According to a data from McKinsey, 53 of the world’s top 100 economies are countries, 34 are cities and 13 are multinational enterprises.
Large enterprises are the engine of sustainable urban growth.
Leading enterprises are not only the pillar and engine of urban (Group) economy, but also reflect the local economic strength and industrial structure characteristics to a certain extent. Even the overall industrial transformation, the agglomeration of supply chain can not be underestimated – yes, small enterprises contribute most of the employment, but their main driving force of economic growth and industrial structure transformation still need to rely on large enterprises.
According to Forbes fortune 2000, companies with sales of more than $1 billion are about the order of 2000. According to CB insight’s research on Unicorn enterprises, by February 2022, the number of Unicorns in the world was only 1000.
These companies, with large volume and fast growth, are the target of various cities. How to attract enterprises?
According to Kotler’s research, few cities have seriously studied the preferences of large and medium-sized multinational corporations in the choice of investment cities, and there is a lack of understanding of their decision-making process. (1) What are the main factors that affect the choice of investment cities and business expansion of large and medium-sized multinational corporations? What is their decision-making process? (2) What are the other factors that affect the decision-making of enterprises, investors and professionals? (3) What (information, channels, etc.) has influence on the decision-making process of enterprises choosing to invest in cities? What are the most important factors that affect the development of enterprises from the perspective of enterprises? Is it a market? Is it a policy? Is it talent? Is it a supply chain? Is it consumption growth potential? Is it a potential social and cultural value?
Understand the enterprise’s urban strategy and its most critical pain points, and then formulate targeted countermeasures according to your own advantages and industrial foundation. Below, we share three cases.
Amazon’s second headquarters focuses on talents
With the development of Amazon, the office space of the first headquarters in Seattle is gradually limited, and the location of the second headquarters of Amazon has begun. In terms of site selection, Amazon made a big deal, saying that the second headquarters invested US $5 billion, and the specification is equivalent to that of Seattle headquarters.
There must be brave men under the heavy reward. 238 proposals were received in the first round of audition, and only seven American States did not participate in the “audition”. Major cities compete for excellence.
However, many industry observers believe that Amazon already knows where it wants to go, or that the selection range of the second headquarters does not exceed 2-3 specific cities.
Why? Because indeed, only a few cities meet Amazon’s requirements.
Peter kapley, a professor of management at Wharton Business School, said, “for most enterprises, the current location problem is driven by labor force: can we attract skilled talents needed for the development of the company?”
No company will move to Silicon Valley or New York because the rent is cheap; They moved to Silicon Valley because good people were there. In the era of knowledge economy, for most science and technology enterprises, the core driving force of location selection is talents. More extreme, it is driven by one or two star talents.
Therefore, the acquisition of talents is the most concerned thing of Amazon’s second headquarters. After all, it was also because of people that Mr Bezos chose Seattle at that time. There were software talents there.
One of the winning cities is Ellington, which is located in Greater Washington state. It is only a 15 minute drive from Washington, D.C., about 2 miles from Reagan National Airport and less than an hour from Dulles International Airport.
At the same time, this is the most educated region in the United States: about 49% of people aged 25 and over have at least a bachelor’s degree, and the number of CS graduates here exceeds that of any other metropolitan area in the United States.
The government will also increase investment in schools here to provide more computer technology talents for technology companies such as Amazon.
At the same time, the second headquarters also takes into account the needs of young talents here – young people want “theatres, museums, shopping malls, cafes, snack streets, live music and various forms of entertainment”; Want convenient transportation, live close to the company, and the cost of living is affordable;
In terms of development space, national landing, the second headquarters of Arlington, has 1.6 million square meters of commercial space and 150 acres (910 acres) of land for development. It is also very rich in housing resources and complete living factors. For example, there are many shops, restaurants and hotels here.
At present, the design of the second headquarters has been released, which echoes the glass ball “the spheres” in Seattle. The highlight of the second headquarters is – “the helix” (Chinese means spiral) ↓
With Amazon taking root in Ellington, high growth companies and local service enterprise clusters have emerged. This is a great opportunity for any city.
