4 INVESTMENT AND MARKETING PROGRAM 2012 ANNUAL UPDATE

Transcription

1 4 INVESTMENT AND MARKETING PROGRAM 2012 ANNUAL UPDATE The Planning and Economic Development Committee recommends the adoption of the recommendation contained in the following report dated December 14, 2012, from the Executive Director, Corporate and Strategic Planning. 1. RECOMMENDATION It is recommended that: 1. This report be circulated by the Regional Clerk to local municipal economic development officers, chambers of commerce and board of trade. 2. PURPOSE This report updates Council on the progress of the Investment and Marketing program in 2012 and outlines direction for the 2013 program. 3. BACKGROUND Foreign Direct Investment (FDI) is a critical component in the economic prosperity and growth of York Region and the local municipalities York Region is a major jurisdiction for attracting Foreign Direct business Investment (FDI) into the Greater Toronto Area (GTA), Ontario, and Canada. Over the last three years close to 35 foreign companies publicly announced new investments, expansion or Mergers and Acquisitions (M&A) across York Region. Some of these investments were made by leading multinational corporations such as IBM, HP, Huawei, Primus Telecom, Teva, GE, Siemens, Alexion Pharma, SunEdison/Flextronics, Sungrow Solar, Honda, Volvo, the Bank of China and FedEx. These investments have a roughly estimated business value of over $1 billion and created hundreds of net new jobs locally. Additional smaller scale foreign business investments likely also take place in York Region though difficult to track as information is kept private by the companies. Staff estimates that up to one in 10 jobs in York Region are now with foreign-owned companies. Fifty-five per cent of the foreign companies operating locally are headquartered in the U.S., over 25 per cent in Europe and over 15 per cent are from Asia. U.S. companies, however, account for up to 75 per cent of total local employment by foreign businesses.

2 The industry clusters of Information and Communications Technology (ICT), Financial, Insurance and Business Services and Life Sciences jointly account for 65 per cent of total employment by foreign companies operating locally. A changing investment environment increases pressure on municipal jurisdictions to proactively engage in targeted investment attraction Government budget cuts during 2012 also affected Federal and Provincial agencies involved in attracting Foreign Direct Investment (FDI), increasing pressure on local and regional municipalities to engage in targeted investment attraction focused on community specific goals and opportunities. At the same time competition for international investments is growing, with large municipalities in Canada and the U.S. taking an increasingly aggressive approach to business attraction. Many of these municipalities operate arms-length economic development or investment attraction agencies that are well resourced and flexible in terms of operations and communications strategies. Municipalities in the Greater Toronto Area (GTA) also face a competitive environment for retention and expansion of existing employers. Municipal economic development agencies from other parts of Ontario and Canada, as well as the U.S., now openly target the GTA for business and talent attraction. GTA municipalities are responding to these pressures and have been expanding focused investment attraction efforts. The City of Toronto has a sizable arms-length agency dedicated to international investment and the municipalities of Mississauga, Halton Region and Durham Region recently added staff dedicated to investment attraction. Recognizing the changing competitive environment York Region already introduced a hybrid investment attraction and business expansion program in 2010 in partnership with the local municipalities. The investment and marketing program is key to delivering on goals articulated in the Council approved Economic Development Action Plan York Region s Investment and Marketing program (Invest in York) is focused on the promotion and facilitation of business investment and expansion in the Region s local municipalities. The program is delivered by the Economic Strategy Branch within the Office of the Chief Administrative Officer. The program is a core activity that directly supports the Economic Vitality strategic priority area of the Region s Corporate Strategic Plan, as well as serves as a key vehicle for delivering the Regional Economic Development Action Plan, approved by Council in December The Action Plan is focused on innovation as a key theme and sets out a strategic course of action for Regional economic growth, among others by supporting business retention, expansion and attraction in key sectors as well as through increased marketing and awareness building efforts.

