Most relocating businesses stay local, data show
Large business relocations may draw splashy headlines and bring jobs and revenue to a city, but a new data analysis shows that such moves are much rarer – and less beneficial – than thought. Findings detailed in the latest quarterly report from UCI’s Metropolitan Futures Initiative reveal that only a third of company relocations in Southern California cross city borders, just 6 percent cross county borders, and nearly a quarter are to sites less than half a mile away. “When it comes to new tax revenues and creating jobs, relocating businesses don’t offer much. New business creation is much more substantial,” said John Hipp, MFI director and UCI professor of criminology, law & society, as well as urban planning & public policy and sociology. “Rather than focusing on attracting corporations from elsewhere, it might be worthwhile for local policymakers to look at other ways of bolstering the tax base and employment opportunities.” Researchers also found that regional businesses tend to move to less walkable spaces, countering the popular assumption that they’re increasingly apt to relocate to dense downtown areas. Identified trends apply to all company categories, including finance, insurance, real estate, and creative and professional industries such as architecture and design. The analysis was limited to Southern California, so it’s not known if the results hold true more widely. See the report here. The MFI is hosting a webinar on the findings at 1:30 p.m. Tuesday, Aug. 15.