vedp update · 2019-09-23 · •forbes growth prospects rank: 14th in 2010 vs. 19th in 2015 (-5...

VEDP UPDATE

September 20, 2019

1

AGENDA

Marketing & Communications Update

Business Investment Update

Site Development Initiative Update

Workforce Solutions Update

Local and Regional Economic Competitiveness Update

Overview of Initiatives to Improve Rankings

Rankings

Q&A

2

VEDP-sourced leads fiscal years 17-19

VEDP LEADS HAVE INCREASED YEAR OVER YEAR

212

306

406

2017 2018 2019

44%

33%

3

LEAD GENERATION CUMUALITIVE WEEKLY TOTALS FY19 YTD COMPARED TO FY20 YTD

1520

26

3338 39

42

4851

64

80

913

32

4548

58

72

83 84

93

102

0

20

40

60

80

100

120

7-Jul 14-Jul 21-Jul 28-Jul 4-Aug 11-Aug 18-Aug 25-Aug 1-Sep 8-Sep

FY19 FY20

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VEDP INCREASED ITS FY20 LEAD GENERATION CALENDAR OF EVENTS BY MORE THAN 40% COMPARED IN FY19

122 EVENTS COMPARED TO 85 EVENTS

CONFIDENTIAL DRAFT NOT FOR DISTRIBUTION

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AGENDA







Rankings

Q&A

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VIRGINIA ECONOMIC REVIEWQ3 2019: AMERICA’S RURAL GROWTH CHALLENGE

Economic Development Thought Leaders Q&As

▪ Panel Interview with Rural Leaders from other states

▪ Beth Macy (Author of Factory Man and Dopesick)

▪ Tom Barkin, Federal Reserve Bank of Richmond

▪ Seth Martindale, CBRE

Feature Articles

▪ Broadband – National picture and Virginia’s plan to get to ubiquitous broadband

▪ Site Development (characterization initiative)

▪ Rural Tech Centers (Initiative and examples such as the 1901 Group)

▪ QOL Feature (photo essay) on small towns in VA (e.g. Abingdon, Staunton, Lexington,

Floyd, Cape Charles, Culpeper, Sperryville)

Virginia Economic Development Stakeholder Q&A

▪ Ben Davenport

Workforce Feature

▪ Custom workforce program

International Trade Spotlight

▪ Virginia’s agriculture exports

Map

▪ Characterized Sites

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VIRGINIA ECONOMIC REVIEW Q4 2019: BIG DATA

Economic Development Thought Leaders Q&As (TENT)

▪ Health IT thought leader (Inova or Carilion)

▪ McKinsey data expert

▪ Andy Jassy, Amazon Web Services

Feature Articles

▪ Data ecosystem — Explosion of data as it relates to AI, machine learning, IoT

▪ How Virginia became the data center capital of the world

▪ QTS Virginia Beach Cable Landing Station

▪ Microsoft investment in Southside

Virginia Economic Development Stakeholder Q&A

▪ Primary option: Tom Farrell, CEO, Dominion Energy

▪ Additional option: Tad Deriso, president & CEO, Mid-Atlantic Broadband Communities

Corporation

Workforce Feature

▪ Data science at Virginia universities

International Trade Spotlight

▪ TBD

Map

▪ Data centers in Virginia

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Source: Source Text, 7pt.

11Munters, Buena Vista

WE ARE SHOOTING DRONE FOOTAGE AND CREATING VIDEOS FOR ALL OF OUR CERTIFIED SITES

O’Sullivan Films, Wnchester

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Source: Source Text, 7pt.

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VEDP AND ITS PARTNERS WILL HOST THREE FAM TOURS FOR INDUSTRY MEDIA:

▪ LIFE SCIENCES▪ RURAL IT/TECH▪ F&B PROCESSING

Canon, Newport News

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Overview

Modeled after successful programs in other states (e.g. Georgia Allies), this non-profit 501(c)3 partnership of the

Virginia Economic Development Partnership (VEDP) and the Virginia Chamber of Commerce will pool private

resources to fund programming that raises awareness about Virginia among out-of-state c-level executives and

top site selection consultants.

