By Tom Gresham
From the September/October 2024 Issue
The accelerating emergence of artificial intelligence (AI) into industries of all kinds is making it an increasingly important consideration for companies’ site selection decisions. Against that backdrop, regions are devoting heightened attention to their AI ecosystems, not only looking to strengthen them but to emphasize them to site selectors. These regions are focusing on how their existing—and future—resources can support a company’s AI needs, particularly as they relate to R&D and workforce. Meanwhile, AI also is offering new opportunities in the site selection process itself to help match companies with sites that best meet their distinct needs.
Here’s a look at how the link between AI and site selection is growing stronger.
Adopting AI In Wisconsin For High-Quality Job Growth
In Wisconsin, Governor Tony Evers created the Governor’s Task Force on Artificial Intelligence. The task force released a set of recommendations in July 2024 that called for expanding digital literacy, developing flexible training programs, improving government service, and providing incentives for industries to adopt AI.
Missy Hughes, Secretary and CEO of the Wisconsin Economic Development Corporation (WEDC), said Wisconsin’s AI environment is built on a foundation of its educational institutions, such as the University of Wisconsin System, and its partnerships with major corporations, such as Microsoft. “Our comprehensive AI workforce development plan prioritizes ethical decision-making and equitable access, aiming to expand digital literacy, provide flexible training and remove barriers to employment,” she said.
“These efforts are complemented by advanced research and innovation at facilities like the AI Co-Innovation Lab, housed at UW-Milwaukee and run in partnership with Microsoft, where manufacturers and entrepreneurs collaborate with AI experts to drive business growth and technological advancement,” said Hughes.
“Through these initiatives, Wisconsin is fostering industry adoption of AI to enhance competitiveness and create high-quality jobs. Wisconsin’s role in AI research is further strengthened by conferences like the IEEE/WIC International Conference on Web Intelligence, which fosters innovation across various sectors, including health care, education, and smart living.”
Hughes noted that AI is transforming industries across Wisconsin beyond just high-tech firms.
“While Microsoft is investing $3.3 billion in an AI data center in Mount Pleasant, it’s also launching a Co-Innovation Lab in partnership with the University of Wisconsin-Milwaukee, and businesses in sectors like manufacturing, health care and agriculture are gaining access guidance and cutting-edge tools needed to integrate AI into their companies,” Hughes said. “These innovations are helping companies improve efficiency, boost productivity and enhance their competitiveness.”
And Wisconsin’s designation as a Regional Technology Hub solidifies the state’s leadership in biohealth and personalized medicine.
“This recognition, combined with advancements in AI, positions Wisconsin as a key player in future tech innovation,” Hughes said. “Our state offers businesses diverse opportunities across sectors, while also creating pathways to high-paying jobs. These developments ensure that Wisconsin continues to lead in both technological growth and workforce development, offering a competitive edge to industries statewide.”
Pennsylvania Looks To Lead On Real-World AI Solutions
Pennsylvania Governor Josh Shapiro signed an executive order in September 2023 that established standards for state agencies to use and innovate with AI technology, focusing on ethical and responsible uses to serve residents.
“I think it’s exciting that we have embraced generative AI, and the governor’s office is really working aggressively to make Pennsylvania a leader in innovation and economic development,” said Jen Gilburg, Deputy Secretary of Technology and Entrepreneurship for Pennsylvania.
“We put forth a new 10-year economic plan, and AI and technology is one of the five pillars that are areas of focus. The other areas are agriculture, energy, life sciences, and manufacturing. Although AI and robotics is the official fifth category, it’s almost a horizontal one that will impact all the other verticals. It’s definitely being prioritized here.”
As an example of how AI can impact the other areas, Gilburg points to work being done in Pennsylvania using AI to accelerate the rate of drug discovery and improve imaging for patient care.
“If you look at life sciences, it’s anticipated to create more than 6,500 net new jobs in Pennsylvania in the next 10 years, and 60% of that growth will be concentrated in R&D,” she said. “Because we’re in a state that’s really embracing AI, it’s a really great place for those types of companies to come and grow.”
Reshoring manufacturing is a critical trend in site selection that has emerged from the pandemic. In order for that effort to be successful, though, Gilburg said adopting AI-enabled automation in the U.S. is essential to remain competitive from a cost standpoint with overseas locations where workers are paid very little. As an example, she pointed to semiconductor manufacturing and the push to increase its presence in the U.S.
“Automation cost jobs 30 years ago, so we tend to think of automation and manufacturing as the boogeyman, but really automation is going to be what allows us to bring those jobs and bring those elements of our semiconductor supply chain back to the United States,” said Gilburg.
