< Previous66 JANUARY 2024 SITE SELECTION million inhabitants are included. The infrastructure (for example international airport, digital hub, highways) should be available or currently under development, and other companies should already conduct software and/or support activities there. As a result, the mature, expensive and competitive countries in Western or Northern Europe and Asia are excluded from this overview. Also excluded are the tighter markets in Central and Southern Europe. These markets may still offer interesting opportunities, but they are no longer out of the box or emerging. ‘Out of the Box’ Locations in the Americas In North America, Canada is a mature market for both software and support. Toronto, Montréal, Vancouver, Calgary and Québec City especially are mature locations. So Halifax, a software hub on the east coast of Canada, is selected. It is a smaller market, with low risk and a high quality of life. The cost of living and salaries are on the higher end compared to other global locations, but real estate costs are attractive. The United States is a large and mature market both for software and support activities. There are 57 metropolitan areas with over 1 million inhabitants. Oklahoma City is picked as there is still room to develop. Although labor costs are on the higher end compared to the other locations, they are attractive from a U.S. onshore perspective. Plus, quality of life is high. Mexico is a popular U.S. nearshore location, mature for both software and support. Mexico City, Monterrey and Guadalajara are the most popular. Mexico has about 20 metropolitan areas with over 1 million inhabitants. San Luis Potosí is more out of the box, as the skills are there, but not yet the heavy labor market competition as in other Mexican locations. The costs of operations are attractive, especially from a U.S. nearshore perspective, so more software and support center activities are expected. In Latin America, Kingston, Jamaica, is a mature call center and BPO market, due to having English as the official language and being in the Eastern Standard Time zone. The city offers a favorable business environment, a well- developed infrastructure and a growing talent pool. Several multinational companies (such as Xerox, Sutherland and Scotiabank) have set up support centers in Kingston. It is only a matter of time before more international companies invest. Colombia is hot at the moment. Bogotá is chosen frequently for both software and support activities, in part due to the attractive operating costs. Medellín is regarded as an emerging location. It is a large city with 4 million inhabitants, with lower competition and more attractive labor costs and conditions compared to Bogotá. Brazil, a large software and support market, has more than 20 cities with over 1 million inhabitants. São Paulo, Rio de Janeiro, Belo Horizonte and Florianopolis are amongst the most popular destinations in Brazil. Recife is an interesting alternative, more for software than for support activities, as there are lower-cost options in a better time zone for the U.S. market. Argentina is a well-known outsourcing location, especially for software activities, mainly due to the attractive costs. As Buenos Aires is the most mature market in Argentina, a good alternative is Córdoba. It has even more attractive labor costs, but as the country is dealing with hyperinflation and exchange rate risk, it’s also a higher-risk location. Lower risk at higher costs is offered by Uruguay, where Montevideo is an interesting option. It has low risk, acceptable quality of life and there are several support centers active already (e.g. Genpact, Telus and TMF). ‘Out of the Box’ Locations in Europe, the Middle East and Africa Zagreb, Croatia is a nearshore European language hub with support center potential. Zagreb has 1.1 million inhabitants speaking many of the different European languages, low risk, an acceptable quality of life and attractive labor costs, especially compared to the much higher western and northern European salaries. In Greece, Thessaloniki is selected. The city has low risk, an attractive quality of life and attractive cost levels compared to the rest of Europe. Some larger multinationals (such as Siemens and Pfizer) have software development centers in Thessaloniki and there are several support centers (such as TaskUs and Teleperfomance) using the location’s multilingual workforce. Turkey is a large market with 10 cities exceeding 1 million inhabitants and is a mature market for both software and support activities. Most activity is focused in Istanbul, so Ankara is a promising alternative, with less competition on the labor market. Ankara has a large labor market, acceptable quality of life and an attractive cost structure. There are some software and support centers in Ankara, To qualify as out of