Companies seeking new locations set their sites on education
Companies looking for new locations are spending more and more time considering areas that offer strong commitments to worker education and training. James L. Mooney, a vice-president at Landauer, a New York real estate consulting firm, directed the site selection process for the General Motors Saturn plant. ``Tennessee was compared with over 20 others [possible locations], but their commitment to intensive training was a major factor in our final decision, after many months of selecting finalists.''
``A new phenomenon is the ability of a community to show itself capable of nurturing, or `incubating,' business development,'' says Walt Plosila, chairman of the Montgomery County, Md., High Technology Council. ``That depends on what skills can be taught.'' A commitment to superior education at all levels attracts - and retains - good employees, he contends.
Technological innovations, as well as new employers moving into an area, will force blue-collar and white-collar workers to master new skills - and perhaps do it again in a few years. For some jobs, workplace retraining at five- to eight-year intervals is a possibility, says Ben Fisher, a labor relations specialist at Carnegie Mellon University.
The price tag for this training and retraining ``will be substantial,'' says Dr. David Birch, an economic development expert at the Massachusetts Institute of Technology. The cost is so high that corporations alone cannot foot the bill. Already, groups like the American Society for Training and Development insist, costs for formal worker education exceed $30 billion a year. Less-structured training programs cost even more, and the cost will increase as more workers are forced to adapt to new equipment. At the same time, between 500,000 and 600,000 workers displaced each year from ``sunset'' job slots in declining sectors of heavy industry must also be trained.
Education and training on the local level are also needed to fill gaps in the numbers of engineering and science graduates, who can help enhance competitiveness and commercialization of research and development. ``This is starting to bring about a change in the whole corporate site selection process,'' says Joseph Bagby, president of the National Association of Corporate Real Estate Executives.
Much of the training is coming from four-year and community colleges with strong adult education programs. Campuses must have a proven technological base and solid faculty. Since not every area or region has institutions capable of responding to these challenges, those that do will have an advantage.
Traditionally, states and cities offered generous tax abatements as a cornerstone of incentive packages. Special financing terms, local development bonds, and similar devices were always attractive to companies. Labor harmony and relatively low wage structures are also important issues. Access to good transportation and proximity to markets are still important. In recent years, an area's ``quality of life,'' including cultural and recreational amenities, have become more important than before.
William Pierce at the Hudson Institute suggests that ``several distinct communities'' might join their education and economic development sectors to craft training programs. ``Corporations choosing a site would be impressed by evidence of a state or community's coordination,'' he notes.
The development of the corporate site selection business can be seen in how many people are involved in it, Mr. Bagby says. The average site selection department at a large corporation included about three staff members in 1975, he notes. By 1985, the number had risen to 45, and is up to 53 today.
On the other side of the equation, government, and quasi-public development agencies, consisting of over 15,000 entities, spend an estimated $270 million to $340 million annually on education, site preparation and development, and promotion to attract companies looking for a place to expand or relocate.