Not too many decades ago, economic development was spurned by local banks, utility providers, and real estate companies. As banks became regional and national in scale, many communities lost economic development leadership and, subsequently, hired their own economic development agencies in the U.S., all competing for business expansion. A recent study in Central Ohio indicates that airports have worked to do when it comes to ensuring that economic development groups have a clear appreciation for the role local airports can play in their efforts.
The role of these economic development agencies is to retain business, to attract new business, and to foster entrepreneurship. The role of the local Chamber of Commerce, generally, is to promote business patronage by local consumers and customers. The airport’s role is to provide access to the local community; to function as a gateway to local industry and commerce; and, in some instances, provide real estate for industrial parks.
Recently, the Columbus Regional Airport Authority (CRAA), in a joint effort with the Ohio State University Airport, conducted a survey of economic development agencies. The focus: their perception of the importance of airports within central Ohio, and their perception of the role airports play in economic development.
Columbus, OH has significant airport assets — Port Columbus Inter-national, Rickenbacker, Ohio State University (OSU) Airport, and Bolton Field within the metropolitan area, and airports in surrounding counties.
The survey of economic development (ED) departments and agencies was conducted to measure, from their perspective, what attributes are important for the recruitment of new business. Such agencies typically tout the physical and economic attributes of a community (highway access, labor force, utility costs) which benefit businesses in the process of site selection.
The survey was sent to 53 area economic development departments and Chambers of Commerce, representing 31 jurisdictions in central Ohio; 30 percent responded. Each was asked:
- number of employees dedicated to economic development;
- the size of their annual budgets;
- to rank which attributes are important to recruitment of new business to their jurisdiction; and
- to rank impediments to economic development.
Responding ED agencies ranged in size from small rural towns to large cities. Annual budgets dedicated to economic development ranged from $50,000 annually to $1.5 million annually. Most ED agencies had one to two employees; a few had more than ten.
ED agencies were asked to rate the relative importance of 12 location factors on a scale of one (high) to 12 (low). The responses for each factor were averaged and then sorted by rank (see table below).
Economic development agencies rank commercial service airports eighth in the list of location factors. General aviation airports ranked last or twelfth on the list. A survey of businesses for a related CRAA study (table, page 27), in the same geographic area, indicates that businesses ranked commercial service airports fifth in the list of location factors and general aviation airports eleventh. When comparing the two sets of data, it’s apparent that there is a disparity in the perceived role airports play in economic development. Businesses give a higher ranking to commercial service airports than do ED agencies. Businesses also rank general aviation airports slightly higher.
The disparity is not too surprising, since business leadership has a better understanding of the “pulse” of their transportation requirements. According to a USA Today article, high-tech companies need 50 percent more air transportation than do basic manufacturing industries. Further, deeper analysis of the CRAA business survey responses indicates the professional and technical services industry sector and financial, insurance, and real estate (FIRE) sector ranked a commercial service airport as second on the list of location priorities — well above the overall business ranking of fifth.
In addition to the mailed out survey, an analysis of the content of the websites of the surveyed ED jurisdictions was undertaken. A total of 52 websites were examined to determine what references were made to airports in the region. For each website, it was determined: if airports were mentioned; if the distance to the airport was noted; any negative comments on airports; and, if any links to airport websites were provided.
The analysis found airports do not generally hold places of prominence on these websites — not unexpected, given the low relative importance most agencies placed on airports in the survey. Slightly more than 40 percent of the websites scrutinized listed a nearby airport. Not surprisingly, two-thirds of those listings included Port Columbus International, the major commercial airport in the region. One-third of those listings highlighted two or more airports — indicating some economic development agencies recognize the importance of GA airports.
The number of sites that provided additional information on airports dropped off significantly. Some 21 percent indicated how far away the airport is, either in terms of miles or drive time; only 13 percent provided a link.
In addition, these same organizations’ business recruitment mailout packets were analyzed to determine what references were made to airports. The review found airports, again, don’t generally hold places of prominence in business recruitment. Some 55 percent of the recruitment materials listed a nearby airport. All included Port Columbus International; 85 percent highlighted two or more airports. The materials provided additional information on airports such as distance to the airport in miles or minutes; only two provided airport website addresses.
The CRAA survey of economic development officials indicates that airports should emphasize to ED officials their role in the economic development process and join in their community’s economic development effort.
The first step in understanding economic development is to know the components of ED. These include:
- Understand location. Every location is unique. Be ready to state how the community is uniquely positioned for business. Know the major highways in the area; the markets they connect.
- Know the suppliers. Suppliers include the utilities in the community, schools and universities, health care facilities, as well as workforce.
- Know the big players. It’s important to know who the largest employers or industries are in the community and who their teammates, or suppliers, are. Are they succeeding? Is the airport utilized by these players?
- Understand Incentives. What are the state and local incentives to attract business to the community? Know and understand tax incentives, enterprise zones, urban business districts, etc.
- Keep an ear to the ground. Stay abreast of business activity and read the business section of the local paper. Attend economic development meetings to keep current and to keep them apprised of activity on the airport. Ask the UPS/FedEx delivery drivers which businesses are increasing in shipping activity. Talk to the businesses that base aircraft at the airport. Once a year, ask them how many they employ locally and if their firm has plans for expansion. Then ask what the airport can do to help them.