Virginia Is For Businesses?
Competition picks up to lure Bay State biz south

excerpts from an article by Livia Gershon, Worcester (Mass.) Business Journal, originally published May 11, 2009

Recently, Bradford Wyatt, general manager of Worcester cutting tools company NED Corp., got a call from the Virginia Economic Development Partnership.

Out of curiosity, he invited the group to send him some information, and he soon received a letter touting Virginia’s low taxes, good location and support for companies’ staffing needs. With it came an invitation to meet representatives from the state when they visit Massachusetts in May.

“Even if you have no immediate or short-range project plans,” the letter read, “this appointment is an excellent opportunity for you to meet Virginia economic development contacts and gather baseline information that you may need in the future.”

Bradford Wyatt, general manager of NED Corp. in Worcester, says if he were expanding he wouldn’t do it in Massachusetts.Virginia isn’t the only state using aggressive tactics to promote itself to Massachusetts businesses. And some say the Bay State is hard-pressed to fight back, given its relatively high costs and extensive government regulation.

Southern states in particular market themselves energetically, according to Andre Mayer, senior vice president for research at the Associated Industries of Massachusetts, “sometimes with not very strong arguments. ‘Come out here. We have lots of universities.’ Really? Is that a reason to go?”

So how is Massachusetts fighting back? Susan Houston, executive director of the Massachusetts Alliance for Economic Development, said state economic development staff pay visits to companies in other states, largely as part of trips centered around trade shows.

But she said the state focuses less on recruiting new companies than retaining the ones that already do business here.

For example, she said, on a recent trip to California, Gov. Deval Patrick paid visits to companies based in that state that have operations in Massachusetts.

She noted that the state also focuses on particular industries, like life sciences and renewable energy. In general, she said, since Massachusetts isn’t a low-cost state it has to differentiate itself based on attributes like sophisticated research facilities, a highly trained workforce and good access to Europe.

“Overall it’s really the value proposition,” she said.

Overall, Massachusetts’ approach to economic development actually has a lot in common with Virginia’s.

Christie Miller, a spokeswoman for the Virginia Economic Development Partnership, said her state’s governor travels to other parts of the country, and to other countries, to meet with business leaders, just as Patrick does. Miller and Houston both cited their respective states’ access to overseas transportation and strong workforces, and both said they’re working on creative marketing strategies to deal with the budget cuts that are common to state agencies across the country during the current recession.