Forbes: Best States for Business: Oregon, 6th. (Portland, Hillsboro: middle-class, transporting)
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Interesting, considering all the talk on here of Oregon's anti-business mentality and tax structure..........something I regularly disagree with...
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Disclaimer - Forbes is not, by any means, the end all be all decider. This is just an interesting measure to be discussed.
Last edited by kapetrich; 10-21-2010 at 04:26 PM..
10-21-2010, 10:25 PM
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The ranting comes mostly from people who are completely ignorant of how other states operate and people who don't feel they should ever have to pay any taxes or fees on anything ever.
Does Oregon have its share of problems? Yes. Enough to justify all the whining and crying? Not even close.
OK, lets make this simple. Do businesses really need a magazine to tell them where to invest and grow or do you suppose that a group of investors might do their own research before investing a butt load of money and taking a risk? I think its the latter. Now, how many businesses are pouring into Oregon to expand, start up or branch out? OK how many are running to OR? Alright how many are trickling in bit by bit? OK how many are looking at what OR has to offer and are saying smell you later?
Ah reality trumps pie in the sky again.
OK, lets make this simple. Do businesses really need a magazine to tell them where to invest and grow or do you suppose that a group of investors might do their own research before investing a butt load of money and taking a risk? I think its the latter. Now, how many businesses are pouring into Oregon to expand, start up or branch out? OK how many are running to OR? Alright how many are trickling in bit by bit? OK how many are looking at what OR has to offer and are saying smell you later?
Ah reality trumps pie in the sky again.
Actually, these types of articles, from influential news outlets and magazines, DO influence businesses perceptions subconsciously and consciously. It is called "buzz" and it is VERY important. That said, its by no means the only factor, but lets not fool ourselves into thinking it doesn't affect the region in anyway. Take a look at 'buzz' locations after forbes, newsweek, travel magazines and the like publish articles on their 'top 10' dream locations or best places to invest.
"Intel has unveiled a plan to expand their manufacturing facilities in Hillsboro, Oregon. The investment will range from $6 billion to $8 billion, create 6,000 to 8,000 construction jobs in the process, and establish 800 to 1,000 permanent jobs upon completion."
OK, lets make this simple. Do businesses really need a magazine to tell them where to invest and grow or do you suppose that a group of investors might do their own research before investing a butt load of money and taking a risk? I think its the latter. Now, how many businesses are pouring into Oregon to expand, start up or branch out? OK how many are running to OR? Alright how many are trickling in bit by bit? OK how many are looking at what OR has to offer and are saying smell you later?
Ah reality trumps pie in the sky again.
How many businesses are looking to Oregon? Not many. Now, simple geography starts to tell us why. Oregon (and Washington) are far up in the Northwest corner of the country, far away from everywhere, everyone, and everything else. Shipping up the Columbia from the Port of Portland is only so effective, and water transportation is the 2nd cheapest form of transportation, after a pipeline. After water, is rail, then truck, then air is the most expensive for moving goods. So does it make sense to locate a manufacturing facility (for example) closest to where most of the consumers are or places with better transportation infrastructure (more than terrible I-5 and I-84)? Probably... Like California, Texas, Georgia, Illinois, Michigan, New Jersey... And so on. Also, in business, like attracts like. So there were a lot of green businesses and shoemakers in Portland... That's going to attract more, and has been attracting more of those kinds of startups. Keep your friends close and your enemies (or competitors) closer, they say.
So, even if Oregon offers a comparable business and tax climate to somewhere back east, the place back east or overseas will probably win out, unless they're a company that isn't reliant on transporting goods long distances (Nike HQ, Daimler Trucks North America HQ), or charges a premium for their product (Intel), or has interests in the local green industry (Vestas), or very strong ties to Asia (Li-Ning), or just needs to locate a call center (Royal Caribbean). Otherwise... Why the hell would anyone want to locate in Oregon, unless our corporate tax rate were zero? It just wouldn't make sense.
How many businesses are looking to Oregon? Not many. Now, simple geography starts to tell us why. Oregon (and Washington) are far up in the Northwest corner of the country, far away from everywhere, everyone, and everything else. Shipping up the Columbia from the Port of Portland is only so effective, and water transportation is the 2nd cheapest form of transportation, after a pipeline. After water, is rail, then truck, then air is the most expensive for moving goods. So does it make sense to locate a manufacturing facility (for example) closest to where most of the consumers are or places with better transportation infrastructure (more than terrible I-5 and I-84)? Probably... Like California, Texas, Georgia, Illinois, Michigan, New Jersey... And so on. Also, in business, like attracts like. So there were a lot of green businesses and shoemakers in Portland... That's going to attract more, and has been attracting more of those kinds of startups. Keep your friends close and your enemies (or competitors) closer, they say.
