When Amazon released a request for proposals for its second headquarters in 2017, it put a public spotlight on the evolving role of municipal government in attracting new business and forever changed the way cities approach economic development.
“Now everybody’s interested. Now economic development is a beautiful thing,” said Jenna Saucedo-Herrera, president and CEO of the San Antonio Economic Development Foundation. “With this increased focus on what we do, there’s additional pressure to do it to the best of our abilities in the way that San Antonio deserves.”
On Tuesday, Saucedo-Herrera presented to the City Council’s Economic and Workforce Development Committee her organization’s achievements in recent years to attract new business and jobs to San Antonio as well as its 2019 scope of services for endorsement by the committee chaired by Councilwoman Rebecca Viagran (D3).
Saucedo-Herrera also laid out the organization’s goals for this year and beyond as it partners with the City’s Economic Development Department to meet the targets outlined in the Forefront SA Action Plan. The SAEDF will present its target 2020 goals at a City Council meeting in April.
The SA Forefront Action Plan was born out of a 2015 evaluation by the private sector of the partnership between the City and the SAEDF. The committee confirmed the partnership should continue and provided formal recommendations to a Council committee. That resulted in Forefront SA as led by the SAEDF through 2020.
Last year, the SAEDF worked on 20 projects, creating a total of 4,460 jobs (of which 1,106 were target-industry jobs and 1,670 high-wage jobs), and $217 million in new capital investment. The organization visited 70 companies for business retention and expansion purposes, added $26.6 million in foreign direct investment, and led four international trade missions. Also in 2018, it brought Free Trade Alliance San Antonio under the SAEDF umbrella that also includes the workforce development arm, SA Works.
But this year will be the organization’s best year yet, Saucedo-Herrera said. “What I’m most excited about in 2019 is we get to execute,” she said. “Over the last two years, we have been successful, we have achieved our goals, but we’ve done that while we were building and changing as an organization. This year, we’re allowing the team to run free and start winning some bigger and better deals.”
In 2019, SAEDF will align its international business development tactics with findings from the Brookings Institution Global Cities Initiative, set to be released later this year.
“We have got to get very serious about how we think we can compete, in what industries we think San Antonio can be a leader – not just a domestic leader, but a global leader – and go all in with our partners around the community to position San Antonio as such,” she said.
The Brookings study, she said, will change the way the SAEDF operates internationally, from a “shotgun approach” to one that targets metro-to-metro relationships and alliances with universities.
“We have landed some incredible projects, but we have so much more work to do internally as an operation, and externally as ‘Team San Antonio’ to really deliver on projects we believe San Antonio deserves,” she said. “International business development will be a priority, and I would argue you cannot operate globally if you are not functioning as a regional economic entity.”
Thus, the SAEDF is working with its counterparts in places like New Braunfels, Schertz, and Medina County to formalize a partnership so “they become a part of our regional team,” she said, as other top-performing economic development organizations [EDO] around the country do. “We know that to be a best-in-class EDO, we’ve got to get there, and we will get there by the end of the year.”
In addition to a number of key performance indicators that establish goals for target industries and capital expenditure, the Forefront SA Plan calls for the addition of 20,000 jobs to the economy between 2017 and 2020. The SAEDF is focused on quality jobs first, Saucedo-Herrera said, quantity second. In the past year, 70 percent of the jobs it secured were in target industries – higher than expected.
“At the end of the day, our mission is simple. We are here to produce jobs, good jobs, and more jobs for San Antonians,” she said. “That’s why the EDF exists, why our public-private partnership exists.”
The target 2020 goal for foreign direct investment is $200 million, which Councilman Clayton Perry (D10) said is a lofty goal.
“Keep in mind these are aspirational targets for where we believe that our organization should be delivering,” Saucedo-Herrera said. “As we evolve to become more of a regional player, as we have beefed up our staffing and restructured the team, we believe that if we were just looking in the rearview mirror – yes, that would look like a challenge.
“But knowing where we’re going … and knowing the resources that will come behind us to fuel that effort, we will get there.”
Councilman John Courage (D9) asked Saucedo-Herrera about the organization’s current budget and staffing, and if it should be putting more resources toward attracting jobs in the life sciences industry.
Forty-five percent of the SAEDF’s $4 million annual budget is funded by the City of San Antonio and Bexar County. The organization spends $1 million of that budget on workforce development. There are 19 people on staff.
“Our next strategic plan will include a robust and comprehensive analysis of where San Antonio is competitively positioned to win,” she said. “Based on what we’ve seen … cybersecurity rises to the top. Cybersecurity is where San Antonio can compete and win. And nobody outside of the capital region can compete with us there. Second to that is life sciences, and third is manufacturing.”
But the majority of SAEDF’s resources, in terms of time and marketing, is spent on targeting life sciences and cybersecurity, Saucedo-Herrera said. “It takes time, though, for that work to realize its potential on the outcome. It’s a smaller component of our [outcomes] pie to date; it will not be in the future.”
Councilman Manny Peláez (D8) inquired about how much time the organization puts toward foreign direct investment from companies in Mexico now that the Free Trade Alliance is integrated with the SAEDF. “I wonder whether or not 2017-20 is the right period of time to measure that and whether we ought to be looking at a 10-year [timeframe],” he said. “I would suspect nothing has changed when the minimum wage in Mexico is $13 a day compared to the kind of minimum wage we’re chasing. I would be shocked if you got a big win out of Mexico.”
“We haven’t actually seen as much activity in Mexico as we’d like to see. Right now, we think there’s an opportunity there,” Saucedo-Herrera said, adding the majority of activity from Mexico has been in trade and export development or Mexican companies still in the incubation stage.
“That’s why we’re so excited about the Brookings work because we will leverage data to inform, based off our targeted industries, where we should be,” she said.