Development Counsellors International 461 Park Avenue South, New York, NY 10016 Phone: (212) 725-0707 Fax: (212) 725-2254 E-mail: [email protected]/Website: www.aboutdci.com A VIEW FROM CORPORATE AMERICA THIRD EDITION FINAL REPORT SEPTEMBER 2002 A View from Corporate America Winning Strategies in the Economic Development Marketing Game WINNING STRATEGIES IN THE ECONOMIC DEVELOPMENT MARKETING GAME TABLE OF CONTENTS List of Tables.………………………………………………….………….. ii Executive Summary ……………………………..…………………..…..... 1 I. Introduction and Methodology ……………………………………. 3 II. Comparative Rating of Information Sources Influencing Perceptions of Business Climates ……………………………….… 4 III. Comparative Rating of Marketing Techniques ……. ……………… 8 IV. The Internet’s Role In Corporate Site Selection ……….………….. 10 V. Regional Ranking of Business Climates ……..……………………. 13 VI. Favorability Rating of U.S. States ..………………………….…… 15 VII. Favorability Perceptions of Business Climate in Europe………….. 19 VIII. Perceptions of Economic Development Organizations: A Comparative View ………….………………………………….. 22 IX. Facility Most Likely to Be Involved in the Next Site Decision …………….………………………………….. 24 X. Demographic Profile of Respondents ……………………………. 26 XI. A Word About DCI…………..…..……………………………….. 27 Appendix A Questionnaire/Cover Letter Appendix B Summary of U.S. Business Climate Favorability Appendix C Summary of European Business Climate Favorability Appendix D Open-ended Responses i A View from Corporate America Winning Strategies in the Economic Development Marketing Game LIST OF TABLES Page 2002 Survey Table 1: LEADING INFORMATION SOURCES ON BUSINESS CLIMATE 5 Table 2: MOST EFFECTIVE MARKETING TECHNIQUES 8 Table 3: MOST USEFUL FEATURES OF AN ECONOMIC DEVELOPMENT ORGANIZATION’S WEBSITE 12 Table 4: PERCEIVED BUSINESS CLIMATES OF U.S. REGIONS 13 Table 5: OVERALL IMPRESSIONS OF ECONOMIC DEVELOPMENT ORGANIZATIONS 22 Table 6: NEXT CHOICE FOR CORPORATE FACILITY CHANGE 24 2002 v. 1999 v. 1996 Comparison Table A: COMPARATIVE INFORMATION SOURCES 6 Table B: COMPARATIVE MARKETING TECHNIQUES 9 Table C: MOST FAVORABLE BUSINESS CLIMATE 16 Table D: LEAST FAVORABLE BUSINESS CLIMATE 18 Table E: MOST FAVORABLE EUROPEAN BUSINESS CLIMATE 20 Table F: LEAST FAVORABLE EUROPEAN BUSINESS CLIMATE 21 Table G: COMPARATIVE CHOICES FOR FACILITY CHANGES 25 Charts Chart 1: USE OF THE INTERNET DURING SITE LOCATION SEARCHES 10 Chart 2: LIKELIHOOD THAT AN ECONOMIC DEVELOPMENT ORGANIZATION’S WEBSITE WOULD BE VISITED DURING NEXT SITE SEARCH 10 ii A View from Corporate America Winning Strategies in the Economic Development Marketing Game Chart 3: PERCEIVED BUSINESS CLIMATE COMPARISON 14 Chart 4: RATING COMPARISON: CORPORATE IMPRESSIONS OF ECONOMIC DEVELOPMENT ORGANIZATIONS 23 iii A View from Corporate America Winning Strategies in the Economic Development Marketing Game EXECUTIVE SUMMARY Development Counsellors International (DCI) conducted a third survey of corporate executives with site location responsibilities to measure trends in the most effective strategies and techniques in economic development marketing. The seminal report “Winning Strategies in the Economic Development Marketing Game” was presented in 1996, and was based on the responses of 173 senior executives (chief executive officers, presidents, vice presidents and corporate real estate executives) from U.S. companies. A follow-up report, “Prospects for the New Millennium: Winning Strategies in the Economic Development Marketing Game” was completed in 1999 and included business leaders from the United States and Europe. In the current study, “A View from Corporate America: Winning Strategies in the Economic Development Marketing Game,” only U.S. executives are included. The following summary is based on the aggregate responses of 287 business leaders. As in the previous study, the respondents represent senior level executives from companies with over $100 million in annual gross revenue. Key findings: 1. For the first time, “articles in newspapers & magazines” surpassed “dialogue with industry peers,” as the leading source of information influencing the executives’ perceptions of a state or region’s business climate. “Business travel” was selected as the third most influential source of information. 2. “Planned visits to corporate executives,” “public relations/ publicity,” and “hosting special events” received the highest ratings among all economic development marketing tools. 3. Forty percent of respondents indicated a strong likelihood that they would use an economic development organization’s website in their next site location search. The executives named “information on available incentives,” “demographic information” and “directory of available buildings & sites” as the most useful features of an economic development organization’s website. 