Tesla super factory supply chain support
The automobile industry, in particular, pays attention to supporting facilities. In July 2018, Tesla announced the establishment of a super factory in China. At that meeting, Tesla‘s biggest crux lies in the output – the output can not keep up with the market demand, so it is in urgent need of expansion. However, Tesla does not have enough money to build a factory, and second, it does not have enough time to build a factory and integrate the huge industrial supply chain. There are good products, but they can’t be mass produced quickly. The capital market is not so kind. Tesla faces many doubts.
Shanghai took this opportunity. First of all, we gave money to support Tesla to build a super factory through loans from local Chinese banks, and the infrastructure maniac built it in less than a year; Then give a good location, Shanghai Lingang Holdings Co.Ltd(600848) , where there is a port convenient for vehicle export; Then give policies to the market. Shanghai’s economic volume is at the level of 4 trillion, radiating the Yangtze River Delta. At the same time, Tesla can enjoy the purchase tax exemption, subsidies and other policies that local enterprises can enjoy.
However, the most important and rare thing is that after decades of development, the Yangtze River Delta has formed a world-class automobile industry chain, which can quickly connect Tesla’s demand for new energy vehicles supply chain.
In the Tesla car building story, there is an anecdote of “4-hour circle of friends”. For example, the distance between giga1 factory in charge of batteries in the United States and Tesla factory in Fremont, California is 4 hours and 10 minutes by car. In China, the drive from the Nanjing factory of battery supplier LG Chemical to the Shanghai factory is also 4 hours and 10 minutes.
“4-hour circle of friends” reflects Tesla’s accurate, efficient and strict supply chain management. Globally, there are only 2-3 locations where relatively complete new energy vehicle supporting suppliers can be gathered in 4 hours. At present, the localization rate of Tesla has exceeded 70%. In addition to the core chips and integrated circuits, the whole body is almost made in China. Most of these suppliers come from Jiangsu, Zhejiang and Hubao postal areas.
The introduction of Tesla in Shanghai has brought amazing creativity to China’s new energy vehicle industry, stirred the industrial pattern of Shanxi Guoxin Energy Corporation Limited(600617) vehicles, and led the Yangtze River Delta to quickly become a world-class highland of new energy vehicles and intelligent Internet connected vehicles.
Dublin headquarters group, Ireland
Low tax rate policy
To ask which city / country apple’s profits outside the country go to, the answer is Ireland.
Until 2021, Ireland is one of the “tax havens” in Europe.
Globally, the tax rate in Ireland is “discount promotion”, only 12.5%; The average of EU countries is 21.68%, and that of the UK is 19%. Low tax rates give Ireland a great advantage——
Google, Microsoft, twitter, LinkedIn, hubspot, Facebook, airbnb, Accenture and Deloitte all have headquarters in Dublin, Ireland. After the UK started the brexit process, financial giants also came: Merrill Lynch and Barclays decided to move their European headquarters to Ireland.
Brexit Britain lost more than 10000 jobs, almost all to Ireland.
Of course, Ireland itself can handle it: there are talents here, the people’s education level is very high, and more than 40% of the people have higher education background; Moreover, the industrial ecosystem foundation of the financial industry, medical industry and Internet industry is not poor; Ireland is also a relatively young country. Its citizens have an open mind towards new things
According to the statistics of the Irish investment and Development Authority (IDA), at present, more than 1200 large and medium-sized overseas enterprises have established institutions in Ireland, forming a number of advantageous industrial clusters such as information and communication technology, biopharmaceutical, financial services, Internet, engineering and commercial services and aviation financial leasing.
Ireland’s strategy is to build itself into a policy depression, gather talents and industries, and create the next new growth point.
Even last year, Ireland agreed to abandon the corporate tax rate of 12.5% and support the global minimum corporate tax rate of 15%, the industrial clusters accumulated for many years have brought Ireland full competitive advantage.
The key to attracting transnational corporations depends on the internal and external characteristics of these cities. Philip Kotler, a famous marketing master, summed up a total of 11 distinctive features, which are:
Size, demographic characteristics, logistics and transportation, incentive policies, industrial clusters, supply chains, central government policies, social stability, political and civil management, education level and commercial power of cities or urban areas.
Of course, every enterprise and city is unique. But fortunately, there are not too many leading enterprises in the world, and the enterprises suitable for a city are even more limited.
When a city is based on its own characteristics and advantages and helps enterprises think about their urban strategy, it will gradually move towards its own victory.
