More companies are choosing to keep information technology and finance operations close to home, rather than offshoring.
Offshoring is so 2011. At least, that’s one of two big takeaways I got from a recent Fortune magazine article on the top U.S. cities for relocating your company’s finance and IT operations. Companies as big as Verizon are realizing that moving operations to Asia, Eastern Europe and Latin America isn’t always the bargain they had hoped.
The second message was that Allentown, Pennsylvania ranked seventh in the country as a place where companies should move their operations. Fortune looked at a new study by The Hackett Group, a strategic consulting firm. The researchers studied 33 urban communities from all over the country and analyzed them according to a set of 30 criteria, including quality of the local talent market, state tax incentives, infrastructure and “overall quality of life.” To garner the seventh spot on the list, Allentown beat out cities like Charlotte, NC; Dallas, TX; Cincinnati, OH; Knoxville, TN; Louisville, KY; Memphis, TN; Eugene, OR; Salt Lake City, UT; Houston, TX; and even our neighbor to the south, Philadelphia.
To me, this is proof that businesses are realizing there are American metropolitan areas that are viable options for their home offices and operations. While labor and operating costs are still higher in the U.S. than in many offshore locations, that gap is getting smaller all the time. And there are significant benefits to staying stateside that are essential to long-term financial growth—things like having an available strong talent pool, access to solid data security and control, a reliable power grid, reduced travel costs and employee satisfaction with support services. Not to mention the enthusiastic welcome and vibrant energy companies find when they move into an emerging, small-to-mid-sized American city.
How Allentown wound up in Fortune’s article“10 best U.S. cities for your company’s finance and IT operations”
Here are the main criteria The Hackett Group used to rank cities in the report, and likely reasons why Downtown Allentown made the cut.
- The region is the fastest growing and third most populous area in the state of Pennsylvania.
- The central business district sits alongside the government district, as Allentown is the county seat.
- The greater Lehigh Valley has a population of more than 820,000 that supports diverse industries and can provide needed business services.
- Favorable travel costs thanks to a close proximity to three international airports, a 90-minute drive to New York City, and an hour drive to Philadelphia.
- With a Starbucks franchise opening this summer in the heart of downtown, the “Starbucks Effect” is a sign of sustainable economic vibrancy in this revitalized mixed-use community.
- Downtown Allentown has a distributed, redundant electric grid infrastructure that can support business operations.
- City Center alone boasts 650,000+ square feet of competitively priced Class A office space.
- Allentown’s central business district is also home to a vibrant community full of restaurants, shops, entertainment and arts venues.
- Significant economic development incentives are in place to attract new businesses and keep them here.
- City Center offers tech-friendly office spaces that are Energy Star certified and offer multiple broadband options.
- Three Fortune 500 companies call Allentown home.
- Public WiFi spots are available throughout Downtown Allentown.
- There are an estimated 15,000 businesses employing 340,000 employees in the Lehigh Valley.
- Allentown is home to a vibrant innovation hub, with City Center’s Velocity coworking space right downtown.
- There are nine local colleges and universities in the Lehigh Valley from which to recruit.
- As the third largest city in Pennsylvania, Allentown’s population is roughly 118,000.
- The attractiveness of both the urban and suburban quality of life is a huge draw for potential talent, whether they are millennials, empty-nesters or somewhere in between.
- Significant federal, state and local investments have been made in roadway and transportation infrastructure.
- Allentown’s transportation infrastructure network is within 30-90 minutes of three international airports and carries a Foreign Trade Zone status.
- There is quick access to three major interstates – I-78, I-80 and the PA Turnpike’s Northeast Extension.
- Allentown has light commuter traffic when compared to other area downtowns and industrial parks.
Those are a lot of reasons why Allentown is a great place to do business. And I haven’t yet mentioned all our environmentally sound building features (Green roofs aren’t just for putting), fun neighborhoods (Go Phantoms!), city parks (We’ve got more acres than Central Park) or world class art museum and symphony (Arts are alive). I promise more to come on those great benefits of working in Downtown Allentown in future blog posts. In the meantime, if you’d like to discuss what a City Center address can do for your business, use the contact form below to send me a note.