Five Unexpected Findings from The State of Site Selection

In partnership with the Site Selectors Guild, DCI has released the third edition of the biennial study, The State of Site Selection. This study examines the global conditions impacting location decisions and presents the key themes critical for Economic Development Organizations (EDO) to understand and to communicate to their board, public officials and stakeholders regarding the corporate investment landscape. 

The 2024 edition of the report provided some unexpected findings that are essential for EDOs to understand in order to more effectively work with site selection consultants, their local partners and corporate executives.

1. Location Decisions in a Polycrisis Era

Crisis and risk are omni-present when one thinks about geopolitical tensions, environmental issues, fluctuating economies, resource shortages, technological change and societal challenges constantly dominating the headlines. While project fundamentals (i.e., land, labor, operating costs, etc.) have remained constant, it is in a vastly different context where the concept of risk as evolved and expanded. As a result, this year’s study showed a significantly different shift in tone, sentiment and priorities, as Guild members – more than ever – look at  means to mitigate risk on behalf of their clients and the communities they partner with.

2. There’s No Place Left for my Clients to Go…

87% of Guild members strongly agree that resource shortages (i.e., land, labor and capital) have challenged or impacted project timelines at best and the overall viability of projects at worst. In terms of the site selection process, intensified screenings of sites earlier in the process is critical…without a viable site with sufficient utilities and infrastructure, the project must look elsewhere. To make it past the first screening, markets must have at least one site that would be suitable for a proposed operation…a criteria that is becoming harder and harder to meet and reinforces the importance of EDOs advocating for certified site readiness programs.

3. Access to Capital is Stifling Investment

Another factor impacting the timeline and viability of projects…a lack of access to “easy” or affordable capital has had the consequence of favoring investment among companies that have tried and true technologies and products with a proven revenue stream. This has put emerging or untested technology at a disadvantage. This trend could squelch innovation and new products from coming to market and discourage investment in emerging industries.

If a project doesn’t demonstrate certain characteristics? EDOs are choosing not to respond to some projects and choosing instead to “save” limited resources that may offer greater stability or impact.

4. Housing Crisis Woes

Given the shortage of industrial sites, executives are looking further and further out from population centers. Once they find a site, they are asking to “see the rooftops” in order to understand where their workforce will live and the quality of place they can offer to existing or potential talent.  

In many cases, more than just building homes, locations also need to think about the amenities and other infrastructure required to support growing communities. A host of issues present mounting challenges to development in this regard, something that stands out in this year’s report.

5. A Tale of Two Industries

Meanwhile, 48% of Guild members strongly agree that the volume and scale of office projects will never return to pre-pandemic levels…yet there are opportunities. Office project activity is occurring albeit at a smaller scale and volume and for EDOs with a glut of office space, opportunity exists in niche sectors. Not-for-profit agencies, R&D, and innovation sectors will look to locate in primarily Tier 1 cities with a strong university presence and quality of life assets. The quality of life assets in Tier 1 cities are also attractive to employers seeking to lure employees back into the office. 

There is one certainty in the site selection industry and that is that corporate clients abhor risk. It is imperative that site selection consultants fully understand the emerging and expanding risks impacting location decisions and work closely with community partners to mitigate as much risk as possible. 

Download the 2024 edition of The State of Site Selection today to dive deeper into the results from the most recent data. 

Research is at the core of all corporate location decisions and economic development marketing strategies. Get in touch with Robyn Domber, Senior Vice President, Research, at [email protected] to learn more about how DCI’s Economic Development team provides the research and data needed to enhance your location’s marketing efforts.