Activities

Programming will include opportunities to experience Virginia first-hand, participate in thought leadership events,

sponsorship of major conferences and events, and other bespoke business recruitment activities for top prospects.

Outcomes

The ultimate goal of the program is to advance and diversify Virginia’s economy, with all Virginia regions

participating in that growth.

Outcomes of the effort will include:

▪ Improvement in perception-based rankings

▪ New leads from cultivated individuals/companies

▪ Consultant and industry trade shows and events hosted in Virginia

▪ Consultant and executive visits to Virginia

IN PARTNERSHIP WITH THE VIRGINIA CHAMBER, VEDP IS LAUNCHING TEAM VIRGINIA

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AGENDA







Rankings

Q&A

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REVIEW: WHAT ARE THE OBJECTIVES OF THE ENHANCED SITE CHARACTERIZATION INITIATIVE?

▪ Improve our understanding of the current state of sites located in VA

▪ Quantify the gap between what we have and what we need (in dollars and number of sites)

▪ Expand and improve funding available for site development

▪ Assist all site development stakeholders (local / regional, utilities, state-level organizations) in making strategic investments in site development

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Ensure every region has an adequate inventory of quality sites

to support job growth

THE OPTIMAL PORTFOLIO WILL NEED TO BALANCE THREE KEY DIMENSIONS – GEOGRAPHY, SECTOR, AND SIZE

Geography

Ensure diversity in project-ready sites across multiple size

categories (e.g., 25-99, 100-499, 500-999, 1000+ acres)Size

Ensure a robust portfolio of project-ready sites that are

suitable for priority sectorsSector

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AGENDA







Rankings

Q&A

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GOALS FOR CUSTOM WORKFORCE ROLLOUT IN 2019

▪ Assembly of strong leadership team

▪ Design/buildout of an experience center for prospects

▪ Development of name/brand and marketing materials

▪ Successful kickoff of a few pilot projects

▪ Strong partnerships with VCCS and its institutions

▪ Partnership cultivation with selected 4-year institutions

BIG MEDIUM-TERM GOALS: TOP 3-5 NATIONAL RANK

IN THREE YEARS…BEST IN AMERICA IN FIVE

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AGENDA







Rankings

Q&A

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OUR EC DIVISION WILL BE ROLLING OUT A LOCAL/REGIONAL ECONOMIC COMPETITIVENESS SURVEY THIS FALL

Collect and share best practices within Virginia and the broader

economic development field while building a picture of the economic

development landscape in Virginia

▪ What goals and strategies are being pursued across the

Commonwealth

▪ What challenges (e.g., resourcing) are impacting EDOs’ ability to

drive progress?

▪ What are common trends (e.g., goals, strategies, challenges,

economic outcomes) across the Commonwealth

Objectives

What you

need to know

▪ EC Division is developing and testing a short 15-20 minute survey that

will be shared in October

▪ The results of the survey, combined with a review of the best practices

literature and select economic data, will be shared with each locality in

the spring

▪ A high-level write-ups on common trends, best practices, and

opportunities will be shared (but no locality-specific info will be shared) in

the spring

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AGENDA







Rankings

Q&A

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TOPICS FOR OUR DISCUSSION TODAY

▪ Virginia’s 10-year roller-coaster ride in business

climate rankings – how we’ve performed and why

▪ CNBC – how we got back to the top

▪ How to stay at/near the top in CNBC – and how to

get to the top in the others (e.g., Forbes)

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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

VIRGINIA’S 10-YEAR ROLLER-COASTER RIDE IN THE NATIONAL BUSINESS-CLIMATE RANKINGS

DRAFT

Source: Chief Executive magazine; CNBC; Forbes; Site Selection; VEDP analysis

VA’s biz climate rankings in 2019

• Chief Executive (13th – up 2 spots from 2018)

• CNBC (1st – up 3 spots from 2018)

• Forbes (TBD - November)

• Site Selection (TBD - November)

