What is in this article?:
- Follow Investment Pattern to Create Manufacturing Growth Strategy
- Areospace Cluster
Gilbert, Arizona saw the trends, assessed their assets and created a playbook.
It all boils down to two paths.
To boost a region’s manufacturing footprint planners can decide what businesses they wish to attract to the region, or they can analyze current trends and create a strategy to sustain it.
Gilbert, Arizona, part of the Phoenix metro, area chose the latter.
“We took a close look at the source of investments,” explains Dan Henderson, CEO, Gilbert Arizona Office of Economic Development. “Once we understood why capital was flowing into our region, we set our strategies and lined up the necessary tactics. We created a network of companies and government organizations to implement that strategy.”
One trend Gilbert noticed was that a lot of money was coming from Canada. The first reason for the influx was the low cost of real estate due to the economic downturn. Canada weathered the recession relatively well and low land prices in the Phoenix metro area were attractive. From an operating standpoint, prices of both labor and raw materials were higher in Canada. Again this was due to a strong economy. Concurrent with those reasons Canadian companies were making a concerted effort to expand to the U.S. And in Arizona the industries of interest were high-tech, engineering and information technology.
Understanding these factors the city began working on an international business development strategy. “As Arizona’s second largest trade partner and supplier of 130,000 jobs, Canada’s importance to Arizona and Gilbert’s economy cannot be overstated,” said Gilbert Mayor John Lewis. “Gilbert is establishing relationships that will increase foreign direct investment and enhance policies that promote bi-lateral trade.”
The city’s strategy was so successful that they were the first Arizona municipality asked to join the Canada Arizona Business Council. The Council, a group of 100 private individuals, mostly CEOs had spent a number of years priming the partnership. “Our networking capability assures “one degree of separation” from the decision makers in any field,” explains Glenn Williamson, CEO, Canada Arizona Business Council. “Our goal is to increase the bi-lateral trade between Arizona and Canada from $2.5 billion per year to $5 billion.”
One of the ways to reach this goal is to seek out Canadian companies and gauge their interest in opening up locations in the U.S. Silent Aire, an Edmonton, Canada-based manufacturer of HVAC equipment for industrial, healthcare and more recently data centers, was very interested.
The company’s focus on data centers dovetailed nicely with the recent announcement that Apple chose Mesa, Arizona, part of the Phoenix metro area, as the location for a new global data center.
“This location offers us a number of advantages,” explained Brett Manning, vice president of operations, Silent Aire. “It keeps us close to our customers in the Pacific Northwest, as well proximity to Silicon Valley.” The company opened up its factory in August 2013.
Manning said the business climate was especially suited to become the company’s first manufacturing facility outside of Canada. “The various organizations took a measured and surgical approach to helping us navigate the new location. Responses by all parties involved were breathtakingly easy. They were always willing to address our issues and connect us to whatever we needed.”
Part of the company’s decision to move here was that it has always considered itself to be a North American company and needed to be closer to U.S. customers. Not only are they now closer to customers the company has added new customers in Phoenix. “It’s a strong data center market with lot of activity in the area in general,” says Manning.
One reason for the data center activity can tied directly to a strategic decision by the area to offer incentives to the industry. There is a sales tax exemption for data center equipment and construction for owners, operators, and colocation tenants of computer data centers. To qualify the facility must be located in Maricopa County and invest $50 million within 5 years.