The Southeast: Engine Of Growth

Sunday, April 3, 2011 - 10:19

The Editor interviews Chris Cummiskey, Commissioner of the Georgia Department of Economic Development.

Editor: Please tell us about your professional background.

Cummiskey: I worked for about 8 years in the energy business - RWE Americas, Mirant and Mieco - covering a pretty wide range of roles including business development and marketing, but mainly as an energy trader. Then I got more involved in the governmental sector. I worked for Senator Johnny Isakson of Georgia as his state director and as chief of staff for the former speaker of the house for Georgia. Most recently I directed state relations for the University of Georgia. All of these roles touched on various aspects of economic development, some quite a bit, so when this opportunity came along I was immediately attracted to it.

Editor: What business sectors are most prominent in the Southeast, and has this shifted in recent years? How did the recession affect the mix?

Cummiskey: The Southeast remains strong in manufacturing, including automotive and aerospace. Technology is also very big in the region, particularly in the telecommunications arena. Every state has its areas of focus, of course, and the fields of healthcare and bioscience are a priority for many of us. In fact, healthcare jobs in the Southeast have grown by almost 12 percent since 2007, according to the Federal Reserve Bank.

Just as in the rest of the U.S., certain sectors were hit harder by the recession, particularly construction, but in general states and regions that were already diversified in their industries prior to the recession were hit less hard than those who weren't.

Editor: What are the competitive advantages that the Southeast offers to business and industry? What about Georgia in particular?

Cummiskey: Well, of course the availability of workforce is a huge advantage. The Southeast is the fastest-growing region of the country, so companies know they can find the people they need. And it's mostly a right-to-work region, so that keeps the Southeast very competitive with other parts of the country. We're also very competitive on cost - land costs, operating costs, living costs. Businesses can come here and know that their dollars stretch a lot farther.

In Georgia we feel that we've taken workforce accessibility to the next level with our Quick Start program. Georgia Quick Start was founded in 1967 and was the first program of its kind in the U.S., and it's become a national model for customized workforce training.Quick Start is part of the Technical College System of Georgia and starts working with companies while they are still prospects, determining what it is they need to operate at full capacity the day they open their doors in Georgia.

What's also true of the Southeast, and especially for Georgia, is our strong supply chain logistics network. We are very interconnected via our interstates and rail lines. In Georgia we're very fortunate to have Hartsfield-Jackson Atlanta International Airport and the global accessibility it provides, which numerous companies have cited as a prime reason they've chosen to locate or expand here.Our deepwater ports are also an important part of our transportation network. All the coastal states are acutely aware that the Panama Canal expansion will vastly affect our ports, and the Georgia Ports Authority is one of several around the Southeast proactively taking steps to accommodate these changes.

I also think that, anecdotally, partnership is a very strong selling point. I think the Southern culture of hospitality really brings a different dimension to the partnerships here, whether they are regional, local, statewide, or public-private. The prospects we host in Georgia are bowled over by the resources offered by our partners and the way these alliances work hand-in-hand to help them.

Editor: In 2009, then-Governor Perdue signed several enhancements (especially including tax benefits) to the Business Expansion Support Act (BEST) legislation. Have those proved beneficial? Are they still in effect? Have any of the measures been changed/improved since?

Cummiskey: Yes, they have been very beneficial, and are still in effect. The Quality Jobs tax credit in particular has been utilized by a number of companies that have created jobs paying more than a county's average. And the R&D tax credit is providing a stronger foundation for those entrepreneurial companies whose innovations we want to keep and grow in the state.

Right now the legislature is looking at the state's tax code to ensure it provides the best value for all it affects, so this may result in some changes. Governor Nathan Deal has been very outspoken about his desire to maintain or increase the state's competitiveness, so Georgia will remain very welcoming for the corporate community. Editor: What are Governor Deal's plans to encourage business in the state?

Cummiskey: He has made it clear that his highest priority for Georgia is its economy and long-term job creation. He understands that keeping our environment healthy for businesses leads in turn to a healthy economy. So to ensure we stay competitive, he has proposed a far-reaching Competitiveness Initiative, a partnership between government and business to develop a plan for economic growth.