the box, locations must be non- conventional and emerging — well- known, mature markets with intense labor competition are avoided. Oklahoma City, Oklahoma Photo: Getty Images68 JANUARY 2024 SITE SELECTION and it’s just a matter of time before more international players enter. Georgia (in Europe, not the U.S. state) is marketing itself internationally, especially for support activities. Tbilisi is an upcoming software and support hub especially for low cost European nearshore activities. ere are large call centers and a few support centers active in Tbilisi at the moment from companies such as Majorel, Teleperfomance and BDO. In North Africa, Morocco is a mature software, support and BPO market and has cities with over million inhabitants. Fès is included as there is still room to develop without strong labor market competition and cost levels are attractive, especially for European services. Another North African option is Egypt. Egypt’s potential for software and support activities is now fi nally utilized. As most investments go into Cairo, Alexandria is more out of the box. Quality of life on the Mediterranean coast is high. It has more than . million inhabitants, an attractive cost structure (junior gross salaries are below US$ per month) and limited competition on the labor market. ere are a handful of international support operations in Alexandria (such as Vodafone, IBM and Xceed), and it is just a matter of time before more international companies will follow. In Sub-Saharan Africa, Ghana is of British heritage, in the UK time zone and English is the formal language. Accra has acceptable risks and quality of life with gross monthly salaries for junior roles below US$ per month. Mainly due to the lack of modern Class A offi ce space, commercial rent is higher. e fi rst larger international support centers in Accra (e.g. Xerox and Nestle Global Business Services) are proving its potential. Finally, Kenya off ers English as a formal language along with other European languages such as French. Nairobi is a mature market for BPO but emerging for software and support, with acceptable risk and quality of life and very attractive cost levels. Microsoft in launched its fi rst Africa Development Centre (ADC) with a fi ve-year, $ million investment at two initial sites in Nairobi and Lagos, Nigeria, where the company planned to hire as many as people by . ‘Out of the Box’ Locations in Asia-Pacifi c India, a large, popular and mature software and support market, off ers no fewer than metropolitans with over million inhabitants. Digital business services fi rm Teleperformance in summer said it plans to hire as many as , in India over the next two years to bring its head count in the country to ,, and opened a -job site in Hyderabad in August. But other locations are ready too. Kolkata, West Bengal (Northeast India) has a large labor pool, English speaking skills, attractive cost levels and lower labor market competition compared to other popular Indian cities. Traditionally, West Bengal was less business oriented, but in it was identifi ed as the easiest state in which to do business in India, and multinational companies are currently building up their presence there. Also in India, but all the way south in the tropical region, is Trivandrum. e state of Kerala was also not known for its business orientation. However, the city has . million inhabitants, a nice climate, a relatively good quality of life (especially for Indian standards), acceptable risks and very attractive cost levels. e fi rst software and support centers (from Nissan and Allianz) are entering the market. China is a huge and important software and support market. ere are cities (!) with over million inhabitants. e coastal cities tend to be very expensive and competitive, so new investments now focus on more central locations. Chongqing is a good example. It has million inhabitants, medium risk levels, lower quality of life but attractive costs. e Chongqing Municipal Commission of Commerce reported in that welcomed new foreign-invested enterprises in Chongqing, a year-on-year increase of .%, with contractual foreign investment reaching nearly $. billion, a yearly increase of .