year. We maintain a very affordable cost of living while having our cities and counties invest heavily in modern infrastructure like transportation and education. We are becoming the nerve center capital of corporate services in the United States. Companies in New York City, Chicago and Los Angeles are looking for locations that have limited or no natural disasters, a great operating environment, and a wealth of talent and scalability. Greater Phoenix is one of the fastest-growing nerve center hubs today. Companies are selecting Greater Phoenix for their IT units, data centers, security operations centers, etc. All of these come at scale. It is all about labor and affordability.What business climate improvements has Arizona made in the last two years?CAMACHO: Arizona has continued to modernize our economic development tool kit. Quality Jobs Tax Credits are more usable for companies. Firstly, we have heavily focused on our regulatory framework. It has allowed new programs to evolve. We have created America’s first regulatory sandbox program. FinTech, blockchain and crypto firms can come to Arizona to test and Gby R O N S TA R N E RIllustration: GettyImagesGPEC’s leader explains why tech giants gravitate to the region.The Great Talent migrationG R E A T E R P H O E N I X : T HE C O N N E C T E D P L AC E 13innovate their new product delivery for up to two years. Many are looking at us for setting up the testing of their new FinTech products. Secondly, we have been to London, Singapore, Dubai, etc. We have begun to establish reciprocity agreements. Firms can test in their home country and here.Thirdly, we passed HB 2191, recapitalizing the state’s angel investor capital tax credit. It provides a tax credit to investors to support our startup ecosystem. Up to 30 percent state tax credit can be earned by investing in Arizona enterprises. Fourthly, Gov. Ducey eliminated over 600 regulations this past year. His goal is to provide certainty on the business regulation side and provide efficiency in streamlining state government. In short, we are keeping taxes competitive, investing in education and ensuring political certainty. What have been some of Greater Phoenix’s biggest economic development wins of the past year?CAMACHO: Deloitte announced an information and IT center in Gilbert. They are creating 1,500 jobs at an average wage of $95,000 per employee in a 100,000-sq.-ft. office project. USAA did another expansion of 700 technology jobs here in 150,000 sq. ft. in a consolidated Phoenix campus. Benchmark Electronics, which does white-label Internet of Things work in defense and aerospace in design engineering and electronics support, moved its headquarters from Texas to Arizona in October of 2017.Union Bank announced a major cybersecurity operation of 785 jobs in Tempe near Arizona State University. Chronos Telecom expanded its R&D center in Scottsdale for cybersecurity. Some 42 new companies expanded or relocated here in the past year, representing almost 6 million sq. ft. of real estate and more than 8,600 new jobs. These capital investments are projected to create 15,000 to 18,000 new jobs for the region over three years.Most of these new jobs will pay an average annual wage exceeding $80,000 — or almost double the county median. We are no longer the call center capital of the West; we are now the mission critical center of the West. The key ingredient is talent. A change in site selection measures is now heavily weighted to the talent coming out of our schools. ASU has over 22,000 engineering students today and 100,000 students total. ASU is the largest public university system in the U.S. We have 196,000 community college students too. We have scalability of labor. As national unemployment dips below 4 percent, we can produce labor unlike most places around the country.What do you plan to focus on in the year ahead?CAMACHO: We will continue to support these companies that are headquartered in high-tech and highly regulated areas in the strategic optimization process and finding high value locations. About 23 percent of our pipeline is in California. International prospects are one-fourth of our pipeline. They are coming from London, the Netherlands, Germany, Singapore, Taiwan, Canada and Mexico too. We will focus on technology growth companies that are looking for labor locations they can scale.What is the global brand identity of Greater Phoenix?CAMACHO: We shifted it to The Connected Place. It has morphed significantly. We talked about the pivot a year ago. With Intel going into autonomous vehicles and AMEX moving into blockchain, Greater Phoenix is at the pinnacle of the inflection point of blockchain, cryptocurrency, autonomous vehicles, wearable technologies, etc. We are seeing many startups in the connected device world.“Arizona has historically been known for attracting retirees, and yet Greater Phoenix is the fifth-youngest market in the U.S. with an average age of 36.”