March 7, 2017
At the recent Connect Dallas conference, Susan Arledge with E Smith Realty spoke on the “Northward Bound, Cranes and Corporations” panel. During the session, she spoke about corporations that are targeting North Texas for their headquarters, and how the region should prepare for more. Connect Media caught up with Arledge for additional information on the topic.
Q. I remember when the Legacy Park area of Plano, TX wasn’t much more than the EDS office campus and a bunch of cows. When – and why – did this area, and the Richardson, TX area, become a hot destination for corporate relocation?
A.In general, cities historically grow north*. Cities magnify opportunities for social interaction; as they grow, the productivity of their resources and labor grows in predictable ways. For instance, when a city’s population doubles, there’s typically about a 15% increase in the city’s “output” per capita — a 15% increase in wages, a 15% increase in GDP, a 15% increase in patents, which is called “urban scaling.”
There has always been the desire for people to accumulate personal wealth, and house size typically reflects income and accumulated wealth. The way to have more space and more amenities is to continue to move to areas that are being developed. So, those moving into Dallas or moving up, look to the northern communities as a place to get more for their money. Employers, in turn, are seeking corporate locations where employees can buy more affordable housing and have a shorter commute to work as their “center of gravity.”
* Plano and Richardson, TX are north of Dallas.
Q. You’d mentioned recently at Connect Dallas that infrastructure needs to be examined when it comes to attracting more corporations to North Texas. How would this work?
A. Urbanization is often linked with economics. Increased job opportunities, a centralized market, better pay and higher individual wealth have all drawn people into cities. And for a long time, these pull factors are what caused cities to grow – and they grow where the new opportunity awaits.
When a city grows at a manageable rate, which is often considered roughly 1% annually, its infrastructure can keep pace with an increasing population and its demands. Necessities such as roads and public transportation, appropriate sewers and water treatment facilities, clinics, schools and housing have time to be planned and built alongside the increase in human numbers.
The risk of fast urban growth is that the necessary infrastructure often cannot expand fast enough to keep up with residents’ needs. Without infrastructures in place to provide basic needs, residents can be forced to create their own provisions with whatever is available.
Q. You also commented, during your Connect Dallas section, on labor issues that could be impacting corporate relocation. Will that be a problem in North Texas?
A. Literally everyone that will be hired in the next 25 years has already been born. As baby boomers leave the workforce, there just aren’t going to be enough qualified entrants from the baby-bust generation to replace them. Employers must now determine how many of which occupations will be needed, develop a common standard for work readiness, and start gathering data and intelligence on the dynamics of the local workforce. Employers will need to map the potential sources of finding qualified workers.
Companies will need to focus more on promoting from within; helping to create better aligned K-12 school systems and university programs, better aligned mid-career change employees and by recruiting from outside the community. There will be a war for talent in Dallas; however, it will much better here than in some other similar size communities, due to the continued relocation of companies into Dallas.
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