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ook closely — there’s a new luster on Site Selection‘s Governor’s Cup this year, a gloss that began taking shape last fall, when a new set of competition criteria came into being. After all, the successful systems in place in the business world are those that are maintained and refined as necessary to ensure peak performance. Based on internal analysis of the Governor’s Cup competition and input from respected parties in the state economic development arena, the editors of Site Selection decided to refine the process by which the winning state — Illinois this year — is chosen. The result is a mechanism that levels the playing field between heavily populated, industrial states and states with fewer population centers but a healthy run of new or expanded facility projects to their credit.
The Governor’s Cup Methodology
and Data Sources Information in the charts in the cover story — and in the Top Metros, Top Industries and Global Facilities articles — is derived from data stored in Site Selection‘s New Plant Database (NPD), the most exhaustive source of corporate location data available. NPD contains information on more than 110,000 corporate location projects dating from 1989, including manufacturing, distribution, office, R&D, headquarters and other facility types. A broad pool of data sources supplies NPD throughout the year. More than 1,000 worldwide state/provincial, local and regional reporting teams are surveyed for data on new facilities and expansions. In addition, we gather data from online searches, news clippings, press releases and direct telephone contact with expanding companies. NPD focuses on new corporate location projects with a significant economic impact. Site Selection does not track government projects, schools or medical facilities. To be included for analysis, new facilities and expansions must meet one of three criteria: (1) involve a capital investment of at least $1 million; (2) create at least 50 new jobs or (3) add at least 20,000 sq. ft. (1,858 sq. m.) of new floor area. For more information on NPD or the Governor’s Cup, contact Mark Arend at (770) 325-3438 or mark.arend@conway.com. -Ed. |
All 50 U.S. governors and their top economic development officials were sent a letter in November 2001 alerting them to the new competition program. Feedback from the economic development community has been overwhelmingly positive. In short, rather than reward a state for simply having the most new or expanded facilities recorded in Site Selection‘s New Plant Database, states are ranked according to nine additional criteria, making 10 in all, each of which counts 10 percent towards the state’s ultimate score. The numbers in the chart showing the Top 10 slots are points, not new or expanded facilities. By virtue of some ties, 14 states made it into the winner’s circle in 2001.
The 10 criteria are:
- Total new and expanded facilities per one million population in 2001
- Total capital investment in new and expanded facilities per one million population in 2001
- Total new jobs created at new and expanded facilities per one million population in 2001
- Total actual number of new and expanded facilities in 2001
- Percentage growth in new and expanded facilities from 2000 to 2001
- Three-year growth average (1999 through 2001) in new and expanded facilities
- Ranking in Site Selection‘s annual business climate survey
- Number of top 100 metros in the annual ranking of top metros
- Number of top 100 small towns in the annual ranking of small towns
- Number of 100-plus job projects per one million population in 2001
The inclusion of several per capita criteria makes for a more balanced competition, one that in this case has South Dakota, Mississippi and Kentucky giving such states as Virginia, New York and Michigan a run for their money. Still, in the end, The Land of Lincoln emerged to claim the Governor’s Cup as a just reward for robust economic development activity from Chicagoland to the juncture of the Ohio and Mississippi Rivers. Illinois ranked first in three of the 10 criteria categories — total capital investment in new and expanded facilities per million population, total new jobs created per million population and number of top 100 small towns in the annual rankings.
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Illinois has a compelling story to tell, one that comes from the governor’s putting a commitment to economic development and a healthy business climate at the top of his agenda. “It’s an honor for Illinois to be named by Site Selection magazine as the top state in America for business development in 2001,” says Gov. George H. Ryan. “Site Selection‘s 2001 state rankings clearly show that Illinois’ efforts to attract new businesses and jobs have succeeded. I’m proud of the ongoing partnership between the public and private sector in improving our business climate and believe the success we have achieved is the result of that teamwork.
“I believe it is important to make sure that state government fosters a healthier business climate,” the governor continues. “I’ve been a strong advocate of investing in our schools, improving our technology assets and rebuilding our infrastructure. Those investments mean that the workers of the future will be better prepared to compete in the global economy, and that Illinois businesses have the ability to move their products and provide their services in the most efficient manner possible.”
A strong economy in the late 1990s made it possible for the state to invest US$12 billion over five years, through the Illinois FIRST program, in its aging transportation infrastructure and make capital improvements in schools and communities throughout Illinois. Illinois FIRST funds are used for capital-related expenses to offset the costs of site development. In its first investment in a corporate project under the program, the state committed up to $12 million for improvements to a site for Solo Cup in 1999, a 1,000-job project that would have gone to Indiana.
“A lot of the change in our success rate occurred with this governor, and it had to do with his economic development strategy,” says Pam McDonough, director of the Illinois Dept. of Commerce and Community Affairs. “One of the first things we did was pass the Illinois EDGE — Economic Development for a Growing Economy — Tax Credit. Without that on our books, we had a 17 percent success rate when competing with another state for a corporate location project. When we put EDGE in our package, it made us a winner. Our success rate went up to 50 to 60 percent.”
Gov. Ryan maintains that the most important investment made so far in his tenure is to commit 51 percent of all new revenue to education and workforce training. “By making sure our schools are first in line for funding, we ensure that our education system has the resources it needs to be effective,” he stresses. “There is nothing more important to businesses than access to a highly trained and educated workforce. In Illinois, we believe education and job training should always be a top priority for state government.”
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