8 Trends that Will Impact Location Decisions in 2024
A new year brings new challenges and opportunities every business must navigate. Few business decisions are as momentous as an expansion or relocation. Leaders contemplating such a move must account for new factors reshaping the business landscape and will affect outcomes for years to come. Trends that promise to affect every business, directly or indirectly, and impact location decisions in the year ahead include:
- Clean energy and access to water are a must. Increasingly extreme weather events, from storms to drought to wildfires, are affecting millions of people across the country, snarling supply chains, and disrupting business operations. The need for reliable – and clean – energy and an ample water supply are vital. Nearly half of sites across America have seen significant declines in groundwater levels, with four out of every 10 sites hitting all-time lows in the last decade, according to a New York Times investigation. Against this backdrop, it is increasingly important for companies to choose locations where they can find reliable sources of clean energy and water.
- Innovation is the great attractor. Recent advances in AI, supercomputers, quantum computers, and biotech promise to revolutionize medicine, science, finance and many other fields. The market for generative AI could top $1 trillion within 10 years, according to Bloomberg Intelligence. Meanwhile, public and private funding is pouring billions of dollars into areas like semiconductors, quantum computing, and the creation of technology hubs. Investors – both domestic and foreign – are much more likely to consider places with an ecosystem of innovative companies and supporting organizations such as research universities and accelerators.
- Skilled talent is the most valuable asset. Amid a tight job market, with unemployment still sitting near historic lows under 4%, employers need skilled workers of all stripes. That includes everything from IT experts to help with digital transformation, scientists working on the next medical breakthroughs and engineers and construction trades to design and build factories, roads, and data centers. Companies want to be near thriving talent pools fed by universities and technical academies and an ecosystem of innovators.
- Speed is essential. In today’s hypercompetitive market, getting a new facility online fast can be worth more than tax incentives and long construction timelines. Locations that take care of the site prep work upfront will be in high demand as they give businesses a competitive edge. Access to an inventory of sites and their attributes can help jumpstart the site selection process and save valuable time.
- Regional cooperation is more important than ever. The rise of megasites and complex projects requires close coordination between state, county, and local authorities and communities. Places that share and optimize resources such as market research and asset mapping can achieve greater efficiency and scale in serving the needs of businesses. Meanwhile, having alignment across various stakeholders from the get-go makes for a smoother process, maximizing available benefits while minimizing surprises and risks.
- Rail rises again. A combination of sustainability, air and road bottlenecks, and reliability have made access to rail a key factor in location decisions. Some 40% of long-distance freight runs along railways, yet it accounts for just 1.7% of transport-related emissions. And while the freight sector overall has been choppy amid economic uncertainty, rail traffic involving containers and trailers last November rose 5% year-over-year. A location with access to robust, modern transportation infrastructure ensures goods can reach customers quickly.
Plant-based foods and products are blossoming. Growing consumer awareness of health and climate issues is fueling a surge in demand for plant-based foods, proteins, and other products like environmentally friendly materials. Innovators, large and small, serving this growing market are looking for a combination of proximity to agriculture as well as access to food manufacturing know-how and talent.
- Canada looms larger. When it comes to trade, America’s biggest partner remains our neighbor to the north. The United States and Canada share the most productive trading partnership in the world, supporting millions of jobs in each country. The U.S. accounts for nearly three-quarters of Canadian exports, while Canada is the top market for nearly two-thirds of American states. Canadian firms are increasingly looking to expand their presence in the U.S., and they are looking for locations that give them greater access to global markets, a deep pool of skilled talent, and reliable, sustainable energy.
These are just some key trends that will factor into location decisions this year, prompting companies to prioritize places that have these attributes. Illinois is fortunate to have an unmatched skilled workforce to support companies in a diverse range of industries, along with a world-class higher education system that helps advance this workforce. The state’s top-notch infrastructure and central location make it easy to move products and people. It also has abundant and reliable clean energy and a vast water supply. Finally, the state’s ecosystem of innovative companies and pro-business environment, paired with new incentives for companies to thrive, make Illinois a premier location for growth in the year ahead.
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