COLLEGE STATION — When it comes to recruiting businesses, economic developers may need to place more value on parks as perks, according to a Texas Agricultural Experiment Station researcher.
That’s because some businesses may place a higher value on recreational opportunities than economic developers and public officials assume, said Dr. John Crompton, a professor of recreation, parks and tourism sciences at Texas A&M University and an experiment station researcher.
Small businesses, in fact, ranked recreation, parks and open space first among quality-of-life elements in location decisions, according to a survey of both businesses and economic developers.
“If that’s true, then you have to conclude that recreation and park facilities are central to economic development,” Crompton said.
Business decision-makers rated recreation, parks and open spaces to be significantly more important in location decisions than did economic development officials. Several types of businesses also rated the general issue of quality of life as significantly more important than other factors, such as government incentives or availability of labor.
Those findings are all part of a study Crompton did with Texas A&M graduate student Lisa Love and Thomas A. More of the U.S. Forest Service.
They wanted to determine how important quality of life, government incentives, labor, proximity to customers, operating costs and transportation were to businesses making location decisions, as well as how important economic development agencies felt those factors were to businesses. The researchers asked further questions to determine exactly which quality-of-life issues were seen as more or less important to both groups.
“Although quality of life is often cited as a relevant factor in business relocation decisions, quality-of-life elements important in those decisions may differ from business to business,” Crompton said.
Quality-of-life elements examined in the study, besides parks, recreation and open space, were primary and secondary education, cost of living and housing, personal safety, cultural opportunities, and health and medical services.
In ranking elements involved in location decisions, respondents were asked to divide 100 ranking points among the elements to assign a relative value to each.
The researchers surveyed senior officials from 73 different economic development agencies in Colorado, as well as the key decision makers from 174 businesses that had relocated, expanded or been started in that state between 1988 and 1992.
Crompton said the study was intended to follow up on previous work focusing on companies that relocated to Texas from out-of-state. The newer study included expansions, startups, and relocations within a state as well as from outside the state.
It also surveyed a larger number of companies, allowing analysis of responses according to differing company characteristics, such as size and the extent to which each company considered itself “footloose.”
“Footloose companies are businesses whose financial viability is relatively independent of location decisions. They are not tied to raw materials, natural resources or energy supplies, and their principal resource is their employees,” Crompton said.
The study said cities perceive footloose companies to be excellent prospects for relocation, partly because they are seen as polluting less and having higher levels of employee compensation. Cities compete aggressively for such businesses, the study noted.
Companies characterizing themselves as more footloose assigned a value of 29.3 to quality of life, the highest ranking of the six general relocation-decision elements. The second-highest ranking was 21.5 for operating costs.
Companies considering themselves less footloose, however, ranked proximity to customers as the most important element, assigning it a value of 44.8 out of 100. Quality of life was assigned a value of 11.6, which was third out of the six elements.
The two types of companies did not differ significantly in their ranking of the specific quality-of-life elements. However, footloose companies’ valuing of recreation, parks and open space was statistically more significant than for three other elements and second overall out of the six elements. Only cost of living and housing, valued at 26.1, was higher than the recreation value of 21.2.
The researchers also compared small companies, those with eight or fewer employees, to large companies, those with 88 or more employees. The two highest-ranked elements in relocation decisions for small companies were quality of life, with a value of 33.3, and proximity to customers, with a value of 28.4.
Large companies valued quality of life at 14.7 — third among the six elements, the study noted.
Among quality-of-life elements, large companies placed the greatest value on cost of living and housing (34.5) and the fourth-highest value on recreation, parks and open spaces (12.1).
Small companies, however, valued parks highest at 26.4 and cost of living second at 23.0, the study said.
Given the growing importance of small companies in the U.S. economy and the relative infrequency of opportunities to draw large companies, communities may want to reconsider what they have to offer in terms of recreation, Crompton said.
Crompton said the study can’t be generalized for all areas and showed different results than the earlier Texas study, which indicated that recreation, parks and open spaces were not as important to companies surveyed.
Nevertheless, he said, “The study does demonstrate that recreation, parks and open spaces are important in attracting small businesses, and areas which fail to recognize this are likely to lose them to cities that emphasize these amenities.”