So, even if Oregon offers a comparable business and tax climate to somewhere back east, the place back east or overseas will probably win out, unless they're a company that isn't reliant on transporting goods long distances (Nike HQ, Daimler Trucks North America HQ), or charges a premium for their product (Intel), or has interests in the local green industry (Vestas), or very strong ties to Asia (Li-Ning), or just needs to locate a call center (Royal Caribbean). Otherwise... Why the hell would anyone want to locate in Oregon, unless our corporate tax rate were zero? It just wouldn't make sense.
This is a very fair point. Location, location, location. Also, as you said, transportation corridors and ready infrastructure play a huge rule as well - it'll be almost impossible for the PNW to ever compete with the New York's, Texas's and Jersey's purely based on population and geography...... That said, this 'study' took in factors like business costs, labor rankings, economic climate, growth prospect, quality of life, etc. (quality of life being one of the MOST important for businesses in years to come) which is a very different way of setting up the issue.
Actually, these types of articles, from influential news outlets and magazines, DO influence businesses perceptions subconsciously and consciously. It is called "buzz" and it is VERY important. That said, its by no means the only factor, but lets not fool ourselves into thinking it doesn't affect the region in anyway. Take a look at 'buzz' locations after forbes, newsweek, travel magazines and the like publish articles on their 'top 10' dream locations or best places to invest.
"Intel has unveiled a plan to expand their manufacturing facilities in Hillsboro, Oregon. The investment will range from $6 billion to $8 billion, create 6,000 to 8,000 construction jobs in the process, and establish 800 to 1,000 permanent jobs upon completion."
That's pretty interesting.....
Yes, and every high paying permanent job created as a result of the expansion will be imported from India. Because that's just how Intel rolls.
The reality is this magazine article is based on things that separate ideals from reality. Oregon has a habit of giving huge breaks to large companies (Intel, T-Mobile, Facebook) to lure them in under the guise that it will create jobs and stimulate the economy....and then these companies don't actually provide a lot of benefit. Intel only hires foreign workers because they abuse the H1(b) program. T-Mobile agreed to build a call center in Redmond in exchange for a few years of huge tax breaks...and when those breaks were about to expire, threatened to close it unless they were extended. Facebook demanded a myriad of concessions.
Oregon isn't friendly to business. Oregon is friendly to some business.
How many businesses are looking to Oregon? Not many. Now, simple geography starts to tell us why. Oregon (and Washington) are far up in the Northwest corner of the country, far away from everywhere, everyone, and everything else. Shipping up the Columbia from the Port of Portland is only so effective, and water transportation is the 2nd cheapest form of transportation, after a pipeline. After water, is rail, then truck, then air is the most expensive for moving goods. So does it make sense to locate a manufacturing facility (for example) closest to where most of the consumers are or places with better transportation infrastructure (more than terrible I-5 and I-84)? Probably... Like California, Texas, Georgia, Illinois, Michigan, New Jersey... And so on. Also, in business, like attracts like. So there were a lot of green businesses and shoemakers in Portland... That's going to attract more, and has been attracting more of those kinds of startups. Keep your friends close and your enemies (or competitors) closer, they say.
So, even if Oregon offers a comparable business and tax climate to somewhere back east, the place back east or overseas will probably win out, unless they're a company that isn't reliant on transporting goods long distances (Nike HQ, Daimler Trucks North America HQ), or charges a premium for their product (Intel), or has interests in the local green industry (Vestas), or very strong ties to Asia (Li-Ning), or just needs to locate a call center (Royal Caribbean). Otherwise... Why the hell would anyone want to locate in Oregon, unless our corporate tax rate were zero? It just wouldn't make sense.