%. As China is no longer used as a hub for APAC services and most companies only serve China for China, only one location in China is included in this overview. India, a large, popular and mature software and support market, off ers no fewer than 48 metropolitans with over 1 million inhabitants. Tbilisi, Georgia Photo: Getty Images Biswa Bangla Gate, Kolkata, West Bengal, India Photo: Getty Images SITE SELECTION JANUARY 2024 69 Vietnam is also a popular software market, especially Ho Chi Minh and Hanoi. Da Nang is centrally located between the two other markets, with new highways being developed, Da Nang could be an interesting upcoming software location. The Philippines is a large and popular market for U.S. support activities. A lot of American companies are trying to find “the next Philippines” as the most popular markets of Manilla and Cebu are becoming competitive. Therefore, two less mature locations in the southern part of the Philippines are interesting. Davao City, with 2.4 million inhabitants, has some BPO players active, but enough room for development for other support activities. The same goes for Metro Cagayan de Oro: It has 1.7 million inhabitants, acceptable quality of life and attractive cost levels. As a result, more international support activities are expected to land there. Last is Indonesia, an upcoming market both for software and support activities. As most attention goes to Jakarta, Surabaya is an emerging alternative. Surabaya is a port city and the country’s second logistics hub. The metropolitan area has 10 million inhabitants, with lower risk, better quality of life, lower cost and less competition on the labor market compared to Jakarta. More international companies are expected. The second and last location in Indonesia is Nusantara. Following the examples of Brazil and Malaysia, Indonesia has an ambitious project to relocate the capital city. In order to build a new Indonesia, a new government capital is being built right in the geographical center of the country, 1,250 kilometers from Jakarta and in the primary rainforest of Borneo. The new capital is to be inaugurated in August 2024. Next to the government offices, a green “new smart metropolis” is planned. As a result, Nusantara is regarded as an out-of-the-box location, especially for green software development activities. Regarding the choice of physical tech and support center locations, the world still holds many interesting out-of-the- box opportunities. All have different pros, cons, costs and conditions. Companies also have their own specific sets of criteria, needs, wants and “nice to haves.” So, finding your own sweet spot anywhere in the world is the key to long- term success. At the end of the day: If you are the preferred employer in the right location, there is no lack of talent. Josefien Glaudemans is a partner at Netherlands-based research, advisory, project management and strategy firm BCI Global. For more information visit bciglobal.com.INVESTMENT PROFILE: HARTFORD, CONNECTICUT You Can Always Go D owntown Hartford, until recent years, was bustling from nine to fi ve. Not so much when the offi ce workers headed back to the suburbs from the banks, insurance companies and other places of businesses after work. Some would stay and take in a show at e Hartford Stage Company or the XL Center arena, but then it was back to the ’burbs. at’s quickly changing. Connecticut’s capital city is becoming a magnet for companies and their employees relocating from other parts of the country, particularly for young adults preferring an urban lifestyle. “Over the past years or so, downtown has changed,” says Mike Freimuth, executive director of the Capital Region Development Authority (CRDA). “It’s evolving from just being a nine to fi ve business community to something more like an urban neighborhood. We’ve built some , housing units downtown in the last years. A lot of that is conversion of old offi ce buildings to residential uses. Some second-tier offi ce buildings needed a refresh, and a lot of them went residential.” A good example is downtown’s Allyn Street, a commercial building dating to that was converted into a mixed-used property in with apartment units, a fi tness center and community room. It’s listed on the National Register of Historic Places and is steps from dining and entertainment options. Dakota Partners LLC, based in Massachusetts, was the developer. Freimuth says downtown Hartford increasingly is seeing interest from out- of-state developers in refurbishing such properties. “People new to the area are fi nding their way downtown,” he says. “Most are to , single, and they’re not ready to invest in suburban living just yet, or they don’t want to. e city has been able to capitalize on that, and we’re doing new construction and using vacant sites. We’ve built about units on what was vacant land, and another are in the pipeline — and another or so are behind that. is is attracting national investors now where it initially was local and regional investors. ere is now demand, and Hartford’s quality of life is starting to be recognized.” As for housing costs, Freimuth says the by MARK AREND mark.arend@siteselection.com Downtown 70 JANUARY 2024 SITE SELECTION Downtown Hartford at dusk Photo courtesy of the City of Hartfordreal estate coming online is about % market rate and % aff ordable. “Price points vary, but the target is the young professionals getting started.” “In the wake of the shift to remote and hybrid work, we’ve tripled down on building