Are Louisiana's high business rankings based on performance or perception?
After reviewing Area Development's new rankings of the best U.S. states in which to do business—Louisiana is No.6—magazine consultant and site selection professional Andrew H. Shapiro says he's struck by the consistency with which Southeastern states captured the top spots in nearly all of the 17 categories that the overall rankings are based upon.
"There can be only one of two explanations for this: either Texas, South Carolina, Georgia, Louisiana, Alabama and Florida indeed comprise the best locations for all manner of new jobs and investments, or these states are simply better at promoting themselves," says Shapiro in a column accompanying the rankings. "While I have high regard for the business climate across much of the Southeast … I tend to favor the the latter explanation."
In response, LED Secretary Stephen Moret tells Daily Report he agrees with Shapiro in part.
"I do think our targeted marketing efforts have contributed to our dramatically improved national business climate rankings," Moret says. "However, it is important to note that marketing works best when it is based on reality."
Moret notes that since 2008, when he was appointed by Gov. Bobby Jindal to lead the state's economic development efforts, Louisiana has reformed its governmental ethics laws, eliminated what he calls "unconventional" business taxes, "created the best workforce development program in the U.S.," and implemented "historic" public education reforms. Over the same period, he says, LED has been able to highlight its success in attracting top flight companies such as Halliburton, GE, IBM, Lockheed Martin, Nucor and many others to invest in the state.
"Marketing helps, but substantive policy reforms and business development results appear to make a bigger difference on a state's position in national business climate rankings," Moret says. "Marketing works best when it is focused on communicating tangible competitive advantages and/or tangible business development results."
Moret says LED's spending on marketing and advertising—about $5 million to $5.5 million annually—has remained about the same since he took office, but adds his department is using a more targeted approach these days than it once did.
"For example, in addition to conducting targeted ad campaigns online and in print media, we regularly visit with 200 or so top opinion leaders in the economic-development space, including leading site-selection consultants, national rankings organizations and key trade publications," Moret says.
In other words, LED is increasingly meeting more people like Shapiro, who help determine the annual business rankings that are so highly publicized.
"The fact is that we consultants are no more immune to persuasive marketing than are any other site selectors," Shapiro says in his column. "Yes, we have our data and our models and our years of cumulative experience; however, we also tend to be more frequent readers/viewers of the trade journals and websites that economic developers use to position their markets; and let's face it, we are much more likely to host a Southeastern delegation in our offices, and share the podium with such colleagues at conferences."
Moret says that while each of the various state rankings published annually are based on varying criteria, the important thing to note is that Louisiana has been rising in all of them.
"Although every national business climate ranking in the U.S. utilizes a different methodology, all of them indicate that Louisiana has substantially improved over the last five and a half years," Moret says. "In fact, Louisiana now ranks higher in every national business-climate ranking than it ever did prior to 2008."
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