3 Delivered in collaboration with local municipalities the program aligns with, and reinforces, investment attraction patterns, growth industry clusters and strategic municipal priorities by leveraging Regional level strengths and economics of scale to facilitate business growth. Investment attraction marketing activities target companies outside the Region whereas local business support efforts target expansion-ready companies within York Region. The program focuses primarily on technology and knowledge-based sectors of Information and Communications Technology (ICT), Life Sciences, Clean Technologies and Advanced Manufacturing. Invest in York s activities are grouped into the following core elements: Targeted business investment prospecting, lead generation and servicing Identification and support of local companies expanding by reinvestment or export Investment partnerships development in York Region, Canada and internationally Marketing and awareness building to promote York Region as a location of choice Research and data to support investment marketing and local economic development Services provided by program staff can be categorized into the following key areas: Business-to-Business (B2B) matchmaking Business development advisory and support Corporate visitation programs Economic and business information Export/expansion readiness assessments Location selection assistance Information and guidance on incentive programs available to local businesses 4. ANALYSIS AND OPTIONS The Investment and Marketing program implements a comprehensive strategy to facilitate local business expansion and attraction consisting of marketing, sales, partnering and economic research activities and tools. Growth companies from both within and outside York Region are identified, engaged and researched by staff to determine their interest and capacity to expand their business locally. The program s business development advisors then work closely with qualified clients to facilitate their growth plans as per case requirements, including business advisory support, service referrals and business-to-business introductions. The program engaged in 2012 over 200 York Region companies, in priority sectors, to support business expansion through reinvestment or export A core mandate of York Region s Investment Program is to facilitate growth of local expansion-ready companies through reinvestment or export development. This work is

4 carried out in collaboration with partners in the private, non-profit and public sectors to address client-specific business gaps and needs. Local municipal economic development offices play a key role in this component of the program, referring their clients to regional staff for joint support with export/expansion needs, or by assisting clients with real estate needs within their community. During 2012 the program s business development advisors contacted and engaged 205 companies from across York Region with an estimated 9,100 employees in total, and provided them with preliminary information or resource referrals. About 30 per cent of the businesses engaged are manufacturers and 70 per cent provide services. About a third of all these companies conduct research and development (R&D) locally. Figure1 outlines local client engagements in 2012 by location municipality: Figure Engagement of York Region Companies by Location Municipality Northern Six Municipalities 16% Richmond Hill 16% Markham 35% 68 Vaughan 33% Thirty of those companies engaged by staff were qualified and supported through the program on an in-depth basis to facilitate their business or corporate development plans, thus directly impacting local job retention or expansion through the program. Figure 2 outlines local in-depth client support and consultations in 2012 by industry cluster:

5 Figure Business Consultations with York Region Companies by Industry Cluster Building Products & Services 6% Food Products 6% Other 11% Information & Communications Technology (ICT) 32% Electrical & Electronic Products 6% Automotive Parts 10% Life Sciences 10% Energy & Environment 19% Staff made 215 direct contacts with new investment prospects and serviced 54 leads to position York Region as the business location of choice Engagement of potential investment prospects is carried out through a wide range of strategies including direct marketing, business meetings at industry events, partnered trade missions and incoming inquiries/referrals. Key lead generation initiatives undertaken in 2012 included business networking and engagements at 20 domestic trade events, targeted activities focused around six U.S. industry events, and a partnered technology business mission to Finland led by the Town of Newmarket and Southlake Regional Health Centre. Prospecting activities continued to focus primarily on growth and knowledge-based industry clusters in York Region such as Information and Communications Technology (ICT), Life Sciences and Healthcare Technologies and Clean Technology (CleanTech). During 2012 program staff directly engaged 215 corporations from outside York Region to promote the Region as a business location of choice for new investment. About 70 per cent of prospecting contacts were service-based businesses and 30 per cent manufacturers. Figure 3 and Figure 4 below provide a breakdown of investment contacts made by geographic origin and sector. Program staff continued to work with 54 of the contacts that were qualified as leads with a varied degree of interest in expanding their businesses in the Greater Toronto Area or York Region. Sixteen of those received extensive support as per their specific requirements. Three of the leads handled in 2012 established preliminary presence in the

6 Region whereas a fourth successful case is a result of work that started with the client in Figure External Investment Attraction Business Engagements by Company Origin Canada 15% Asia-Pacific 3% Other 1% U.S. 56% Europe 25% Figure Investment Attraction Business Engagements by Industry Cluster Machinery 2% Other 12% Food Products 2% Information & Communications Technology (ICT) 34% Financial Services 3% Energy & Environment 20% Life Sciences 27%

