There has been a seismic shift in the way that companies throughout America make their relocation decisions, and it applies to Atlanta as well as its competitors. Companies are driven to locations that can provide a robust pipeline of talent and tight-knit innovative communities.
This focus has created new demands on cities that want to build and sustain competitive economies. Companies have always taken talent into consideration but ultimately there was a belief that the talent would follow the company. This is no longer true. Millennials first choose where they want to live and then where they want to work. Today’s sought-after talent is closely tied to a city’s ability to provide a high quality of life.
This means a connected transportation system, plenty of entertainment activities and accessible, affordable housing. All of this can be found in Atlanta. Companies that have recently chosen to call Atlanta home are a testament to this. From NCR (3,600 employees) to Kaiser Permanente (900 employees) to Worldpay (1,266 employees), all of these prestigious business newcomers have emphasized the critical role that access to highly qualified talent played in their decision to relocate here.
Tight-knit, innovative communities do not just appear and cannot be fabricated; they need to be fostered and carefully supported in creative ways. Companies want these communities to support their corporate innovation goals. The most successful companies are those that have the ability to leverage external sources — both private and institutional — as well as innovative research and ideas. In other words, “serendipitous collisions” between university researchers, students and related companies drive a corporation’s ability to be innovative. Companies can no longer innovate in a bubble.
At the core of innovation is a company’s need to adapt to the ever-changing demands of its customer base. Innovation is essential to survival in this very competitive domestic and international marketplace. Cities need to recognize this so that they can ensure their companies are as successful as possible. This in turn provides the necessary jobs needed for a vibrant local economy.
Atlanta is a prime example of this as well. With over nine privately funded innovation centers all within a one-mile radius, along with proximity to Georgia Tech and a cluster of similar companies, Atlanta has a concentration of institutions that excel at creating carefully crafted ideas. In line with this trend to create a critical mass of research and development activities within closely connected real estate sites, cities must rethink their incentives to support the innovative community demanded by universities and corporations. Atlanta, through the vision of Mayor Kasim Reed, has done just that.
InvestAtlanta has taken some time-tested incentive tools and found ways to support innovative projects, such as Square on Fifth — the only dorm-incubator in the state — and the High Performance Computing Center, which will create a unique synergy by bringing together the smartest people in academia and industry with an unprecedented research compute and data capacity in any urban core in the Southeast. These strategic and catalytic projects support a company’s relocation decision while growing the innovation community.
Other successful catalyst projects in Atlanta support the city’s innovative community ecosystem. Atlanta Tech Village houses investors, corporations and more than 100 startup companies, all in one building; the Women’s Entrepreneur Initiative houses 12 women entrepreneurs and gives them access to a strong support network for growing their businesses; and FlatironCity, Switch Yards and many others are helping to build the innovative community.
Financial technology (FinTech) is one sector in particular where real estate decisions based on talent and innovation have focused on Atlanta. In fact, this is a $34 billion industry in Georgia, trailing only New York and California. As home to the first internet bank, NetBank, and Equifax, Atlanta is the FinTech capital of the U.S. What’s driving this sector is the close proximity of finance, IT and software companies. With 250,000 people working in finance-related occupations, and 80,000 additional workers in IT-related fields, Atlanta’s FinTech assets are strongly influencing the relocation decisions that companies are making.
Times have changed. Companies don’t base their relocation decisions solely on cost anymore. Instead, they’re going where the talent and the innovation incubators are found — in places where academia, investment resources and inventive technology have formed a powerfully collaborative culture, one that bubbles up the new ideas that keep businesses on the leading edge. That’s where they’ll put down new roots — and stay competitive in an ever changing world.
— By Dr. Eloisa Klementich, President and CEO, InvestAtlanta, the official economic development authority for the city of Atlanta. This article originally appeared in the May 2016 issue of Southeast Real Estate Business.