After several decades of working with companies considering where to expand or relocate, the single factor that frequently surprises me is how those responsible for recruiting new businesses seem not to fully grasp the relative performance of their current businesses. Perhaps this is most especially true when retention and attraction are organisationally bifurcated.

We all know that as a seeking company narrows its choices, any number of factors will enter into the basis for a selection – differences in one-time investment and sustainable costs (net of incentives), operational challenges, initial and ongoing supply of talent, and so on. Each facet of the decision is supported by a substantial amount of analysis and, hopefully, by a rigorous process of evaluating the underlying assumptions behind all those numbers and projections.


But, when team leaders and eventually company leaders summarise and justify a selection decision, anecdotal retellings of current companies’ comments are frequently at the forefront.

Peer-to-peer conversations with companies already operating in a community are often pivotal. The most compelling statement, especially among large company executives is: “X, Y and Z told us this is one of their very best locations.” Remarkably, many economic developers are not aware of where the operations in their community rank in each company’s internal assessments. 

Similarly, young companies, perhaps making their first expansion decision, focus on the experience of the young companies that have started and grown there or made a recent expansion choice. Their venture backers always ask about this; good reports may echo among the venture capitalists’ other portfolio companies.

Although there is much talk about inequality in the US’s political dialogue, for economic developers, positive differentiation is an inequality that helps winners win and challengers improve. We may be created equal but we don’t end up that way.

Daniel Malachuk works with business and government leaders on global direct investment strategies. He has advised many of the world's leading companies and served in the US public sector as director of White House operations.