It wasn't the type of news a city and its economic helmsmen want to hear. A Swiss biotech firm, Novartis, said "no thanks" to Atlanta last month, opting to build a $600 million flu vaccine manufacturing plant in North Carolina's Research Triangle Park.
Georgia was hardly chintzy in its come-on. A prime 183-acre tract of land in Clarke and Oconee counties was on the table. So was $61 million in economic plums -- $17 million more than North Carolina anted.
Why was Atlanta jilted?
Before I answer, consider a less glamorous but very valuable company whose recent arrival in Atlanta was barely noticed by the media.
Mueller Water Products makes "water infrastructure" -- AKA pipes and fittings, a hefty $2 billion worth annually. Mueller was spun off this year by Tampa-based Walter Industries. Mueller's easy decision would have been to stay near its parent in Florida.
Sitting on Mueller's board, however, was an Atlanta cheerleader, AirTran CEO Joe Leonard. He says Mueller wanted "proximity to its production facilities in Birmingham, [Ala.], and Chattanooga, [Tenn.]," and Nashville was a leading contender. But the deciding factor was Leonard introducing Mueller to the Metro Atlanta Chamber of Commerce.
"I told [Mueller executives] they'd get first-class treatment," Leonard recalls. "And they did."
(Ironically, AirTran's hub is in Atlanta, but its headquarters is in Orlando. I ask Leonard when he's moving to the Big Peach. "I've been hearing a lot about that from Shirley [Franklin] and Sonny [Perdue]," Leonard laughs. "Maybe. Someday.")
Novartis and Mueller define the horns of Atlanta's dilemma. We have great pitchmen, often from the city's 14 Fortune 500 companies. With those veteran dealmakers, it's inevitable Atlanta will grab a share of start-ups and relocations. It's just those super-whiz-kid outfits that seem to slip away.
We also have unrivaled assets. As Atlanta Chamber President Sam Williams told USA Today in June, rivals would have to "put Hartsfield [Jackson International Airport] on wheels and roll it up the interstate" for us to lose our most potent trump card.
At the same time, concedes the Chamber's top economic development exec, Hans Gant, we're perceived -- erroneously -- as not having a critical mass of "industries of the mind."
Why should you care? The type of business Atlanta attracts, even more than the number and size of firms, will determine whether we live in a vibrant community that can afford to invest in education, transportation, culture and quality amenities.
"High-wage, high-skilled, high-education jobs, that's the future. Without those kinds of jobs, we will not be a great city," says Russell Allen, who runs BioSouth Inc. in Norcross, a non-profit he calls "a speed-dating service" matching up emerging research companies with pharmaceutical giants and distribution companies.
Hans Gant is where the buck stops -- or, more accurately, where bucks begin flowing to Atlanta. Gant brandishes documentation that Atlanta garnered a net increase of 69,000 jobs last year. He hands over a snappy looking booklet, explaining, "The Georgia Research Alliance has invested a half-billion dollars in attracting eminent scholars in the technology and biotech fields, people at the top of their fields." He recites a list of corporate relocation victories -- GE Energy, EarthLink, Cingular, Hewlett-Packard, Samsung, plus many lesser-known names.
Gant knows how to play his cards, and his deck has dozens of aces. When Novelis, a multinational aluminum manufacturer, was shopping cities, the Chamber dispatched Lowery Kline, CEO of Coca-Cola Enterprises. Coke is one of Novelis' major customers -- the deal was done.
"Overall, we're doing pretty damn good," Gant says. "Do we need to think long-term? Absolutely yes. The global economy is changing in front of our eyes."
When North Carolina won the Novartis deal, no one slammed Atlanta -- publicly. A relocation consultant involved in the decision, who spoke on background, says the decision was "safe. There's a base of similar companies such as GlaxoSmithKline in the Research Triangle. You have a work force educated to the needs of the biotech industry."
Interpreted: Novartis knows that North Carolina began years ago investing in education that trains skilled workers in high-tech and biotech fields. Georgia is light years behind rivals such as Texas, Florida and North Carolina in such training. And, unlike North Carolina, we don't even have a state master plan to develop the tech industry base -- despite Gov. Sonny Perdue's claims that he's a leading advocate for an "innovation"-based economy.
Another irksome problem is that companies play states against each other for big incentive packages. That's not likely to end, unless the states agree to put away the wallets stuffed with taxpayer cash.
Short of that, Gant says, "incentives typically are structured around manufacturing. That's OK, but if we want to grow high-tech and biotech IOMs, we need incentives that target those businesses."
North Georgia's great strengths are its universities -- Georgia Tech, Emory, UGA, Georgia State, Morehouse. We also boast the Centers for Disease Control and Prevention, with its awesome uniqueness in biotech exploration. We do have that critical mass of smart people making creative strides.
"We've engaged the universities, and we're building the central focus of economic development around them," says Frank McDaniel, a lawyer who specializes in biotech firms.
The basics still work against us, however. "Do things like [public] schools hurt us?" muses Gant. "Absolutely, but not to the point where we'll stop growing. Traffic is not a deciding factor, but the question is asked more and more often. No doubt, these things need urgent attention."
Gant counts the items on fingers, and adds: "And we don't do a good enough job telling our story."
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