For this initiative, I'm working with the president of the Georgia Chamber of Commerce and business leaders from around the state:we are weighing the strengths of our current assets and gathering information. The end result will be a well-defined, statewide economic development and competitiveness strategy that takes into account our short-term needs and offers a long-term vision and a timeline for actions that will result in job creation and business growth. We are focusing on key issues we know companies consider when making location decisions. Those include workforce development; infrastructure; innovation and access to capital; our business climate and cost of doing business; international trade; innovation and access to capital; and government efficiency.

Editor: Last year we learned that Georgia has hired an international business liaison, Nico Wijnberg. Can you give us an update on what he's been up to?

Cummiskey: Nico's services are very popular and give us a big advantage when we're marketing Georgia to international companies. He helps the families of company executives move and get settled into their homes here in Georgia, leaving the executives free to concentrate on matters relating to the move of the company. He has assisted around 75 companies since he came on board and is working with a number of others now. In addition, his job involves liaising with the international business community in Atlanta and in particular with the 40-plus bi-national chambers of commerce. It's important for us to know which resources we can pull in for our clients and prospects, as well as find out which issues our existing international partners may have.

Editor: I have read that Georgia's import and export numbers have gone up significantly in the last year. Where are most of your exports headed? In addition to the overall improvement in the economy, to what do you attribute this growth?

Cummiskey: 2010 was a record year for Georgia exports. We exported $28.7 billion, a 21 percent increase over 2009. Canada remains our top market, as it has for many years. China is our second-biggest export market, followed by Mexico, Japan and Germany. We've seen increases since last year in all these markets, particularly China (over 35 percent) and Mexico at almost 43 percent.

We have seen increases in many product categories, which indicates that Georgia's increase in exports cannot be explained by a single sale of a high-dollar-value item, like an airplane. Starting in 2008, Georgia has seen an increase in the number of small businesses that strategically targeted international markets as a means of diversifying their markets. However, there were two primary reasons for the increased exports.First, the exchange rates in 2010 made U.S. products more desirable, leading to an increased demand for high-quality U.S. products at affordable prices.Secondly, worldwide economic growth of five percent outpaced U.S. economic growth of three percent, which gave more purchasing power to companies worldwide.

Editor: The U.S. State Department has given the green light to the establishment of an Indian consulate in Atlanta. How did this idea take shape, and what do you hope it will do for Georgia?

Cummiskey: The Indian government announced this consulate several years ago, and we are looking forward to its implementation. We anticipate that having the Indian consulate in the state will further solidify the already warm and extensive business relationship we enjoy with that country.

Editor: I understand you recently encouraged the Chinese SANY Group to build a plant in Peachtree City. Can you tell us more about this decision and how it came about?

Cummiskey: It has been very exciting to see the SANY project come to fruition. The company held an impressive grand opening attended by the president of the company and the governor of the Hunan Province. SANY originally committed to 200 jobs and has already hired the bulk of those. Investments like this are one of the reasons we established an office in China a few years ago, and we think SANY's success here will encourage other Chinese companies to take a close look at what we have to offer.

Editor: Kia Motors built its first U.S.-based plant in Georgia. What does this mean for the state?

Cummiskey: The Kia plant has really engineered a turn-around for the west-central part of the state, and insulated it a good deal from the economic downturn most of the rest of us experienced. Thirty percent of all Kia vehicles sold in the U.S. now come from that facility, which tells you a bit about the boom the West Point region is experiencing. The company committed to 2,500 jobs, but those don't even count all the supplier and indirect jobs. We estimate the plant will be responsible for about 20,000 jobs created by 2012.

Editor: What do you see as the long-term prospects for Georgia? Any thoughts on the Southeast overall?

Cummiskey: The 12-state Southeast region is still growing, in both GDP and population, and four of our states, including Georgia, are among the top 10 fastest growing in the U.S. So this kind of growth, even during one of the severest economic downturns in decades, is a pretty good indication that the Southeast, including Georgia, has a lot to offer in terms of benefits, not just for commerce, but quality of life.We are acutely aware that the competition these days is global in scope, and we've got to stay on our game, constantly re-examining our assets and seeing what we can do better. That's certainly our attitude here in Georgia. As much as we've had success in bringing jobs and investment to the state, we're always looking for ways to stretch our goals, as it were. That's the vision behind the Competitiveness Initiative.

Editor: Is there anything else you would like to add?

Cummiskey: Just that this is one of the most exciting jobs I've ever had - to be working for a state I love, under a governor who has a clear vision and a great playbook, and for the best reason possible, which is creating economic opportunities for the people in our state. I'm a lucky man.