Notable companies who set up shop in Seattle, in spite of it being, technically, even more remote than Oregon:
Microsoft
Amazon
Dendreon
Tommy Bahama
Expedia
T-Mobile
F5 Networks
Salesforce.com
Nintendo
Eddie Bauer
Boeing
Starbucks
Mike's Hard Lemonade
Cray
Vulcan
Getty Images
Safeco
Real
Plum Creek
Weyerhaeuser
Nordstrom
Car Toys
Union Bay
Holland America
Alaska Airlines
Costco
REI
Red Robin
UPS
Clearwire
Oberto
Kenworth
And these are just the ones I can think of off the top of my head. The "we're too far from anyplace" argument holds absolutely zero weight. So if Oregon is a better place for business than Washington....why are all the businesses setting up or basing out of Washington?
Yes, and every high paying permanent job created as a result of the expansion will be imported from India. Because that's just how Intel rolls.
The reality is this magazine article is based on things that separate ideals from reality. Oregon has a habit of giving huge breaks to large companies (Intel, T-Mobile, Facebook) to lure them in under the guise that it will create jobs and stimulate the economy....and then these companies don't actually provide a lot of benefit. Intel only hires foreign workers because they abuse the H1(b) program. T-Mobile agreed to build a call center in Redmond in exchange for a few years of huge tax breaks...and when those breaks were about to expire, threatened to close it unless they were extended. Facebook demanded a myriad of concessions.
Oregon isn't friendly to business. Oregon is friendly to some business.
Why does Intel have to import all those people from India? Perhaps because the State of Oregon has been disinvesting in education throughout the years? The Oregon University System has one of the lowest percentages of state funding of any public university system. Spending per child in Oregon on primary and secondary education is one of the lowest in the country. Our classroom sizes are among the highest. Portland Public Schools has one of the worst dropout rates of any urban district in the country (worse than places like New York City) AND the population it serves is majority middle-class, white, and native English speaking, to boot.
If you don't have the educated workers, you're not going to get the high-paying jobs that require educated workers. Add to that the brain drain to Seattle and San Francisco and elsewhere...
As a state we really need to ask what our priorities are here. Education is crucial to the contemporary economy and we need to address the problems we have properly.
That said, I didn't yet look at our labor rankings according to Forbes... That might be interesting for me to take a gander at.
Notable companies who set up shop in Seattle, in spite of it being, technically, even more remote than Oregon:
Microsoft
Amazon
Dendreon
Tommy Bahama
Expedia
T-Mobile
F5 Networks
Salesforce.com
Nintendo
Eddie Bauer
Boeing
Starbucks
Mike's Hard Lemonade
Cray
Vulcan
Getty Images
Safeco
Real
Plum Creek
Weyerhaeuser
Nordstrom
Car Toys
Union Bay
Holland America
Alaska Airlines
Costco
REI
Red Robin
UPS
Clearwire
Oberto
Kenworth
And these are just the ones I can think of off the top of my head. The "we're too far from anyplace" argument holds absolutely zero weight. So if Oregon is a better place for business than Washington....why are all the businesses setting up or basing out of Washington?
Answer: Because it's not.
Tech/online (doesn't rely on transportation), apparel (it's all manufactured in China, not Washington), and headquarters (having a Starbucks on every block doesn't really count). Boeing relocated to Chicago because the State of Washington wasn't bending to their demands as much as they would have liked, and airplanes can really be built anywhere there is cheap power, since they're such a big ticket item. UPS is based out of Sandy Springs, Georgia and has been out of state for quite some time, and has hubs everywhere... Here in Portland, down in Medford...
The kind of companies that bring in large quantities of middle-class jobs aren't really showing up too much there in your list, but Seattle is a lot more well off than Portland thanks to all the tech, and maybe even all the white-collar corporate headquarters type jobs.
But I am betting much of the Microsoft workers were drawn from all over the country and world, much like Intel's workforce is.
So basically... Why Washington and not Oregon? Well, at least more corporate headquarters get set up there, right? Because that's not dependent on location? I am not totally familiar with the ins and outs of WA's and OR's corporate tax structures, but that might be something to look at for comparison...
And I would say WA is more business-friendly than OR. There is also the quality of life factor that kapetrich mentioned. We "pay" more for that here, for better or for worse.
Edit: I almost forgot... Microsoft was born in Seattle. So if like attracts like, then all those other online and tech companies are SURE to follow and be close to Microsoft. And, really, my argument does hold up. It's a basic tenet of the academic field of geography--it's taught in GEO 101. All our manufacturing jobs in this country are basically in the South. Cheap labor, cheap transportation, close to market. Oregon can't really compete.
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