Editor: What is the GDEcD’s mission?
Cummiskey: Our agency spearheads statewide efforts to bring jobs and investment to Georgia through economic development. We help our existing companies and small businesses with expansions, assist new companies with their location needs and help small and medium-sized companies grow through international trade. In addition to driving business growth through our Global Commerce division, we help Georgia’s economy grow by attracting visitors to the state through our Tourism division. Our Film, Music and Digital Entertainment division promotes Georgia’s vast resources for the entertainment industry. In addition, we house such diverse drivers of economic development as the Georgia Research Alliance, the Georgia Centers for Innovation and the Georgia Council for the Arts.
Editor: How is business in Georgia? What industries are thriving, and where are new opportunities arising?
Cummiskey: Business is good! We’ve had some great projects announced recently, and our pipeline is full. Caterpillar just broke ground on a new manufacturing plant on the Clarke-Oconee county line near Athens. They’ll hire around 1,400 people, and we expect their suppliers to create another 2,800 jobs. Manufacturing in general is doing very well: both existing and new companies like RockTenn, Tenneco, Toyota Industries, Kubota and Osmotica Pharmaceutical – and a few more Kia suppliers – have added jobs this year. With Caterpillar, that’s close to 5,000 jobs, just in manufacturing.
Georgia is doing well in this area for a variety of reasons. If a company is looking in the Southeastern region of the country, it’s going to look at Georgia, if for no other reason than that we are the logistics hub of the region. Our ports are a primary driver of business – that’s certainly true of Caterpillar – and the access we can provide from our ports and from Hartsfield-Jackson Atlanta International Airport means companies can get their products to 80 percent of the country within a two-day truck drive or a two-hour flight. Also, we have plenty of workforce, and we have the top-rated workforce development program in the country, Georgia Quick Start. Quick Start can duplicate and teach a manufacturer’s process from top to bottom so that these companies are in operation mode from the day they open. Also attractive to manufacturers is our single factor apportionment, which means that companies pay state income tax only on what they sell inside the state. This is huge for a company that markets its products nationally or internationally.
So manufacturing of all kinds is doing well, especially related to automotive and aerospace. We’re also seeing more energy-related manufacturing, for solar, wind and electric.
Simply because logistics is so closely related to manufacturing and because of Georgia’s extensive infrastructure in this area, we also have a lot of logistics-related business. More than 142,000 Georgians are directly employed by 11,000-plus service providers; we have more than 100 logistics-related education degrees, courses, programs and certificates, and Georgia is fifth in the U.S. for logistics-related patents.
We’re doing well in our other strategic industries, too, but I know you don’t have space for everything. I would encourage readers to visit www.georgia.org to find out what we’ve been up to.
Editor: What competitive advantages does Georgia offer to large corporations? Have any of these been developed specifically in response to persistent economic difficulties?
Cummiskey: Georgia has a lot of competitive advantages for all corporations: a skilled workforce, superb logistics, a low-cost environment, business-friendly tax incentives and a great quality of life. We have a very proactive business climate and a governor whose goal it is to make Georgia the number one state in the country for business. To that end, Governor Nathan Deal initiated the Georgia Competitiveness Initiative (GCI) as soon as he took office last year, which has now come to fruition in the form of a comprehensive report that includes input from 4,000 businessmen in every corner of the state and that lays out a blueprint to guide us. The Initiative looked at six key areas: business and regulatory climate; education and workforce development; infrastructure; global commerce and trade; innovation; and government efficiency. We received valuable recommendations for what the state can do and for what each of our regions can do to enhance these areas.
Our agency and the Georgia Chamber of Commerce partnered in spearheading this initiative, and we are now working with the governor’s team and other partners around the state on implementing various portions of these recommendations. This year, the legislature passed a tax bill, for instance, that included one of the top needs we heard from business leaders around the state during the GCI process: removal of the energy tax on manufacturing. So that’s a tangible result of the process and just one of many now in the works.
Editor: How can a U.S. company benefit from going global?
Cummiskey: Well, if by “going global” you mean expanding markets through international trade, there are a lot of benefits! The most obvious reason is to increase profits, and trade helps do that in several ways. For one thing, by selling to diverse markets, you reduce exposure to risk in the event that a market slows down for some reason – say a natural disaster or an economic downturn. Also, if you have a seasonal product, you can expand the selling cycle by marketing it to the Southern Hemisphere. New markets can increase a product’s life cycle – technology that is out of date here may be considered current somewhere else. Exporting helps keep companies abreast of innovations, and added sales volume can lower production costs. International exporting certainly helps Georgia – it creates twice as many jobs as domestic trade because for every job created in making the product or providing the service, another job is created in getting the product to market. Last year, we actually had yet another record year for exports from Georgia companies: $34.7 billion.
I want to say, too, that I’m really proud of the job our Trade team is doing. This team in fact won the nation’s highest award for export excellence a few years ago – the President’s E-Star Award. And now they are busy implementing two federal grants totaling over a million dollars awarded to us last fall – one from the Small Business Administration and one from the Appalachian Regional Commission – with the goal of helping more Georgia companies understand and engage in exporting. This funding has enabled us to further our educational outreach as well as expand trade show and matchmaking opportunities for our companies.
Editor: Please talk about how the GDEcD supports business incubator programs. Do these efforts focus solely on technology-related products?