7 In 2012 program staff directly supported business retention, expansion and attraction of a total of 34 companies, impacting over 1,400 local jobs In collaboration with local municipalities and external partners the program assisted six local companies expand their business, facilitated the attraction of four new businesses to the Region and helped secure $1 million in funding for local companies. Overall in 2012 the program assisted 34 existing and new client companies with their business retention or expansion needs, impacting over 1,400 local jobs. Below are select examples of client success stories: A wireless applications software firm moved into York Region creating five new technology jobs in Markham. This followed extensive work with the company and a location search in three municipalities in collaboration with local economic development staff An Aurora based bio-medical R&D and manufacturing company will be hiring five new employees, including two scientists, as a result of targeted service introductions made by the program in mid The client has been referred to regional staff by the Town of Aurora Economic Development Office Through a new service partnership launched in 2012 the program facilitated 14 applications for government incentives from six York Region companies in Markham, Aurora and Newmarket, resulting in up to $1 million in funding for business expansion A Newmarket based manufacturer of innovative building products secured export financing as a result of service referrals made by the program, allowing it to expand its U.S. sales and create up to four additional jobs A UK-based supplier of healthcare products co-located with its business partner in Newmarket, with plans to expand their local presence in the next two years. The client has been introduced by Regional staff to the Town of Newmarket for follow-on support The City of Markham assisted a leading technology firm with over 100 local jobs to address an immediate real estate need following an engagement and referral of the client by program staff. This case demonstrates the importance of joint local-regional efforts to support quality employers in York Region with business retention needs and the meaningful impact the program is having on the local economy by retaining quality local jobs. A private consulting firm and a Crown Corporation providing financial services both established preliminary presence in York Region (Markham) to service their local client base, following extensive support and introductions by program staff Since program operations began in 2010, the program has directly impacted an estimated 4,200 local jobs in targeted growth sectors in the Region. An estimated 500 of these, as reported by clients, were new jobs created through 15 business investment or expansion projects facilitated by the program, across six local municipalities in York Region.

8 Program partnerships with the Region s local municipalities facilitate business attraction, client support, and external awareness building In 2012 program staff continued to work closely with the Region s local municipalities to support business growth and external awareness building. A partnered delivery model results in more effective support of clients and more robust awareness building vis-à-vis external partners to drive business growth and attraction. Key examples of Regional municipal partnered initiatives in 2012 as part of the program include: Thirty-five of the corporate calls or new client meetings in 2012 were held in collaboration with local municipalities and other local stakeholders such as venturelab regional innovation centre. Select client success stories resulting from this work were outlined in the previous section. April 2012: The Region coordinated and delivered in partnership with local municipalities a joint investment attraction showcase presentation to staff within the Investment Division of Ontario s Ministry of Economic Development and Innovation (MEDI). This initiative generated increased awareness of Provincial government staff of York Region s business advantages, resulting in closer work relationships, including several cases of client referrals by the province April 2012: Government funding workshop for local economic development officers May 2012: Presence at the Ontario Centres of Excellence (OCE) Discovery 2012 innovation showcase on behalf of local municipalities June 2012: Export development workshop in partnership with the Small Business Enterprise Centres across York Region June 2012: MedEdge 2012 life sciences business summit in partnership with venturelab and the Town of Richmond Hill September 2012: Joint life sciences business delegation to Finland led by the Town of Newmarket and Southlake Regional Health Centre October 2012: Richmond Hill business showcase follow-up at Demogala 2012 technology conference in Denver, Colorado. Organized by Richmond Hill Economic Development as follow-up to a joint Region-Town activity in 2011 During 2012 staff also continued to develop an extensive external contact network with private, non-profit and government stakeholders, client service partners and investment attraction multipliers in the GTA, Ontario, Canada, and internationally. Invest in York website traffic up 30 per cent. Marketing communications toolkit drives awareness building of York Region as a business hub Staff continued to expand and upgrade an integrated marketing toolkit that promotes York Region as a location of choice for business expansion and investment. The toolkit consists of a dedicated business information website, print brochures, factsheets and

9 presentations and is key to providing effective support to local and foreign businesses who consider York Region for investment or expansion. Significant progress was made in 2012 in online business promotion of York Region. The Invest in York website ( now serves as a one-stop source for communicating business information on the Region and its local municipalities to facilitate local growth and investment. The website attracted 30 per cent more traffic (unique visitors) in 2012 than the previous year, with about 50 per cent of visits originating from corporate domain sources, of which 30 per cent from outside Canada. These results reinforce the importance of a stand-alone marketing website for York Region that targets primarily business audiences both within and outside the region, differentiated from the resident-facing york.ca municipal government portal. Focused research on the Region s economy and business community enhanced marketing strategies and client servicing In 2012 emphasis was placed on further enhancing investment marketing, awareness building and client servicing through focused research on growth industry clusters in the Region. Data generated is shared with local municipalities in support of their programs. Key research initiatives undertaken by program staff in 2012 include: Development of a segmented database of York Region ICT companies containing over 2,200 records Development of a segmented database of York Region Life Sciences companies containing 250 records Identification and analysis of over 300 foreign-owned companies operating in the Region Benchmarking analysis of data on business establishments by Statistics Canada 2013 program will continue targeted outreach in priority sectors and markets, with increased emphasis on awareness building marketing 2013 program activities will continue to prioritize targeting, engagement and servicing of local companies and investment prospects, primarily in knowledge-based growth industry clusters including Information and Communications Technologies (ICT), Life Sciences, Clean Technologies and Advanced Manufacturing. Broad geographic focus for investment attraction outreach and activities will continue to be primarily the U.S. and Canada, to align with investment and business attraction patterns in the Region. Companies from other markets such as Asia and Europe will also be selectively targeted through desktop marketing, meetings in North America and third party partners or consultants. Partnered business missions initiated by local municipalities may also be considered on a case-specific basis.

