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Study may aid efforts to lure high-pay jobs to Phoenix – Quality of workforce receiving greater consideration than many other factors

In the hypercompetitive arena of attracting high-wage companies to a region, Greater Phoenix may have found a way to beef up its arsenal.

In a study commissioned by the Greater Phoenix Economic Council, the region fared "surprisingly well" in a comparative analysis of peer cities in 10 industry sectors.

Jonathan J. Higuera
The Arizona Republic

http://www.azcentral.com/arizonarepublic/business/articles/0208gpec08.html

In particular, the area is well positioned to attract regional headquarters and next-generation electronics firms. But it also scored well in aerospace manufacturing, life sciences and research and development.

The study was conducted by IBM Global Location Services. It didn’t actually assess how the region has performed in these sectors, but rather how a company or a relocation consultant advising a company perceives the region.

"This was not designed to give us a true picture of ourselves, but to give us the picture that these consultants paint for their clients," GTEC President Rick Weddle said. "This is the report they would prepare for the company even before they called us."

The area’s strengths revolved around it low operating costs, transportation infrastructure and quality of life.

A consistent weakness cited in the assessment was the area’s workforce limitations, particularly for industries requiring high-level skills.

"If we’re going to be sustainably competitive in this next century, we’re going to have to concentrate on improving the skill sets in our existing labor pool," Weddle said.

The factors were weighted, with quality of workforce receiving greater consideration than many other factors.

"That’s a pretty serious issue for companies," said Gene DePrez, who led the IBM consulting group’s efforts.

The Valley also suffers from not having a critical mass of companies in certain sectors, such as biosciences.

But by and large, economic-development officials were pleasantly surprised by the area’s showing against cities such as Austin; Raleigh, N.C.; Los Angeles; San Diego; Seattle; San Jose; Dallas; Atlanta; and Denver.

"This helps us understand we are in pretty good shape," Weddle said. "But there is still a very important need to improve in some strategic areas."

The bench-marking project will be unveiled formally during Wednesday’s GPEC Economic Summit at the Arizona Biltmore.

The results will be used to train economic developers to make better sales and marketing presentations to prospects.

"If we are as well positioned as it seems, now might be an opportune time to look at ways to increase the resource allocations to marketing and overall branding," Weddle said. "It’s a very powerful tool we’ve never had. It takes our region’s sales team to another level."

DePrez said the Valley’s strengths may not be widely known among companies and relocation consultants.

"Like in any marketing situation, you can have a good product but it may not be known as a good product, or there may be a lingering perception that doesn’t match the reality," he said.

One area that didn’t fare as well was software development, where the Valley’s operational and labor costs were higher than those of all other cities except San Jose. Weddle said the analysis can help focus his organization’s efforts.

"We learned about our vulnerabilities as much as our strengths," he said.

For example, software development is a sector at great risk of foreign outsourcing, as is next-generation electronics. But the region is more competitive in the latter. "It says we’ve got a pretty good business here, and we shouldn’t give it away," Weddle said.

The study was approved by GPEC last summer, and the assessment began in September. It cost $120,000, but that price tag will probably go up if IBM is asked to do some additional work related to the study.

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