3rd Quarter 2016 Hotline
by Joe A. Hollingsworth, Jr.
When one focuses all their time on developing products and delivering them to customers, it can be tempting to take government policy as an unchangeable impediment or enhancement to business. But, governments are competing for talent, investments and risk initiatives in a new global environment.
Stark reminders of this fact are events like Brexit, where thousands of corporate plans were scuttled immediately by a change in policy. For companies that located facilities in Britain to serve both the U.K. and European populations, that assumption of free flow of goods may no longer be valid. Similarly, the passing of ACA in the United States created sudden and continuing uncertainty that has curtailed hiring and investment by businesses facing a new, burdensome and ever-changing regulation.
More immediately relevant for the manufacturing and industrial businesses we serve is how government policies shape location decisions. Businesses are growingly attuned to the long-term affects of government policies have on their taxation, regulatory enforcement, and future workforces. This information is all available instantly on Google so these decisions are never in a vacuum.
Whether it be poor fiscal positions that might lead to massive tax increases in the future (e.g., Chicago) or underinvestment in education that could impair the ability to retain and attract top talent (e.g. Detroit), understanding the policy context is an important heuristic in any location decision. More and more, even a past history of erratic policy decisions at the state or local level can remove a particular location from consideration; with the size of investment in a particular location, businesses understand how costly a mistake can be. With all the economic uncertainty, decision-makers don’t want to layer on political uncertainty because in the end businesses hate variables.
Municipalities, states, and even countries need to understand they are competing for investments and talent and should understand the signals they are transmitting to business decision-makers. From success stories like Ireland and Singapore to horror stories like Russia or Brazil, the resulting differences in economic growth can be enormous, both in current years but also in decades to come as companies hesitate to make big investments in unstable regulatory or political environments.
Watershed moments like Brexit put the effect of policies on business decisions in the headlines, but more and more government living in their own protected bubble with an endless stream of highbrow overblown do-good causes affect the decisions of new risk and investments. The results of these decisions “play out” in our news every day, often locking entire populations into almost hopeless financial challenges largely beyond their control.
Often, the power of our vote is the only restraining tool available to allow hope, risk and individual success to thrive.
“Our lowest freight costs nationwide are in Amherst, Virginia.”
We didn’t expect to hear that on our recent visit to Glad Manufacturing. However, unexpected bonuses are becoming the norm in this community nestled in Virginia’s Blue Ridge Mountains. Located near Lynchburg and Charlottesville at a hub of American conveying and material handling expertise, with over 45,000 university students and exceptional workforce development programs, the region rivals any for advanced manufacturing and modern logistics resources. Bucking common wisdom, Amherst’s location at a four lane divided highway puts it at the hub of a transportation network leading to several interstates, rather than being along just one.
Amherst and The Hollingsworth Companies have partnered to provide new industrial facilities at the Brockman Business and Industrial Park. Pre-permitting and an execution plan assure that industrial buildings can be ready in as little as six months, with flexible financial terms to lease or purchase. A prototypical building will feature wide column spacing, clear heights of over 30 feet, laser leveled high strength industrial floors, and energy efficient lighting systems.
Communities like Amherst are the reason that household names like J. Crew and Glad Manufacturing call the region home. And, we have a sneaking feeling that they have discovered a lot more than lower freight costs.