The pandemic has upended our usual way of doing business, which means that the typical signals we follow to identify growth companies have also been altered. But keep in mind, the original decision factors didn’t suddenly become irrelevant – it’s just that priorities have shifted. And that means that our strategy needs to shift along with it. So if you’re tracking growth companies for your attraction efforts, the following is a bit of food for thought.
You still need to start out with your fundamentals. Now more than ever, it is important to build upon your assets, whether it’s existing industries or existing skill sets that can be transformed to match today’s reality. Are you a region steeped in agriculture, marine assets, or do you have a strong university system? Is your workforce exceptionally skilled at specific trades, entrepreneurship, or notable for their engineering skills?
Once you have taken inventory of all the different types of assets you can offer, the next step is to map them out against the kind of industries that are growing since the onset of COVID. The strategy is not designed to replace your current industries but to diversify them and branch out into complementary growth sectors.
For example, despite all of the overly optimistic predictions, the automation sector had trouble taking off over the past few years. It was plagued with obstacles such as high initial capital investment, making the technology inaccessible to small and medium-sized businesses. Moreover, oftentimes there is a lack of expertise on how to integrate this new technology into existing processes within organizations. However, with all the workplace restrictions brought on by the COVID crisis, coupled with reduced price points and a wider variety of technology solutions, we are seeing a more widespread adoption of these technologies.
The table below shows the diversity of in the adoption of automation technology from the Northeast research hubs, to Midwest manufacturing centers, to the innovative regions of the West Coast.
Regions close to robotics hubs and those with a manufacturing base that is primed for automation should investigate opportunities in automation equipment and parts, along with smaller-scale customized integrator services that can help propel their industrial base forward. This strategy is especially well suited for regions that have a highly skilled trade base in electro-mechanical technology and machinery.
Other technology service sectors have also been booming this year, including: online work, remote testing software, training, virtual reality, and sophisticated cybersecurity protocols, to name a few. Regions that could offer a high concentration of technology sector jobs coupled with an attractive quality of life and cost of living can start to compete with larger metro areas for “footloose” industries.
Targets still have to match with your key industry assets. Do you have an agricultural base? Look into precision agriculture technology. Do you have a pool of education-related industries? This might be the time to push innovation in education technology with incubators and accelerators.
Understanding current industry dynamics is key to figuring out whether last year’s growth companies are slowing down and which companies could be accelerating their growth. Tracking industrial production indices and industry news reports gives you a better sense of WHEN companies might accelerate investment and start thinking about expansion activities. But in all cases, innovative companies with a healthy balance sheet before the pandemic are typically still a good bet to establish and nurture relationships with. Hunting down and connecting with these types of companies is even more important during the current economic climate.