The Baton Rouge Business Report examined the challenges facing the Baton Rouge area in an excellent article published this week. The city has lost several corporations such as Amedysis, the Shaw Group, and Albermarle. BRBR asks whether cities such as Baton Rouge can even compete against "first-tier" cities. Keep in mind the city has a major university downtown and an major airport that is one hour away. This article should be required reading for all business and political leaders in the Jackson metro area. Some excerpts:
In mid-August, Albemarle Corp. confirmed what had been rumored for months: that it was relocating its corporate headquarters from Baton Rouge to Charlotte, North Carolina, where the company promised to create 120 new jobs and invest $12.9 million by the end of 2016.Airports. Did someone mention airports? Don't think for one second an airport is an economic driver. One problem with the Jackson airport is too many people in this area see it as a honeypot for themselves and not as a tool used to advance the Jackson metro area. BRBR tackles this issue:
The announcement came as a blow to leaders at Louisiana Economic Development and the Baton Rouge Area Chamber, who had worked closely together all summer to come up with an incentive package to keep the company here. The deal they had crafted was remarkable, both in its size and scope...
More troubling, second- and third-tier cities like Baton Rouge across the country are losing corporate headquarters to a handful of major markets, where wealth and power are increasingly concentrated. These big cities have the two key ingredients that are critical in the competitive battles for the corporate office: access to talent and international assets, which is a fancy way of saying lots of highly educated professionals and a major airport.
Can Baton Rouge and Louisiana compete for these headquarters, and is it even worth trying? Or is it good enough to be home to a company’s regional base of operations? These questions carry deep implications for the future of economic development in south Louisiana.....
As a result of the recent departures, Baton Rouge no longer boasts the headquarters of any Fortune 1000 companies, and the state has just three: Entergy in New Orleans, Pool Corp. in Covington and CenturyLink in Monroe.
If it’s any consolation, Baton Rouge isn’t alone. Global corporations across the country are relocating from the mid-sized cities where, in some cases, they have been based for decades, to large urban areas with international airports and diverse talent pools.
These big cities are typically more expensive and don’t always offer the best incentive packages. But they don’t have to. Companies are flocking to them anyway because it’s increasingly difficult to manage corporate operations in smaller markets, Sweeney says.
“It’s not that those smaller cities are bad,” he says. “But the companies have evolved, and it’s difficult for them to continue doing business in those smaller markets.”....
Why is it difficult doing business in a smaller city, and what do Charlotte and Nashville have that Baton Rouge doesn’t?
The answer to both questions is talent. Smaller markets don’t have enough of it. Larger markets—and even Charlotte and Nashville—do.
“There is a huge push for talent,” says consultant Didi Caldwell with the site selection firm Global Location Strategies. “It’s at the top of everyone’s list. Everyone is asking, ‘Where can we recruit and retain the best talent?’”....
If talent is No. 1 on the list of must-haves for a corporate headquarters site, proximity to a major airport is No. 2. In today’s global economy, corporate executives want—and even expect—to be able to fly to Europe or Asia with relative ease and efficiency.
Sweeney talks to clients about it all the time. When he’s drawing up a list of potential new sites for a company, cities that aren’t near an international or, at least, a hub airport don’t even make the long list, much less the short list, of finalists.
“We screen cities on all sorts of things, but the one we see the most is international air service,” he says. “If a company has to have it, they have to have it and they’re not willing to compromise.”...
Part of the problem is that cost-conscious airlines are cutting back on service in general, not adding it. Market size is also a problem. It’s difficult to get airlines to add more service to a market like Baton Rouge because the numbers, from the airline’s standpoint, don’t make sense. It costs an airline roughly $10 million to add a single new daily flight to this market, which means the airline is going to demand that the flight is full.
As a way of offsetting costs, the airport offers incentive packages that waive landing fees and provide marketing assistance. But federal regulations prohibit the airport from outright offering incentives in the form of passenger guarantees, like the one LED offered Albemarle. Only third parties can legally do that.... Rest of the article.
Meanwhile, local businessmen in our area yelp for contracts from the airport yet don't say anything about how to use the airport to improve the community or the state. There is much more to read and it is all worth reading. One challenge Baton Rouge does not face that the Jackson metro area does: A major city and a bunch of neighboring cities fighting each other over the same pie. Baton Rouge is similar in size to the Jackson area. However, the media and community leaders are talking about how to attract and keep corporations while Jackson and the burbs fight over a Costcos and Best Buys.