residential density in and around the downtown, and the demand has stayed tremendously strong,” notes Hartford Mayor Luke Bronin. “Turning the central business district into a genuine neighborhood, rather than just a place where people commute to work, makes for a much stronger, healthier city center. And having people living in and around the city’s core / rather than just working nine to fi ve goes hand in hand with supporting and sustaining the growth of restaurants, coff ee shops, bars and retail that we’ve seen.” To the Nth Degree In , the University of Connecticut opened its UConn Hartford campus in the historic Hartford Times building that was completed in . Space in two other buildings, including the Hartford Public Library, completes the downtown campus. More than , students and nearly faculty and staff add energy to the district and proximity to Hartford’s businesses, where some of the students may one day work. e campus off ers undergraduate degree programs, six graduate programs and non-degree and certifi cate programs. Mayor Bronin: “Between the UConn Hartford campus, the School of Business, the Law School, UConn games at the XL Center, and more, UConn has an enormous impact in Hartford, and it continues to grow. at makes a big diff erence for our small businesses, our arts and culture scene, our talent pool, and just the energy that you can feel.” Similarly, the Capital campus of Connecticut State Community College has occupied fl oors in the former G. Fox department store building in downtown Hartford for the past several years. It has an enrollment of about , and off ers more than degree and certifi cate programs. ough not in downtown Hartford, other colleges and universities in the metro area include Trinity College, UConn School of Law, the University of Hartford, Central Connecticut State University, the University of St. Joseph and Tunxis Community College. Yale University in New Haven is a -minute drive south of Hartford; the University of Connecticut’s main campus is a half hour east, in Storrs. Students, residents moving into the real estate coming online in Hartford and others in search of entertainment options have several to choose from. XL Center, known as the Hartford Civic Center back when it was the home of the Hartford Whalers NHL team, is set to undergo $ million in upgrades. Other downtown venues include the Hartford Stage, the Xfi nity eatre Hartford — an outdoor arena that can accommodate , people — the Infi nity Music Hall that seats and the Bushnell Center for the Performing Arts. “Central business districts in the U.S. are becoming more arts and entertainment districts,” notes CRDA’s Freimuth. “Residential development, cultural, arts and education are as critical to downtowns’ futures as the corporate headquarters was. Downtowns must evolve, and that is happening in Hartford.” This Investment Profile was prepared under the auspices of the City of Hartford. For more information, visit www.hartfordct.gov. SITE SELECTION JANUARY 2024 71 The Bushnell Center for the Performing Arts Photo courtesy of The Bushnell A former newspaper headquarters is the home of the University of Connecticut’s downtown Hartford campus. Photo courtesy of the City of Hartfordby GARY DAUGHTERS gary.daughters@siteselection.com Connecticut STATE SPOTLIGHT 72 JANUARY 2024 SITE SELECTION W e’re a shockingly productive state,” boasts John Bourdeaux, the Atlanta transplant who leads AdvanceCT, the nonprofi t formed four years ago to recruit businesses to Connecticut and keep them there. A big part of the job, Bourdeaux says, is redirecting perceptions. us, he is quick to assert that, in , one in four aerospace components made in the United States was produced in Connecticut. is, in a slender state of . million people that does more than sell insurance. “One of the reasons I’m here is that we Venerable Connecticut may be more dynamic than you think it is. A beautiful sunset at Fayerweather Island Lighthouse in Bridgeport,Connecticut. Photo: Getty Images/ Ara Josefsson The Land of Steady Habits Rises to the Occasion “ SITE SELECTION JANUARY 2024 73 BY THE NUMBERS CONNECTICUT Higher Ed. R&D Expenditure in $000s:1,595,477 Number of NCRCs: 3,660 | Percent Improved 2022–23: 5.54% Business Tax Climate Rank Change 2023–2024: 0 Industrial power cost per kWh: $15.07 Total Rev. as Share of Total Expenses, FY 2007-21: 95.2% 2023 Workers’ Comp Index Rate: 1.64 Selected Top Projects by Capital Investment COMPANY CITY INVESTMENT $M Blueprint Partners Windsor 100 Mannkind Corp. Danbury 60 BYK USA Inc. Wallingford 47 Nanoramic Laboratories Bridgeport 47 TRUMPF Farmington 40 Source: Conway Projects Database have not told the Connecticut story,” Bourdeaux told Site Selection via video conference in early December. “ e Connecticut story is one of great innovation, tremendous opportunity and incredible