Picking a City for Business

1. Airports

While Federal Express and UPS may be able to deliver a package anywhere overnight, and meetings can be handled by teleconference rather than face-to-face, its still nice to be close to an airport. I expect most successful businesses will want to be within 45 miles of an airport with jet service to at least 4 other cities. Turboprop service to one or two locations is just not enough. Some of the fastest growing cities in the country right now, Atlanta, Kansas City, Denver and Las Vegas, all have excellent airports.

2. Interstate Highways

While the wireless internet is bringing the information superhighway anytime anywhere, the cell towers are popping up mostly along the old-fashioned superhighways. Nextel is the first to admit that it doesn't pay to try to cover all of South Dakota with digital cellular service. Plus, most goods in the new economy will continue to be shipped by truck, so it's handy to be by a regular truck route. I expect most successful businesses will want to be within 7 miles of an interstate highway interchange.

3. An Educated Workforce

The information economy requires people who are able to manipulate the information. If they can work accurately at low wages, even better. A number of credit card and insurance companies have followed Warren Buffett's lead and moved operations from New York, Wilmington and Hartford to places like Des Moines, Omaha, Minneapolis and Fargo. Why? Because high school graduates there can read, write and figure accurately for just over minimum wage. (Actually wages are climbing now that job growth has outpaced growth in the available workforce.) For more complicated jobs than credit card billing or assembling PCs, access to good colleges is important. For companies trading internationally, workers fluent in foreign languages are important.

These are the basics. Individual companies may have specific needs related to their type of business; i.e. paper companies need to be located near forests, casinos need to be in locations where gambling is legal, etc. Once these basic requirements are met, the company should look at other factors such as the cost of land, utility costs, regulatory environment, tax laws, union rules, crime rates, traffic patterns, visibility, climate and recreation.

How does your hometown rank? Are there other important factors that you think I've missed? I invite your comments.

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