At their annual meeting in Savannah last week, more than 700 members of the Georgia Economic Development Association celebrated a nearly unprecedented trifecta as Georgia was declared the No. 1 state in which to do business no fewer than three times this year — by CNBC, Site Selection Magazine and, most recently, by Area Development Magazine.
Not surprisingly, statistics recently released by the governor’s office reflect that success.
“In fiscal 2014, Georgia had 374 economic development announcements reflecting more than 28,000 new jobs and $5 billion in investment,” said Jennifer Nelson of the Georgia Department of Economic Development.
Of those announcements, 69 percent were expansions of existing Georgia companies, Nelson said, speaking Thursday as part of a panel of Georgia Department of Economic Development project managers.
“And, of the new locations, 20 percent were by international companies, a statistic that continues to grow,” she said.
The announcements were particularly strong in three key sectors — aerospace, call centers and logistics and distribution.
Also interesting, Nelson said, was that more than half of the new jobs created and three-quarters of the investment generated was outside the metro Atlanta area.
Annie Baxter, whose GDED duties include leading the logistics, energy, agribusiness and food processing team of project managers, said the warehousing/distribution and food sectors are particularly strong in Georgia right now.
“We’re seeing a lot of activity and interest in those sectors,” she said.
Major drivers for food projects can vary according to the company, she said, citing Keurig Green Mountain, maker of K Cups, which recently located a manufacturing facility in Douglas County to begin production on a new cold beverage product. The plant is expected to bring 550 jobs and $337 million in investment to the area.
“For Keurig, labor was the No. 1 issue because of the very advanced nature of the manufacturing process,” she said.
With King’s Hawaiian, a national bakery that announced a major expansion in Hall County last year, it was mostly about location,” Baxter said.
Logistics count
“As with everything, moving product to its final destination is one of the largest continuing costs a company experiences. The building and land is a one-time investment, but proximity to customers is an ongoing issue,” she said.
“King’s Hawaiian needed to be closer to their customers on the East Coast.”
As the economy continues to recover, Baxter said, the team also is seeing retailers looking for larger-scale distribution centers. She urged economic developers to take advantage of the state’s centers of innovation, particularly the center for logistics, for help with attracting warehouses and distribution centers.
“Page Siplon at the center is the real expert on logistics and he’s a great resource,” she said.
Of all the factors influencing a company to expand or locate in Georgia, the panel agreed the most significant is availability of skilled employees.
“For the first time in a number of years, Area Development listed access to the workforce as the No. 1 decision-making factor for company executives, while cost of workforce — which had been No. 1 — fell to No. 3,” said Amanda Shailendra, who heads GDED’s life sciences and corporate solutions project team.
“We’re definitely seeing that across all our industry sectors.”
Baxter agreed.
“Incentives are important, but they won’t make a bad deal good,” she said. “The top three critical issues for site selectors are workforce, workforce and workforce.”
GEDA’s role
The 51-year-old Georgia Economic Development Association has refined its mission through the years while remaining focused on serving as both a resource for economic development professionals and a leadership voice on issues affecting economic development policies and regulations, said GEDA executive director and former Savannahian Kevin Shea, who took over the helm two months ago.
“Our members include community development authorities, but also chambers of commerce, utilities, railroads, lawyers, bankers, individual companies – basically anyone with a stake or an interest in bringing jobs to Georgia,” he said, adding that education and networking opportunities are among the organization’s primary goals.
To that end, GEDA holds monthly membership meetings, as well as an annual meeting and a spring workshop, offering members an array of networking and professional development opportunities.
GEDA’s record of engagement on economic development initiatives is expansive. Early on, the organization led an initiative to establish sales and use tax exemptions on industry machinery, and promoted adoption of a law supporting the development of development authorities in Georgia counties.
GEDA provided leadership support for the constitutional amendment establishing the Freeport Inventory Tax Exemption, Shea said. More recently, it supported legislation that created the OneGeorgia program and expanded the potential uses of Tax Allocation Districts.
“We also support the Savannah Harbor Expansion Project and Quick Start, both of which are vital to economic development,” he said, adding that it’s clear most all of Georgia’s 159 counties are interested in keeping existing business and recruiting new job creators.
“Our responsibility to our nearly 800 members is to refine our services to do whatever we can to make each one of them successful.”