Today's Hubs Make Way for Tomorrow's Hot Spots

But what if you want to be in on the ground floor of development success, before the multiplying hard hats and construction cranes make it clear that a location is poised for massive growth? Is there a way to predict the economic hubs of the future and select the right location for your investments and business expansion?

Expert panelists at the CoreNet Global Summit in Atlanta this fall argued that you can determine the next hot spots with the right questions and careful research into the answers. And they spotlighted dozens of cities in Asia, Europe and the Americas that offer a business climate that makes them ripe for development by growing companies.

In a session called "Around the World in 90 Minutes," these experts delivered savvy advice on what to look for and which locations are the undiscovered "sleepers" that will be tomorrow's success stories for business expansion.

Their advice on where to look comes with caveats, however. Low salaries and ample English-speaking workers will not compensate for some drawbacks, so companies need to review the options and local conditions thoroughly. Among the danger signs are inadequate infrastructure that makes telephone service or power supplies unreliable. Government regulations that are onerous or subject to rapid change are another pitfall to be wary of. High operating costs because of taxes or other considerations should also be taken into account.

With adequate advance research and insight borrowed from the panel experts, any business should be able to spin the globe and find a spot that suits their expansion or investment needs.

The Americas
Dennis Donovan of Wadley Donovan Gutshaw Consulting says the new Asian and Eastern European markets may have exotic attractions but North, Central and South America continue to have their own strong allure for outsourced call centers and manufacturing facilities. For example, Honduras is competitive with China when it comes to costs. He advises that those scouting for locations should look at places that offer benefits like political and currency stability, as well as a strong pool of bilingual workers.

Donovan, who is a renowned site selection expert, named some well-known locations as current investment hot spots: Calgary and Toronto in Canada; Dallas, Phoenix, Atlanta and Tampa in the US; Monterrey in Mexico; San Jose in Costa Rica; and Buenos Aires and Sao Paolo in South America.

But you will have to pull out your atlas to find many of the locations he identifies as future investment hot spots. They include:

• South America--Santiago, Chile; Cordoba, Argentina; Recife, Brazil; and Cartagena, Colombia.
• Mexico and Central America--Hermosillo, Mexico; San Pedro Sula, Honduras; and San Salvador.
• US--Dickinson, ND; Hermiston, OR; Bullhead City, AZ; Russellville, AR; Galesburg, IL; Marshall, MO; Grand Island, NB; Elmira, NY; Lumberton, NC; and Abbeville, SC.
• Canada--Saskatoon, Saskatchewan; Edmonton, Alberta; St. John's, Newfoundland; and Bridgewater, Nova Scotia.

Buck says countries like the Czech Republic, Poland, Ireland, Germany and Spain lead with the current development hot spots. But Buck, whose firms is one of Europe's leading independent location consulting companies, says business developers seeking low-cost alternatives should look in the following locations for the future places to be:

• Manufacturing--Istanbul, Turkey; Kiev, Ukraine; Constanta, Romania; Kosice, Slovakia and Plovdiv, Bulgaria.
• Business Process Outsourcing--Glasgow-Edinburgh, UK; Brno, Czech Republic; Debrechen, Hungary; Bucharest, Romania; and Sofia, Bulgaria.

Dennis J. Meseroll, Director of Tractus Asia Limited, says foreign direct investment (FDI) has been pouring into Asia at an increasing pace for the last few years. China captured 16% of all the FDI in emerging markets worldwide in 2006. Singapore, India and Thailand were additional hot spots for Asia.

The Asia market has some drawbacks, including less currency and political stability, but wages are low and English-speaking capability is high. Specific concerns to explore include availability and reliability of infrastructure, regulatory burdens and stability, intellectual property rights protection, supply chain efficiency and equity ownership rights.

Meseroll, who is a prominent Asia expert, directs attention to second- and third-tier cities in today's popular countries as the future best bets throughout Asia. These include:

• Chengdu, Xi'an and Chongqing, all in China.
• Kolkata, Orissa, Nagpur and Vizag, all in India.
• Hanoi and Ho Chi Minh City in Vietnam.
• Kuala Lumpur and Iskandar D.R. in Malaysia.

Eric Bowles is vice president at CoreNet Global. The views expressed in this article are the author's own.