The Leader - May/June 2008 - (Page 62)

G l o B aliz a tion 2 .0 : site selection co ns ultants s co uri nG tHe G lo Be to Me e t cli e nts ’ DeManD s a customer service operation, do you go with the absolute cheapest location or do you stick it out in a city or region where wage inflation is rampant, but you have a plentiful, though transient, supply of English speakers and other skilled labor? Do you segment the operation to deal with different customer bases? Do you have the management and financial horsepower in your organization to manage operations on the other side of the globe? Is English fluency necessary, or is the operation more reliant on coding and programming skills rather than language skills? A greater emphasis on political, currency and weather risk is also part of the evaluation, McEnroe said. “There’s a little more deliberation now,” McEnroe said. “I’m walking clients through a much calmer, more detailed sense of where each piece goes. Everybody wants to know where the next place is, but there aren’t enough new places in the world that are dirt cheap and where people speak English.” For many companies, human resources – managing the labor pool – and logistics – a city or region’s position in the global supply chain – are playing an increasing role in site selection and reducing costs. In Asia and around the world, this leads many companies to a more regionalized approach to site selection, said Dennis Donovan, principal at Wadley-DonovanGutshaw (WDG) Consulting. Like McEnroe, Donovan sees clients taking a more holistic, big-picture approach versus a silo approach to site selection, with a focus on maximizing human resources to achieve the highest-quality, lowest-cost production. Research and development is a natural exception, requiring multinationals to go to talent centers like Israel and Silicon Valley – or even Bangalore, Shanghai and Mexico City – with much less emphasis on labor costs. Still, regionalization and the HR equation will benefit smaller metro areas in Asia and beyond as they can capitalize on lower labor and operating costs to draw manufacturing, call centers and other BPO-focused operations, assuming the community has invested in infrastructure, education, training and other economic development basics, Donovan said. “Getting into markets where a company can generate a pool of quality applicants of moderate cost and be able to limit turnover is absolutely critical,” Donovan said. “Companies are beginning to see the wisdom of not hunting in packs. Hunting in packs decreases the sustainability of labor market advantages.” “What our clients are doing today is adopting an all-shore location philosophy,” Donovan continued. “They have to have the flexibility to upsize and downsize as the market warrants.” se HaBla … czecH? Asia isn’t the only locus of low-cost, site-selection activity, as Eastern European and Central and South American economies further develop, creating opportunities to enter new markets and mine labor pools. According to IBM Global Business Services’ data, Mexico trailed Vietnam in new jobs with approximately 60,000 new jobs created by direct foreign investment in 2006, while the Czech Republic trailed only Singapore with 400 new jobs relative to foreign investment per 100,000 inhabitants. Bulgaria, Slovakia, Hungary, Romania, Bolivia, Poland, Bosnia and Herzegovina and Costa Rica were also in the top 20 countries for per capita job creation relative to foreign investment. Similar to India and China’s largest metro areas, multinationals are now looking beyond cities like Warsaw, Prague and Budapest in Eastern Europe to second-tier cities and regions, especially university towns that offer a wealth of highly educated labor. Eastern Europe poses its share of risks, too, especially in terms of securing experienced managers. Local management “Quality of life alone doesn’t pay the bills You need a good workforce, a stable business environment, competitive costs, and above all, a reasonable ROI—which is exactly what Roanoke offers.’’ - Annette Comer President, Elcomm The Roanoke Valley of Virginia Read more about Elcomm at www.roanoke.org/testimonials tHe le aDe r 62 MaY / j u n e 2008 http://www.roanoke.org/testimonials http://www.roanoke.org/testimonials

Table of Contents Feed for the Digital Edition of The Leader - May/June 2008

The Leader - May/June 2008 Leadership Contents Message from the CEO Real Estate in the News Green Real Estate Work Without Boundries Building Flexibility Into the Business Strategy Multi-Generational Work-Force Design Work Force Longevity Analysis Wells Fargo's David Nelson Pennsylvania's Michael Rossman Globalization 2.0 Site Selection Consultant Directory The New York Report: A Core of Traditional and State-of-the-Art Opportunities Discovery Forum Findings Industry Tracker Young Leader Career Development Effective Leadership Economic Development in the News A Look Ahead In Our Next Issue Calendar of Seminars Index of Advertisers Executive Development Spotlight

The Leader - May/June 2008

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