– November 2012

Site Selection tally of automotive sector facility projects beyond NAFTA since January 2011 shows China, India, the U.K. and Brazil leading the way, followed by the Slovak Republic, Germany and Romania. The rankings line up nearly one for one with KPMG’s “Competitive Alternatives” rankings of national business tax climates, released in October. But there are a lot more factors than tax schemes at work.

Each November in Dusseldorf, Germany, more than 135,000 visitors from more than 100 countries attend Medica, the world’s largest gathering for the medical industry. That sea of participants includes an array of state agencies from the U.S. seeking new business for existing companies and recruiting investment from firms based around the globe.

Honda likes Ohio. Since November 2010, the company has announced investments totaling more than US$500 million in operations at its two auto plants and two powertrain plants in the state. Ron Lietzke, a spokesman for Honda in the U.S., says the investment is about strengthening the companies operations in Ohio and implementing new technologies.

NASA’s space program contributed to countless inventions, including the lithium battery, the artificial heart pump and even the cordless vacuum. It also helped to demonstrate America’s technological prowess to the world — an element that contributes in building the U.S.

How can investment promotion agencies differentiate themselves from their competitors? What tools can they use — should they use — to achieve this goal? What are considered best practices today in communicating to potential investors an area’s strategic value? These were among the topics covered in a September Red Hot Locations event in London, the FDI International Marketing & Communications Seminar.

Airbus adds Mobile, Ala., to its global network of passenger aircraft assembly plants, adding velocity to the northern Gulf Coast’s aerospace sector. On July 2, 2012 Airbus announced that the Brookley Aeroplex on Mobile Bay would be the site of the European aerospace giant’s newest final assembly plant — and its first in the United States — for production of the A320 family of passenger aircraft.

To accurately measure an incentive’s results, states need to consider whether businesses receiving benefits would have made the same investments had the tax break not existed. When the Minnesota Legislative Auditor’s office studied the state’s Job Opportunity Building Zones program, for example, it found that about 80 percent of the jobs created by companies receiving incentives would have been created even without the help.

As the global economy struggles to recover from the worst recession in recent memory, persistent high unemployment and low investment have begun to redefine the way economic development policy makers think about employment goals. The simple but harsh math of economic development starts with a basic premise: There can be no job growth before first retaining existing employment.

When it comes to physically demarcated free trade zones, look to Singapore or Hong Kong as shining examples. Or look to eastern China, where boundaried zones have proliferated. The Republic of Korea’s internal competition among zones has led to several excellent models such as the Incheon Free Economic Zone and the Gwangyang Free Economic Zone. Vietnam’s burgeoning roster of zones is also engaged in healthy competition. The argument for special economic zones (or SEZs) is hard to refute.

North Carolina’s combination of work-force availability and skill sets of interest to employers, proactive business-development agencies, logistics assets and higher education infrastructure helped it reclaim Site Selection’s Top Business Climate spot from rival Texas