Automation also will help manufacturers remain competitive and operational as workers retire in waves as the “silver tsunami” arrives. “Having automation available to help these manufacturers stay in business if they can’t hire workers is going to be imperative,” Gilburg said.
Site selectors in manufacturing pay close attention to the extent of a region’s embrace of AI and automation.
“Having a workforce and having strong R&D locally is really attractive to site selectors,” Gilburg said. “Automation is coming—it’s how manufacturing will survive, it’s how we’ll reshore—so if you have a region that’s pushing back on that, they’re not training their workforce on it, they’re not working with the R&D at the universities on it, I have seen that be a deterrent for site selectors.”
As a result, Gilburg said, Pennsylvania leans in on its efforts to embrace AI and related technology, focusing in part on the state’s five R1 research universities and the resources and young, highly educated workers that they offer—and their steadfast efforts to use new, sophisticated technology to solve real-world challenges.
“We have university students working in manufacturing that are going to help companies automate,” Gilburg said. “We fund a number of programs where we partner universities with manufacturers to help them solve problems on their line. … Having a state where we’re facilitating those connections is a huge value-add when companies are looking to relocate into the commonwealth.”
Washington, DC Sits At The Heart Of AI Decision-Making
Kevin Morgan, Vice President of the Washington DC Economic Partnership (WDCEP), said AI is growing quickly in the DC region with a particular focus on governance (regulation, policy) and responsible use of AI. In fact, he said Washington, DC has assumed a central place in AI decision-making and innovation. He noted that AI job postings in the area even surpassed the San Francisco Bay area, according to JLL’s Future of AI report.
“Additionally, countless AI conferences are based here in Washington, DC,” Morgan said. “The leading technologies, executives and policymakers all come here. This is where the decisions—and business deals—are made in AI.”
In Washington, DC, Morgan said there is a focus on incorporating AI into business/government processes; an emphasis on the use of AI in national security/defense priorities (including cyber); and an interest in ensuring that AI/automated decision-making processes are inclusive and correctly reflect the needs and considerations of the city’s diverse population. Along those lines, the city’s Office of the Chief Technology Officer is spearheading an AI Values and Strategic Plan.
For companies considering new sites, Morgan said Washington, DC, is at the heart of a regional hotbed of AI activity, pointing out that governance and technology regulation is driving the sector. “If a company wants to help shape the future of a trillion-dollar industry, there is no better place to do it than right here in DC,” he said.
“Federal government AI innovation contracts/grants offer stable revenue for companies innovating in AI,” Morgan said. “Proximity to policymakers on Capitol Hill and access to federal regulators provides AI companies and workers the opportunity to help shape the future of AI not just in the U.S., but globally with access to 175-plus embassies, global NGOs, leading think tanks and more.”
Artificial Intelligence In The Site Selection Process
A report in January 2024 from the Site Selectors Guild, “The Potential and Limitations of AI in the Site Selection Industry,” shed light on the role that AI is poised to play in the site selection process going forward.
The report highlighted that 40% of the Guild’s members indicated that they already use AI platforms for day-to-day functions in a November 2023 survey. Most of those who said they had used AI said their primary use was to distill and analyze the large amounts of data needed for the site selection process. In general, guild members said AI offered an important potential time-saving tool but one that should be treated with caution and scrutiny to ensure it provides “trustworthy input to the site selection process.”
In the City of Henderson, Nevada, the economic development team is providing site selectors a view into the state of its industry landscape with an AI-powered Target Industry Dashboard. Using AI to maintain a public-facing database and introduced in late 2023, the tool gives users the latest information related to employment, wages, and gross regional product in Henderson.
The city completed a Target Industry Study identifying five industries—Back-Office Management and Support Services; Electrical Equipment and Components Manufacturing; Financial, and Credit Services; Logistics Management and Technologies; and Media and Sports Production. That led to the drive to create a dashboard with current data.
Says Jared Smith, Director of Economic Development and Tourism for the City of Henderson, “We brought in AI once we knew the data points we wanted to include. Using trusted sources (including U.S. BLS and Lightcast), we direct the AI to those sources, which feeds into the dashboard.”
“AI did not help us decide what our targeted industries were—AI is assisting the city to monitor the information in real-time,” he explains.
When asked how the City of Henderson envisions the role of its AI-powered Target Industry Dashboard in site selection, Smith says, “In our experience, site selectors want to visit economic developers’ websites, get the information they need, and contact you when they are ready for a discussion. With AI, the process may be the same, but we want our data to be current, so that the site selector knows the information they are getting from us is up to date.”
AI technology has the potential to transform site selection decisions by leveraging real-time updates, data analytics, predictive modeling, and machine learning. By integrating these capabilities, AI helps companies make more strategic, data-driven decisions, ultimately improving operational efficiency and market positioning.
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