— Chris Camacho, President & CEO, Greater Phoenix Economic CouncilHow did Greater Phoenix become such a hotbed of talent and R&D for autonomous vehicles and blockchain technology?CAMACHO: We have had a fair amount of policy adoption in blockchain. Smart contracts can be litigated in Arizona. We met with a lot of companies in this field. We are seeing impactful change with integration of blockchain. A lot of IoT tech is being tested in Greater Phoenix. We are becoming a hub in the U.S. for these technologies. In the driverless cars arena, we are building an innovation institute of sorts focused on testing. This will be created to validate the safety and testing of these vehicles. What is your message to business executives in other parts of the U.S. and abroad?CAMACHO: Being such a migratory market, the most recent movers said that this is an easy place to live and an easy place to be new. We are the fifth-largest city in America. This is a meritocracy. New businesses and new people can plug in quickly. Greater Phoenix is becoming a melting pot of the U.S.Arizona has historically been known for attracting retirees, and yet Greater Phoenix is the fifth-youngest market in the U.S. with an average age of 36. We still have retirement communities, but for the most part, we offer a very young labor force. We are building world-class communities. People have choices. Our city centers are becoming unique and hip. We are so different from the Greater Phoenix of 20 years ago. This has created quite an eclectic cultural scene. We have seen radical change over the last seven years, and we will see a lot more change in the years to come. G R E A T E R P H O E N I X : T HE C O N N E C T E D P L AC E 15Greater Phoenix by the NumbersS T A T I S T I C A L P R O FI L ECompany City Type New/Expansion Sector Investment (US$ millions)Intel Corporation Chandler MF Exp. - Facility Electronics 7,000Niagara Bottling, LLC Mesa MF Exp. - Facility Chemicals & Plastics 76Benchmark Electronics, Inc. Tempe HQ New Electronics 35.5Chewy, Inc. Goodyear DW New Consumer Products 30 Top Golf USA Inc. Glendale OF Exp. - Facility Business & Financial Services 29.6Bank of the West Tempe OF New Business & Financial Services 25 Northern Trust Corporation Tempe OF Exp. - Facility Business & Financial Services 24.7B. Braun of America Inc. Phoenix DW New Life Sciences 24.1 Zummit Plastics Inc. Phoenix HQ New Chemicals & Plastics 23.5 Versum Materials, Inc. Tempe HQ Exp. - Facility Chemicals & Plastics 21 Charles Schwab & Co., Inc. Phoenix OF Exp. - Facility Business & Financial Services 9Sunstream Technology, Inc. Gilbert MF New Machinery, Equipment & Construction 8.7 Empereon Marketing, LLC Phoenix OF Exp. - Facility Business & Financial Services 8.3 Advisor Group, Inc. Phoenix HQ Exp. - Facility Business & Financial Services 8.2 Mesker Openings Group Phoenix MF Exp. - Facility Consumer Products 7.8 Symantec Corporation Tempe CC New Business & Financial Services 7.3 NPL Construction Co. Phoenix HQ New Machinery, Equipment & Construction 6Upgrade, Inc. Phoenix CC New Business & Financial Services 5 Comprehensive Health Mgmt, Inc. Phoenix HQ New Business & Financial Services 4.9 Cognizant Technology Solutions Corp. Phoenix OF Exp. - Facility IT & Communications 4.6 Top 20 Projects in 2017 by Capital InvestmentFast FactsSource: ACS 2017 1-Year Estimates, 2010 CensusPopulation(11th in the U.S.): 4.7MMedian age of resident: 36Area (sq. mi.): 14,598 Elevation (ft.): 1,100Source: Conway Analytics16 G R E A T E R P H O E N I X : T HE C O N N E C T E D P L AC E 2017 2018 2019 2020 2021 2022Retail Sales ($ mil) 70,941 75,258 78,862 82,743 86,523 90,601 % Chg 5.5% 6.1% 4.8% 4.9% 4.6% 4.7%Total Non-farmEmployment (thousands) 2,034 2,097 2,158 2,214 2,261 2,303 % Chg 2.8% 3.1% 2.9% 2.6% 2.1% 1.9%Population (thousands), July 1st estimates 4,649 4,732 4,819 4,905 4,993 5,081 % Chg 2.2% 1.8% 1.8% 1.8% 1.8% 1.8%Residential Building 29,312 32,760 33,475 33,449 33,490 33,560Permits (units) % Chg 2.6% 11.8% 2.2% -0.1% 0.1% 0.2%Phoenix-Mesa-Scottsdale MSA ForecastProjects by SectorProjects by TypeSource: The University of Arizona89,000 people moved to Phoenix/Maricopa County in 2017 — Second fastest growing MSA in U.S.Office 21Manufacturing 19Headquarters 11Distribution 8Call Center 3Business & Financial Services 19Electronics 7Machinery, Equipment & Const. 6IT & Communications 5Consumer Products 4Chemicals & Plastics 4Paper, Printing & Packaging 3Other 11Source: Conway AnalyticsG R E A T E R P H O E N I X : T HE C O N N E C T E D P L AC E 17Projected New Jobs by SectorProjected Average Wage of New JobNew Building ExpansionAdvanced Business & Financial ServicesAdvanced Business & Financial ServicesTotal3,663,237 sq. ft.Phoenix Forward Sectors2,227,937 sq. ft.Other Sectors1,435,300 sq. ft.BioscienceBioscienceHealthcareHealthcareTransportation & LogisticsTransportation & LogisticsOther SectorsOther Sectors0 500 1,000 1,500 2,000 2,500 3,000 3,5000 20,000 40,000 60,000 80,000 100,000Source: Greater Phoenix Chamber Business Outreach Summary, July 2017 – June 20188,256Total Projected New Jobs: Next >