assets that are available to companies of all sizes. e brand of Connecticut feels a little bit like s white picket fence. Like Greenwich. at misses the vibrancy and diversity that are here and have existed for quite some time.” at aerospace industry, for example. Far beyond Raytheon, Pratt & Whitney, Lockheed Martin and Sikorsky — all of which manufacture in Connecticut — exist scores of small suppliers, some with specifi c expertise that can reach back generations. “Connecticut’s aerospace industry,” Boudeaux says, “isn’t run by conglomerates. You’ve got small and medium-sized businesses doing incredibly precise things. We make things that no one else can make. We make them better than anyone else can do it and we’ve been innovating for hundreds of years. at’s our bread and butter. It’s where we continue to fi nd growth and investment here.” In late , that collective state skillset garnered endorsements from Hanwha, the South Korean mega manufacturer, and Nanoramic, a GM-backed battery startup, both of which announced decisions to establish signifi cant footholds in Connecticut. “ e productivity and precision of our workforce,” says Bourdeaux, “is what both Hanwha and Nanoramic are buying into.”74 JANUARY 2024 SITE SELECTION Certifi ed Sites Program Launches Occum Industrial Center in Norwich is one of the fi rst four industrial sites identifi ed as either “shovel ready” or “investment ready” under AdvanceCT’s Connecticut Certifi ed Sites Program, offi cially launched in mid- November. e name Occum, a section of Norwich, pays tribute to the surrounding region’s Mohican and Mashantucket Pequot heritage, says Kevin Brown, president and executive director of the Norwich Community Development Corporation, himself a member of the Mohican tribe. Newly marketed by CBRE, the -acre site off ers more than million buildable square feet and is zoned for buildings up to feet high. Occum’s top diff erentiator, believes Brown, is the prized access it off ers. “We are near the [-mile] midpoint of Boston and New York City, two of the biggest MSAs on the planet, and our price point is much lower than either,” Brown tells Site Selection. Right off I-, the site is serviced by municipally run utilities that off er “lower rates and fl atter command structures” to industrial users, says Brown. e productivity and precision of our workforce is what both Hanwha and Nanoramic are buying into.” — John Bourdeaux , President & CEO, AdvanceCT e productivity and precision of our workforce is Norwich is a mere 13 miles up the Thames River from New London, whose State Pier is undergoing a $300 million-plus renovation to support the nascent buildout of East Coast wind energy fields, a project recently dogged by the effects of inflation, higher interest rates and supply chain delays. “Ultimately,” says Brown, “whether it’s one day, one year, 10 years or 15 years from now, this is the supply chain for offshore wind. You can’t get much closer to New London and State Pier than us.” Sites in Bethel, Plainville and Windsor have received the AdvanceCT certification, with six more in the immediate pipeline, says Bourdeaux, and even more to come this year. The program’s recent launch, given the longstanding demand for certified industrial sites, does give rise to the question of whether Connecticut is late to the game. “It’s not like, say, rural Georgia and places like that,” says Bourdeaux, “where you can find 350 acres of unincorporated land, eyeball it, put up a transformer and run a sewer line and call it a certified site. We have to be a lot more rigorous in our evaluation. We just don’t have a whole lot of land, and we have to be very smart about it.” Connecticut, he says, has a “unique makeup.” No county structures and no unincorporated land. “It’s all owned by somebody. So, when you’re putting up a factory, you’re dealing with owners, history and all kinds of stuff. Connecticut has been here a very long time.” A Welcome Win for Bridgeport The Nanoramic project, announced in late November, would appear to fall under the heading of smart land use. An MIT spinout, the Massachusetts-based maker of advanced energy storage systems plans to build a 200-employee manufacturing site on the site of a defunct coal plant in Bridgeport, a prospect that makes it a poster child for the type of transitional energy investments being handsomely funded by Washington. The plans are backed by a $47.5 million grant under the Bipartisan Infrastructure Law, announced in conjunction with the project’s unveiling by U.S. Senators Richard Blumental and Chris Murphy and U.S. Rep. Jim Himes, all from Connecticut. Nanoramic reportedly opted for Bridgeport over sites in other states, including New York. Once an industrial powerhouse, Bridgeport has been staggered by globalization and the resulting divestment suffered by communities across the country.Next >