Note: Keep the comments focused on the post. The usual crap over Jackson v. Madison won't get approved unless it is substantive. That also goes for the Whole Foods jokes. They were funny the first 100 times.
26 comments:
It would be wonderful if it was as easy in the Jackson metro as the simple apples-to-apples comparison you seem to be alluding as available for employment.
Talent pool is first. Then comes the lengthy list ranging, in no certain order, from churches, cultural attractions, access to rail/port/air and that sort of infrastructure, schools, shopping, the arts and on and on.
The man of the household no longer rules the roost when it comes to these considerations. The old adage "If momma ain't happy...." is the driver now.
Thirty years ago Greenville, MS had thirty to fifty corporations and major businesses employing upwards of 200-400 people each. Yet, the ladies had to drive to Memphis or New Orleans to get their satisfaction fix, and occasionally to Atlanta. Now all of those businesses are gone. And it can NOT be blamed on the economy. It's all about ancillary amenities as well as the business necessities of infrastructure and labor pool.
So, what was Greenville missing that caused the decline? Did the air field disappear? Nope. Still got the same (decaying) place out there with two parallel 7000 foot runways. Did the Port disappear? Nope. Still there. And its improved. Did rail and highway disappear? Nope. Land? Still there. River? still where it was. And while the Delta certainly doesn't have a wealth of available computer tech talent, there are the same number of people in the labor pool within the two hundred mile radius. One hospital closed down and the other is shaky, the burn center folded and airlines avoid the place. Looks like it boils down to whether momma is happy.
Is momma happy with a 98% minority public school system with crumbling physical plants and notoriously poor management? Is momma happy with a lack of entertainment resources? Is momma happy with boarded up store fronts and bulldozed malls? At one time, the town was the third largest in the state, running behind only Meridian and Jackson. Now it's an isolated and mostly abandoned dump. They can no longer attract momma, as if they EVER could.
Obviously I know there are differences.
Greenville? Seriously?
So, what was Greenville missing that caused the decline?
Uncle Bennie is working hard in Washington to make it all better.
Oh, wait........
Did Amedisys leave BR? I knew they moved some corporate officers up to Nashville, and was wise to do so, but as I recall they left 90+ percent of the staff in Red Stick.
@7:45; What, pray tell, do you find wrong with discussing Greenville. Or does every discussion have to involve Jackson. You obviously know nothing about that sizeable region and the importance, historically, of that little city. Name another one you'd like to discuss. We'll wait.......
Think that 7:07 AM should have mentioned the absolutely devastating effect NAFTA has had on the Greenvilles of this country.
Living in Greenville in 1974 was remarkable. The Russian grain purchases of 1973 had made the farmers rich.The number of tow/barge manufacturers on Ferguson was in the dozens.Southern flew into the airport.Doe's was packed every night. The Carters had visitors from all over the world. La recherche du temps perdu.A very good example to study.
Many young professionals do not get married until they are around 30 years old. The metro area has few places where they would want to live. They want apartments within walkable distance to restaurants bars etc. and want to feel safe. Not much available like that here.
While it's warm and fuzzy to recall Hodding Carter having visitors in town and 35 people packed into Doe's Eat Place, Greenville, then a large (by MS standards) bustling city (during the 70s and 80s, was about much more than funeral fans on Hodding's veranda, tales of Teddy Roosevelt, Lanterns on The Levee and mint juleps.
While a handful of these businesses (listed below) might have succumbed to NAFTA, not all of them did by a long shot. And they were all ramped at full employment for a number of years. Then it all went to hell.
U.S.Gypsum Interiors
Milford Rivet
Tartan Tube – later Wolverine Tube
Johnson Driver
Reed – Joseph
Modern Farms
Lucy Grain Handling Systems
Vlasic Pickle
Fruit of the Loom – FOL was 1,000 jobs in 1992
World Class Athletics – made the designs mid field and end zones for all major football games
Wicker Machine
Sporting World MFG.
Comet Delta Rice Mill
Pacific International Rice Mill
Cargill
Producers Rice mill
Mebane Packaging
Mead Westvaco
La Z Boy
Metcalf Spike
Chico San Rice Cakes
Boeing Military Airplane Company
American General Aircraft
Superior Powder Coating
Reliable Electric Utility Products
Southern Fasteners
Hagar Hinge
Mosow Mfg
National Lock
Delta Metal Forming
Schwinn Bicycle
Uncle Bens Foods
Southern Bandsaw
Moeller Manufacturing
Atkins Saw - Nicholson File
Delta Pine Distribution
Textron – Uncle Ben Distribution
Indian Head MFG Co.