Cummiskey: No, although technology is a big part of it. We’ve had a Center of Innovation (COI) program in six of our strategic industries for the last nine years, which has been very effective in transitioning the research coming out of our universities into commercial ventures, either for the researchers or for companies that want to utilize these new technologies or business models. The COI program essentially streamlines, quickens and lessens the risk in the process of innovation, so products can get to markets faster and companies can grow – that’s the economic development connection. We have Centers of Innovation for aerospace, advanced manufacturing, agribusiness, logistics, energy and life sciences, each led by an expert in the field. They work closely with our project managers to ensure the Centers’ resources are available to new or existing companies and sometimes to transition start-ups into a larger growth mode. The kinds of projects the centers work on vary widely – it could be the Aerospace Center connecting an aerospace company with unmanned aircraft technologies from Georgia Tech, or it could be the Agribusiness COI helping canning ventures move out of home kitchens into commercial kitchens. And it’s everything in between.
Editor: Does the GDEcD play a role in the state’s legislative process? Please discuss any legislative developments in Georgia that are of interest to corporate counsel.
Cummiskey: As a state agency, GDEcD does not lobby; however, we do work to make sure our legislators are fully informed about economic development in the state, and we interact with them frequently. The chairs of the House and Senate Economic Development committees sit on our Board of Advisors. We support economic development-related legislation initiated by the governor, and this year some of that came out of the Georgia Competitiveness Initiative I referred to earlier. Relieving manufacturers from being taxed on their energy use is significant. There are various other pro-business measures that have been proposed, but the legislature is still in session, so I’d rather not speculate on outcomes right now.
Editor: We understand Georgia has some innovative workforce development initiatives, including the Work Ready Certification program. Please discuss some of these programs and their impact on Georgia’s employment rates. Does the GDEcD interface with educational institutions about needed training and education for the state’s workforce? Are there specific training or academic qualifications that may ensure viable job opportunities in Georgia?
Cummiskey: I am going to answer these questions together because they are so interrelated. Yes, we have excellent workforce development initiatives, and most are tied into our educational institutions – both technical colleges and our universities. Georgia Quick Start, our customized workforce training program that I mentioned earlier, is a part of the Technical College System of Georgia, so it can leverage the resources of 25 technical colleges with 31 campuses. It’s been in existence for over 40 years, and it trains workers wherever a client company's needs are – at their facility, at the regional technical college campus or in mobile training labs that can be set up at the company’s site. They even built a dedicated training center for Kia’s workforce in Georgia. Quick Start’s having five regional offices means that no matter where in Georgia a company chooses to locate, a team of expert training coordinators who are familiar with the area and the local workforce can provide local support for any project. Over the years, Quick Start has prepared almost 800,000 trainees and delivered close to 6,000 projects for client companies. The estimated economic impact of Quick Start jobs in our 2011 fiscal year alone is $472 million.
The Governor’s Office of Workforce Development oversees the Work Ready program, which certifies both workers and communities and confirms to a company that a particular worker and community can provide the skills it needs now and the technologies it will need in the future. This has been a highly effective message to send businesses. More than 130 of Georgia’s 159 communities are now certified as Work Ready.
The Workforce Development office has also just launched a great new initiative focused on a jobs sector identified by the Georgia Competitiveness Initiative as one that we should work on, that is, making sure we have the skilled tradespeople companies need. Governor Deal announced the Go Build program this January, encouraging people to consider a skilled labor trade and educating them on how to go about that. The program is just getting underway, and we believe it will go a long way to help fill the some 82,000 Georgia jobs projected to be open in these fields by 2016.
Finally, we do work closely with our companies to connect them, through the university system and technical colleges, with the institutions who can fill their need for new talent. Both GE Energy and NCR, for instance, have programs with Georgia Tech through the resources of the University System of Georgia (USG). Our economic development partners at the USG have a whole network of relationships that lets companies quickly access those resources.
Editor: We understand the GDEcD has a number of international offices. Please discuss the function of these offices and the role of foreign direct investment in furtherance of your mission.
Cummiskey: Foreign direct investment is very important – generally speaking, those projects involve more jobs and a higher investment number. In our last fiscal year, 23 percent of our projects were internationally generated, but they created 37 percent of our total investment dollars. So we have been very fortunate that our former governor, Sonny Perdue, and now Governor Deal have encouraged us to pursue global investment, trade and tourism opportunities. We have ten international offices, and most of them handle a mix of trade and investment. The percentage of time devoted to trade is higher in some regions like the Americas, especially for our offices in Mexico, Chile and Brazil. Canada does a pretty good mix of both, as do our offices in Korea, Japan, Beijing, China and Israel. We also have an office in the UK and one in Germany that serves the EU, and those probably see more activity in investment. We will be opening a second office in China, in Shandong Province, because it’s a booming region, and we believe that establishing a solid foundation there will open a lot of doors for us.
Editor: Do you have any final comments for our readers?
Cummiskey: We’ve been fortunate to attract a lot of business because we both have and market incredible assets like the Savannah Ports – fastest-growing in the U.S.; Hartsfield Airport – busiest and most efficient in the world; and Quick Start. These are advantages that don’t develop overnight, and we’ve had them and known how to market them for a long time. But we’re not resting on our laurels. I believe the Georgia Competitiveness Initiative and the opportunities it revealed will help enhance our competitive edge. The deepening of the Savannah Harbor and our upcoming transportation referendum give us a chance to hold on to our winning hand a lot longer. Opportunities to make a giant leap forward don’t come along every day, and we’re ready to use them to our best advantage.