The PR Disaster that is Arizona: How Not To Attract Foreign Investment

Cities and states are in intense competition over visitors and new companies, to create jobs and maintain a healthy tax base. Tourists, business visitors, corporate headquarters and factories, as well as investors are important target audiences for marketers.

Many geographical locations invest in people and incentives like tax subsidies to create a good climate for new business. Access to transportation for goods and people, suitable office space, and trained workers are also part of the picture.

However, that difficult to define Quality of life is what, all things equal, sets places apart.

Arizona has a nice climate, spectacular scenery, endless clean solar and wind energy, unique native american culture, plenty of real estate, good airports, improving schools, and good universities. But it has an image problem. And it is of its own making.

Regardless of what political views we may have, the sorry fact is:
In national and international media, Arizona comes across as a backwards, primitive place where people carry and use concealed guns, and vigilantes roam the border, intercepting destitute immigrants. Law enforcement wastes time and energy chasing immigrant construction workers and nannies , instead of dealing with serious crime like drugs or violence. http://www.lemonde.fr/opinions/article/2010/05/12/l-arizona-un-etat-policier-par-francois-vergniolle-de-chantal_1349921_3232.html 

http://www.timesonline.co.uk/tol/news/world/us_and_americas/article7113838.ece 

http://www.spiegel.de/international/world/0,1518,692119,00.html

This image is difficult to change, but to make things worse the new Arizona SB 1070 set to take effect later this summer is making illegal immigration a state misdemeanour in addition to a federal civil violation. This makes the state (where perhaps 1/3 of the population is Hispanic) come across as downright racist. http://www.economist.com/world/united-states/displaystory.cfm?story_id=16060133

Other places vying for foreign investment, say North Carolina or Michigan for manufacturing, or California for clean energy companies, must be squealing with delight: one of their potentially most difficult competitors has shot itself in the foot.

In this day and age of social responsibility, companies, States and other organizations are vulnerable to negative publicity. Boycotts from a slew of organizations are already taking a toll on the Arizona economy (http://www.marketwatch.com/story/phoenix-hospitality-business-is-hit-by-boycotts-2010-05-18) and are now starting to eat into the State reputation, which may be an ever bigger long term problem http://insight.kellogg.northwestern.edu/index.php/Kellogg/article/why_boycotts_succeed_and_fail 

From a PR perspective, decisive political action is needed to restore investor and business confidence in Arizona:

1. Eat humble pie, but confidently explain what problems SB 1070 is intended to tackle, and work jointly with the federal government and other states for effective and fair solutions
2. Visibly and decisively deal not with the symptoms, but the underlying issues: a porous border, illegal drug use in the US, weapons smuggling to Mexico
3. Show leadership in immigration reform, allow importation of the labor needed, when it is needed. Many countries have guest worker programs that work well and help their economies grow
4. Emphasize the demographics and sustainable competitive advantages Arizona offer. Listen to potential investors, and offer what they look for, be it trained workers, access to credit, commercial real estate, or tax breaks
5. Target specific industries and countries for investment promotions, like solar and wind energy generation, tourism and real estate, with investors from places like Germany, Spain or, for that matter, Mexico
6. Keep an eye on the competition. Benchmark, identify best practices and keep refining both messaging and incentives for investors.

To get this done, a strategic vision and a broad consensus is needed between business, civic organizations, and politicians on the State and Federal level. The perspective must be market- driven and fact based. There is no room for emotions or lack of flexibility.

If the strategic marketing work starts now, maybe Arizona can be the top-notch destination it deserves to be in time for the centennial celebration next year?

To read more about marketing of locations, I recommend “Marketing Places” by Kotler, Haider and Rein, on Free Press.

Executives Need International Experience

In a recent article in US News and World report Liz Wolgemuth writes that 3/4 of Top-100 company CEOs now have international experience.

This is a change for the better. Large as it is the US economy is still very dependent on domestic consumption. The more international trade there is, the more opportunity for manufacturing companies to grow and prosper.

The language of business is universal and understood everywhere, it is a force for cooperation and prosperity, but businesspeople must always understand the local culture and guard rails to be effective. The best way to learn a culture and language is to immerse oneself in it!

Here is the article: http://www.usnews.com/money/careers/articles/2010/05/21/what-the-rsums-of-top-ceos-have-in-common.html?msg=1