Purina foods
Agribrands
Cargill
Amware Pallet Company
APAC Company Mississippi
Collumn Tool
Farmers Grain Terminal
Caldwell Culvert
Engine Rebuilders
Mississippi Marine – now the largest private employer in Washington County
Gamill Head Manufacturing
Haley Marine Gear
Nichols Steel and Propeller Co.
Piper Industries
Presto Tap
Greenville Fasteners
Mosow Fasteners
Cleaver Brooks
Chicago Mill and Lumber
Greenville Metal Works
Bungee Corp
Casio Distribution and Warehouse – over 2.5 million sq ft.
Mobility Works Washington County
Davis Walker Steel & Wire
Superior Boat – towboat Mfg.
New South Marine – towboat Mfg.
Theurer Trailer Mfg. Sold to Pines Trailer and then renamed Pines and later Great Dane Trailer. – closed
The great majority of business on this list are closed and gone. A few, like Schwinn moved overseas. Some, like Vlasic, went to California and other states.
The point is, there was a time in this bustling city of 45,000 a man or woman with half a desire to work could find a job within two days. Now the place has given way to the gang culture, transfer payments are the largest source of income and the school system is several notches worse than JPS, if that's possible.
And don't forget the title of this thread is smaller towns. Jackson is an anomaly in so many ways. It's a miniature Birmingham and almost a Detroit clone in some ways. There's nothing else to compare Jackson to in this state or region.
"“Over the past five years, we have surveyed thousands and thousands of small business owners across the country, asking the question, ‘what do you need most to help your business thrive?’ The overwhelming response that we get is not necessarily what you’d expect. Small business owners don’t call for more tax breaks or fewer workplace standards. They call for more customers."
http://www.nakedcapitalism.com/2015/10/how-competitive-tax-and-incentive-policies-hurt-small-u-s-businesses.html
10:37 - I knew it was bad but until you listed the companies no longer in operation in Greenville, the horrific damage done to our economy by free traders, NAFTA, greenies, and government agencies seeking to make all things equal is not apparent. Now look at the numbers released today by the government showing we have less people in the work force than at any time since 1977. Remember folks what was going on in 1977? Jimmy Carter, oil embargo , interest rates at 20%, on and on. The upside for Jimmy is that he is no longer the worst president in U.S. History. He gets to hand that baton off in 16 months...assuming our economy makes it that long.
And their all scratching their butt and picking nose wondering why Trump is leading the pack.
NAFTA has been an unmitigated disaster for Mississippi. Trent Lott, Bennie Thompson and Gene Taylor were the only Congressional representatives from our state to vote against it. The Republicans have been talking out of their asses for over a decade about wanting to fix it as all our jobs went south to Mexico but only Trump is talking about actually doing something.
Well thanks to Obama the gas prices are just about what they were in 1977..of course Obama isn't responsible for the gas just like carter wasn't totally responsible for the late 70's. Saudi Arabia, OPEC and the like continue to screw us.
Get out of NAFTA- that's the reason our state keeps spinning it's economic wheels. Why start a plant here in the USA when you can pay pesos instead of dollars
Unfortunately, one can't really compare Jackson to Baton Rouge, or Shreveport for that matter, due to Jackson's ever dwindling population. Mississippi is unique in that it is the only state that does not have at least one major city. Jackson is only a "major" city in terms of cities in the state, but is a third tier city if it was within any other state.
Gotdam, the people from Greenville are garrulous. That place is as dead as a hammer. Has been for 20 years. The Greenville expats who fled the area and populated the metro are a haughty bunch that are best avoided, unless you want to listen to boring tales of the grand ole days down by the levee. If they were half as smart as they portray, they could have solved Greenville's problems.
Great topic, but disappointingly no one is talking about the number one driver - talent. There's no significant population of educated talent here, and few companies can convince talent to move here. The only educated people here are doctors, lawyers, and college professors, none of which create companies that spur growth. We need engineers and entrepreneurs, but have nothing to offer to convince them to live in this state.
Like DC, Jackson limps along because it is a capital city, not because it has an independent economy. Sadly, like DC, Jackson would cease to exist if the functions of government were to move somewhere else. Jackson is the poster city for our "new" economy; hospitals, schools, government agencies, and retail shops. Note what is missing? Industry. Only Nissan qualifies in that category, and guess where it located...not Jackson!