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VIRGINIA’S DROP IN MAJOR BUSINESS CLIMATE RANKINGS FROM 2010 TO 2015 WAS TIED TO THREE MAIN FACTORS

Economic Climate

& Growth

Perceptions of

CEOs

Business Costs

New rankings of some business costs (e.g., tax burdens on new

investment) place Virginia in a relatively negative light

• Tax Foundation / KPMG average state/local tax burden ranking for new

traded-sector projects: 37th (i.e., among the higher-cost states)

• Tax Foundation / KPMG tax burden rankings were incorporated into

CNBC, Forbes, Site Selection, and others, causing Virginia to drop

With federal sequestration and Virginia’s reliance on federal spending,

Virginia experienced a slowdown in actual and forecasted growth

• CNBC Economy Rank: 11th in 2010 vs. 36th in 2015 (-25 spots)

• Forbes Economic Climate Rank: 4th in 2010 vs. 32nd in 2015 (-28 spots)

• Forbes Growth Prospects Rank: 14th in 2010 vs. 19th in 2015 (-5 spots)

CEO perceptions of Virginia’s business climate declined, largely connected

to a decline in marketing

• Chief Executive survey rank: 4th in 2010 vs. 14th in 2015 (-10 spots)

• Site Selection exec survey rank: 8th in 2010 vs. 15th in 2015 (-7 spots)

Source: Published rankings methodologies and VEDP analysis

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CNBC ANALYSIS: WHY VIRGINIA IMPROVED THREE SPOTS TO NO. 1 IN 2019, KNOCKING TEXAS DOWN TO NO. 2

* All 2018 scores normalized to 2019 category weights

Source: CNBC; VEDP analysis

DRAFT

Category (Max Possible) Un

ad

juste

d

No

rmalized

*

2019 Ch

an

ge*

2018 2019 Ch

an

ge

Category (Max Possible) Un

ad

juste

d

No

rmalized

*

2019 Ch

an

ge*

2018 2019 Ch

an

ge

Workforce (450) 304 322 347 25 3 1 2 Workforce (450) 286 303 321 18 7 4 3

Economy (375) 208 260 239 (21) 13 16 (3) Economy (375) 263 329 295 (34) 1 4 (3)

Infrastructure (350) 207 181 200 19 20 13 7 Infrastructure (350) 288 252 216 (36) 1 8 (7)

Cost of Doing Business (350) 161 161 158 (3) 34 35 (1) Cost of Doing Business (350) 216 216 214 (2) 18 19 (1)

Quality of Life (325) 190 206 203 (3) 19 17 2 Quality of Life (325) 142 154 132 (22) 31 37 (6)

Education (175) 147 129 134 5 6 1 5 Education (175) 80 70 73 3 37 39 (2)

Technology & Innovation (175) 141 110 109 (1) 15 17 (2) Technology & Innovation (175) 157 122 123 1 9 10 (1)

Business Friendliness (175) 116 135 145 10 5 3 2 Business Friendliness (175) 84 98 105 7 21 17 4

Access to Capital (75) 77 58 56 (2) 13 15 (2) Access to Capital (75) 95 71 71 (0) 3 3 -

Cost of Living (50) 18 18 19 1 33 32 1 Cost of Living (50) 40 40 39 (1) 11 12 (1)

Total (2,500) 1,569 1,579 1,610 4 1 3 Total (2,500) 1,651 1,655 1,589 1 2 (1)

Change in total points attributable to… Change in total points attributable to…

Shift in category weightings 10 Shift in category weightings 4

Performance and/or metric change 31 Performance and/or metric change (66)

Total change in points from 2018 to 2019 41 Total change in points from 2018 to 2019 (62)

2018

Category Scores Category Ranks

Virginia Texas

Category Scores Category Ranks

2018

Virginia went from trailing Texas by 82 points in 2018 to leading Texas by 21 points in 2019, a

total swing of 103 points. The top three contributors appear to have been:

• A new Infrastructure metric – population within a day’s drive (possibly more than +50 net to Va.)

• Substantially larger decline for Quality of Life in Texas (-22) than in Virginia (-3); net +19 to Va.

