In my last post, I described how the COVID pandemic has irrevocably changed the practice of corporate site selection and economic development. This has also been fostered by large business media outlets telling many new stories of how COVID has disrupted and enabled new ways to replace traditional business practices.
For example, Fast Company (approximately 20 million page views each month) published the story “How this engineering company found its new production plant over Zoom.” Highlights of the article include:
- The Swedish biotech business Sandvik Materials Technology was looking to expand operations in the USA, but the pandemic hindered a traditional airplane-and-meetings driven location evaluation process
- The company rewrote their corporate location expansion strategy to make the entire site selection process occur online
- Virtual tours and negotiations were all handled through Zoom meetings and data was gathered online
- CRE and EDOs that were not able to work and provide tours virtually were disqualified from consideration
- The company announced their decision to open their new location in Tucson, Arizona in September 2020, with plans to be fully operational in Q1 2021
- The lead site selection person from Sandvik Materials Technology never – during any point in his life, including during the location decision process - set foot in Tucson, ever
- All future global expansion projects for the company will be replicated using this same all-virtual site selection process, “global pandemic or not”
Within the specialization of corporate site selection consultants, the digital transformation of corporate site selection is viewed as a permanent change.
Dean Whittaker, President of Whittaker Associates asked Rick Weddle, President and CEO of the Site Selectors Guild about the adaptation of site selection due to the COVID pandemic. Weddle responded saying, “One of the interesting things is the question of how site locators and economic developers work together, and one aspect of that is the absence of face-to-face meetings. The second prediction [of the Site Selectors Guild] for 2021 is that hybrid engagement is the new normal, meaning that you will see all of the interface be a mix of online/digital zoom calls and a mix at the backend of the project face-to-face or boots on the ground, due diligence.
"What we’ve found is a tremendous amount of the work can be done digitally. We’re seeing economic developers become very sophisticated in their use of Zoom rooms to communicate and respond to RFIs. We’re seeing drone footage for site locators to be able to visit sites virtually."
Weddle explains that "We’re seeing, in many ways - I’ll be careful how I say this - but in many ways that work – analysis, data collection, review work – has become more effective and more efficient because it’s more real time.” Weddle continues saying, “…by-in-large it’s going to be a hybrid operation for a long time to come and I don’t think we will lose some of that virtual aspect. I think we’ll stay virtual.”
As can be seen both from the corporate real estate or site selection consultant perspective, hybridity or purely digital site selection is here to stay. This has significant implications for communities and economic development organizations.
The transition toward digital site selection started in the late 1990s. By the early 2000s communities were competing for business location expansions, but they were in a competitive race in which EDOs/IPAs were being evaluated online and being selected or eliminated from consideration before they even knew they were in the competition. The more recent digital transformation of site selection due to the COVID pandemic has created a new normal of digital site selection in which most – if not all – of the competition for a corporate location decision occurs online.
This material and permanent change in the site selection practice of corporate real estate means that EDOs and IPAs that are not digitally capable of delivering all of the new requirements for digital site selection assistance will suffer as they are eliminated from expansion consideration.
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