The only thing that can fix this is a fundamental change in leadership starting at the top...Trump or someone that shares his views on trade, immigration, taxes, and INDUSTRY.
If someone had told me 8 years ago I would now be supporting Trump I would have suggested they be committed to an institution for the criminally insane. What a difference 8 years makes!
2:20 - Amen. Why would you bring a company to a state that is riven with racial division(that sword cuts both ways folks - not just white voters), has a pathetic public education system(again that sword cuts both ways folks- not just white voters that perpetuate the problem), and has a tax structure that punishes business to maintain a ridiculous state funded entitlement system that perpetuates the state run entitlement system! There is profit in poverty and many take full advantage. Don't ask me for solutions...I have none...or none that those benefiting from the entitlement system would accept. It truly is a self licking ice cream cone.
You people saying that JPS is the bottom of the barrel really don't know what you're talking about do you? JPS is NOT the worst of the worst in public schools in Mississippi. Go take a look at the Yazoo City Public School District, or some of the school districts up in the Delta. You really don't know what truly horrible public schools look like or function like do you?
Pittpanther,
No talent?
Look, Jackson is 2 years behind everyone, like the rest of MS. We have plenty of talent but future innovators and business developers choose law or medicine because those are the things that will make them individually wealthy in this state, in this economy.
Most people choose a path to their own personal success. That path is dependent upon what's available. You can't ride the Autobahn in Alabama. Availability is dependent upon numerous things. The biggest hinderance to availability is most certainly government red tape. In the past 30 years we have preached that everyone should get a college education and become a professional service oriented provider. We have jumped the middle class shark and forced families and individuals into mounting debt because we require college education for vocational jobs.
We have the largest amount of individuals not working... ever. Yet we have the largest amount of federal income tax dollars coming in.... with the largest amount of federal debt ever. See a trend? Socialism does not work. In the short term it might benefit a few disadvantaged, but life does not make everyone millionaires.
To Jackson: Jackson isn't a city. It's a metro area and has been for years. I am a white male that was born and raised in Jackson and never left. I've owned several businesses..... none of which has ever had a Jackson address. Until the black individuals within the city quit race-baiting and look to grow the metro area together with the "white" areas of the burbs and the white burbs realize that a hollow tree is never going to survive like a tree with a strong heart.... we will continue to suffer in our ignorance.
This metro area has never successfully supported metro entertainment. We are too divisive. I would have loved for the Farish street project to have become a success. I don't care if I, personally, would have ever chosen to be entertained there. But the success would be beneficial. Two lakes is a success waiting to happen, but too many black individuals are worried that white individuals might benefit.
Folks, we are culturally different, but that difference doesn't mean we have to succeed one over the other. This type of success is not zero sum. Both (and most) types of culture can succeed if individuals are not worried about that the success of another means the failure of theirs.
I agree with PittPanther about the lack of talent but I'd add that the Mississippi-born talent that does become educated flees the state.
Think of some of the people you grew up with who went to college, earned their degrees and left for Atlanta, Texas, North Carolina, and elsewhere. I know of many people from my small hometown who went to school and never had a thought of returning home. The brain drain, if you will.
Now, all that is left are the drug addicts, the state-dependents, and those with the "big turd in a small yard" mentality.
Cities can recover, but it takes leadership : http://www.brookings.edu/~/media/research/files/papers/2008/9/17-chattanooga-eichenthal-windeknecht/200809_chattanooga
I witnessed this turn around, but I do not believe this can happen in Jackson...no leadership of the caliber required. The first requirement is to admit you have a problem. The kumbahya crowd thinks they can hold hands and sing about it.
A viable city with a credible industrial development program does NOT attempt to recruit industries that hire talent not present in the community. Nor do they sit around hoping some business from up north will suddenly plop down in their midst and start recruiting for people that can't be found.
Your labor force is your labor force. The pool is the pool. You recruit industry based on what you have to offer, period. Who gives a rats ass what the labor pool is in San Diego or Boston or Atlanta or Baton Rouge?
When the labor pool and community amenities meet the needs/demands of prospective and current industry, you have stability and growth. Not before and not unless. How difficult is that to understand?
1:28: I'm aware of no group of fleeing, Greenville ex-pats who have populated the Metro. Please confirm.
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