• Substantially larger decline for Economy in Texas (-34) than in Virginia (-21); net +13 to Va.

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IN THE 13-YEAR HISTORY OF THE CNBC RANKING, NO STATE HAS EVER BEEN NAMED NO. 1 TWO YEARS IN A ROW


2019 – Virginia

2018 – Texas

2017 – Washington

2016 – Utah

2015 – Minnesota

2014 – Georgia

2013 – South Dakota

2012 – Texas

2011 – Virginia

2010 – Texas

2009 – Virginia

2008 – Texas

2007 – Virginia

Texas and Virginia are the only

two states to have achieved a

No. 1 rank more than once;

each has done so four times

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THE TOP FIVE STATES IN THE CNBC RANKING HAVE POINT TOTALS THAT ARE CLUSTERED VERY CLOSE TOGETHER


Points Percent

2019 Total Below Below

State Rank Score Virginia Virginia

Virginia 1 1,610 n/a n/a

Texas 2 1,589 -21 -1.3%

North Carolina 3 1,586 -24 -1.5%

Utah 4 1,573 -37 -2.3%

Washington 5 1,558 -52 -3.2%

State total scores (i.e., total points) vary substantially from year to year – on

average 52 points up or down (median of 44) from 2018 to 2019. All else being

equal, this suggests Virginia easily could rise or fall 3-4 spots from one year to

the next (e.g., 2019 to 2020). To confidently stay among the top few states every

year, we need to regularly make changes to strengthen our competitive position.

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VA GENERALLY IS IMPROVING IN BUSINESS CLIMATE RANKINGS, BUT IS NOT YET CONSISTENTLY AT THE TOP – AND COULD FALL

Ranking

type Business climate ranking (latest edition)

Latest

rank and

direction

Forecast range without

implementation of additional

strategic plan initiatives

Forecast

range with all

strategic plan

initiatives

2021-2022**2019-2020 2021-2022

Purely or

largely

subjective

Area Development Top States for Doing Business (2018) 10 8-13 7-9 1-5

Business Facilities Best Business Climate (2019) 2 1-5 1-5 1-5

Chief Executive Best States for Business (2019) 13 10-15 7-9 1-5

Development Counsellors International (2017) 14 12-16 7-9 1-5

Site Selection: Top Business Climates* (2018) 7 5-10 3-5 1-5

Primarily

based on

metrics

CNBC Top States for Business (2019) 1 1-8 1-8 1-5

Forbes: Best States for Business (2018) 4 1-8 1-8 1-5

Building on recent significant steps (e.g., HQ2, Tech Talent Investment Program, broadband investment, basic

marketing program, launch of custom workforce program), our outlook for the next couple years is relatively

positive. Nevertheless, because the top several states are clustered relatively closely together, there is risk that

Virginia could slip in the next round of rankings updates in the absence of aggressive efforts to move forward.

Virginia’s rankings in surveys of execs and site consultants was mixed in the last cycle. Our new basic (i.e.,

small) marketing program for economic development will help, but it will take 2-3 years to see the full effects.

Without pursuing expanded and new, high-impact initiatives to enhance our economic competitiveness and

economic development results, Virginia could easily fall slightly in 2020 – especially in CNBC and Forbes.

DRAFT

* VA’s latest placement in the executive survey portion of the Site Selection ranking was no. 10 (up from no. 13)

** Due to delayed full funding of some key initiatives (e.g., full mktg. program earliest FY2021), outlook for 2022 moderated

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AGENDA







Rankings

Q&A

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INITIATIVES TO IMPROVE VIRGINIA’S RANKINGS

▪ Comprehensive Site Development Program

▪ Rural Broadband

▪ Comprehensive Custom Workforce program

▪ Competitive Marketing and Lead Gen Funding

▪ Expansion of VEDP’s Business Investment Team

▪ Full Funding of the Tech Talent Investment Program

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AGENDA







Rankings

Q&A

32

Q&A

vedp update · 2019-09-23 · •forbes growth prospects rank: 14th in 2010 vs. 19th in 2015 (-5...

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