4. The South continued to be rated as the region with the most favorable business climate in the United States. The Pacific region experienced a significant drop in the business climate rating. 5. When asked to list the most favorable business climates among the 50 states, Texas, North Carolina and South Carolina received the highest tally (in order of selection). 1 A View from Corporate America Winning Strategies in the Economic Development Marketing Game 6. The least favorable rating of business climates among the U.S. states was given to California, New York, and Massachusetts. 7. The United Kingdom was perceived as having the most favorable business climate among 17 countries in Western Europe, followed by Ireland and Germany. 8. Overall, France was considered to have the least favorable business climate in Europe, followed by Germany (as already noted, also selected among the best business climates in Europe) and Italy. 9. Sixty-three percent of the respondents indicated having worked with economic development organizations. These organizations were viewed favorably by the majority of respondents. 10. “Information/assistance in obtaining financial/tax incentives” was identified as the most important service provided by economic development groups. This was followed by “general information about the community,” “information/assistance with workforce/training resources,” and “contact/coordination with local authorities/ elimination of “red tape.” 11. When asked to identify the most likely candidate for their company’s next move or expansion, “manufacturing/production plant,” was the most common response. This was followed by “corporate, division or regional headquarters,” “distribution center” and “regional sales office or service center.” When compared with the 1999 survey, the current findings reflect a strong shift away from regional sales or service facilities. 2 A View from Corporate America Winning Strategies in the Economic Development Marketing Game I INTRODUCTION AND METHODOLOGY In 1996 and then subsequently in 1999, Development Counsellors International (DCI) conducted surveys of corporate executives to determine the “customer’s perspective” on the most effective strategies and techniques in economic development marketing. In 2002, DCI directed a follow-up survey to determine changes in the perceptions of corporate leaders in the United States. A random selection of 2091 companies with annual revenues of $100+ million was selected. The survey targeted executives with direct site selection responsibilities and was heavily weighted toward the following business titles: “Chief Executive Officer,” “President,” “Chief Financial Officer,” and “Vice President.” In addition, 158 U.S.-based site selection consultants were included in the survey sample. Questionnaires were accompanied by a personalized letter from DCI’s President, Andrew Levine, and were mailed to the survey audience. Completed questionnaires were returned to DCI for processing. A total of 287 completed surveys were received. All surveys were edited for completeness and the responses to open- ended questions were coded. A copy of the questionnaire and cover letter can be found in Appendix A. Every sample survey is subject to sample error, that is, the amount the actual data would be expected to vary from results that would be obtained if the entire population, as defined, were interviewed. The maximum expected sampling error for this study of 287 corporate executives is ±5.5% at a 95% confidence level. That is, if 100 samples were drawn from the same population of businesses, 95 times out of 100, the responses would vary 5.5 percentage points from what would normally be obtained if a complete census of the same businesses were conducted. It is important to note this is a study of perceptions. A perception is an attitude, belief or impression and not necessarily a reflection of reality. Business executives have certain identifiable opinions and beliefs about doing business in the United States and Europe. Some of these perceptions may be accurate and some may be genuine misperceptions. 3 A View from Corporate America Winning Strategies in the Economic Development Marketing Game II COMPARATIVE RATING OF INFORMATION SOURCES INFLUENCING PERCEPTIONS OF BUSINESS CLIMATES In all three studies, the respondents were asked to select the “three leading sources of information” influencing their perceptions of a state or region’s business climate. The 1996 study had 12 possible sources – articles in newspapers and magazines, business travel, dialogue with industry peers, direct mail, meetings with economic development groups, national surveys, personal travel, print advertising, TV/radio advertising, TV/radio newscasts/shows, word