10 A detailed marketing communications plan has been prepared for 2013 and will be implemented in collaboration with local municipalities, as required. Key marketing initiatives for 2013 include: A common message marketing campaign focused on the ICT cluster in York Region, delivered by an external consultant, to drive local and international awareness building for the Region in this key sector, as well as generate quality investment leads Invest in York website upgrades and content enhancements to expand the scope and quality of information available to the business community about York Region Introduction of an Invest in York business e-newsletter and dedicated social media channels such as LinkedIn and Twitter to improve targeted communications with the business community both within and outside York Region Link to Key Council-approved Plans York Region s approved Vision 2051, Regional Official Plan, and Corporate Strategic Plan all recognize the importance of a vital and growing economy. The Investment and Marketing program is a core activity that directly supports the Economic Vitality strategic priority area of the Strategic Plan. More specifically it supports the Plan s objectives of increasing employment opportunities for those living in York Region, positioning York Region as the Region of Choice for innovative growing employment sectors and sustaining protection of employment lands. 5. FINANCIAL IMPLICATIONS The 2012 program net budget of $505,000 includes the cost of five full-time staff and program expenses for business expansion and attraction advisory services, economic research, and awareness building marketing. The Region s $100,000 contribution to the Greater Toronto Marketing Alliance (GTMA) in 2012 was also channelled through the program for a total program budget of $605, LOCAL MUNICIPAL IMPACT York Region s Investment and Marketing program is executed in close collaboration with local municipal economic development offices and in partnership with the business community across the Region. Collaborative areas of work include joint client support and awareness building to facilitate local business investment and growth. The program is designed and executed to align with, and reinforce, investment attraction patterns, growth industry clusters, and economic development goals unique to the Region and its local municipalities. Program staff is focused exclusively on leveraging and marketing business and economic strengths specific to York Region, thus extending the

11 outreach, exposure and service capacity of the local municipalities in the context of an increasingly competitive investment attraction environment. Feedback on the program from local municipal partners and the business community continued to be extremely positive in In 2013 program staff will further solidify delivery partnerships to promote strategic employment growth across York Region. 7. CONCLUSION Foreign Direct Investment (FDI) is a critical component in the economic prosperity and growth of York Region and its local municipalities. Up to one in 10 jobs in the Region are now with foreign-owned companies with the sectors of ICT, Financial, Insurance and Business Services, as well as Life Sciences leading in terms of local employment by foreign companies. York Region s Investment and Marketing program (Invest in York) is a core activity that directly supports the Economic Vitality priority area of the Region s Corporate Strategic Plan as well as the new Council approved Economic Development Action Plan, focused on innovation as a key theme. The program leverages York Region s economics of scale, strong industry clusters and unique business advantages to facilitate business growth in the local municipalities. The program demonstrated solid results in 2012, directly assisting 34 companies with an estimated total of 1,400 local jobs. Since 2010 the program impacted an estimated 4,200 local jobs in total, 500 of which were new jobs generated through 15 business investment or expansion projects facilitated by staff, in six local municipalities across York Region. Feedback from local municipal partners and the business community continues to be extremely positive. In a relatively short period of time the Region s Investment and Marketing program positioned itself as a valuable partner in facilitating business retention, expansion and attraction across York Region. The 2013 program plan builds upon the momentum and increased focus achieved in 2012 in such areas as sectoral targeting, client qualification, partnering and online marketing to engage and work with local companies and investment prospects seeking to expand their business in York Region. For more information on this report, please contact Robert Unterman, Manager Investment and Marketing at (905) , Ext The Senior Management Group has reviewed this report.