Written by: Marion During, Marketing Specialist | Missouri Partnership and Christopher Chung, CEO | Missouri Partnership
[Originally published by Construciton Forum St. Louis]
Though the city of St. Louis covers just 65 square miles of eastern Missouri, the four-county metro area is the largest in population in the state. St. Louis—often called the “western-most eastern U.S. city”—provides a dynamic backdrop for leading companies in financial services, information services, health science and services, biosciences, logistics and advanced manufacturing. Big names like Edward Jones, Graybar, Express Scripts, Monsanto, Unigroup and Anheuser-Busch all call St. Louis home.
Manufacturing in the St. Louis region is currently seeing an uptick, even though economists are predicting it will decrease over time. Much like the rest of the country, St. Louis is benefiting from the release of pent-up auto demand as car manufacturers like GM increase production to fulfill consumer demand.
In October, Boeing, which currently employs over 14,000 people in the region, announced it will begin building parts for its 777X commercial aircraft in St. Louis in 2017. Company officials said a significant capital investment will be made at the St. Louis composites facility, creating 700 jobs. This will mark the first time production for Boeing commercial planes will take place in St. Louis; the company has long produced military aircraft in the region.
The financial services industry in St. Louis is quickly emerging as one of the leading ones in the nation. St. Louis is the 3rd most concentrated market for investment advisors, just behind New York and Boston. The single biggest driver of the economy, however, is healthcare. Nationally ranked hospitals, universities and research centers make the area a magnet for talent and keep the city on the leading edge of advancements in human health.
St. Louis’s bioscience industry is also seeing major growth and innovation. In November, BioSTL—a St. Louis organization advancing regional prosperity by cultivating the innovation ecosystem and bioscience sector—announced that Israeli agtech company Kaiima Bio-Agritech selected St. Louis for its new U.S. headquarters. Kaiima is an innovative plant genetics and breeding-technology company that has developed a non-GMO technology platform that improves crop productivity.
Kaiima’s announcement follows news from June that KWS—a leading global plant science company headquartered in Germany—also selected St. Louis for its new North American research facility. KWS will invest nearly $13.7 million in capital investment to open the facility at the Donald Danforth Plant Science Center’s BRDG Park. It is expected to create 75 high-paying jobs in the St. Louis region within the next three to five years.
While the diversity of the region’s industries is one reason St. Louis’s economy stays strong, companies often cite the city’s favorable business costs as a top reason for choosing the area. CNBC ranked Missouri 11th lowest for business costs in 2014; the ranking includes taxes, utility costs, wages and rental costs for office, commercial and industrial space. St. Louis also ranked as the 9th most competitive place to do business among U.S. metros with populations exceeding two million, according to a 2014 study released by KPMG.
On top of the already-low business costs in St. Louis, the state also offers valuable incentives for companies considering an expansion or new location through its Missouri Works program. The program includes multiple job creation categories and offers a mix of automatic and discretionary benefits in the form of 100% retention of state withholding tax, as well as refundable, transferable and/or sellable tax credits for qualified companies. For all categories, companies must offer health insurance and pay at least 50% of the premium for full-time employees. As of August 2014, the Missouri Department of Economic Development estimated that nearly 9,000 new jobs and $955 million in capital investment had been announced as a result of Missouri Works.
While the companies in the St. Louis region enjoy low business costs, their employees also take advantage of the area’s favorable living costs and high quality of life. Missouri had the 5th lowest housing costs in the U.S. in the 3rd quarter of 2014, according to C2ER, with an index of 78.2 (compared to the national average of 100). The index for St. Louis was even lower than the state average at 72. Financial website Interest.com ranked St. Louis the 3rd most affordable home market among the nation’s 25 largest cities in 2014.
St. Louis also has everything a major metropolitan center is expected to have: world-class museums, a nationally acclaimed zoo and terrific recreational opportunities, including major league sports teams and spectacular parks and golf courses. What isn’t expected is these things are affordable—sometimes free—and easy to access. The region offers big city amenities with the connectedness of a smaller one. And to top it all off, Greater St. Louis’s commute time is consistently below the national average, according to the U.S. Census Bureau.
Residents and businesses both benefit from St. Louis’s central location, which lends to the region’s strong transportation network. Highway and rail systems that crisscross the U.S. give St. Louis companies a decided advantage. The city has access to four interstates, Class I rail service and Lambert-St. Louis International Airport. The Mississippi Rivers benefit companies with both a domestic and international presence by offering low-cost, year-round shipping.
While there is much happening in the city economically, St. Louis officials have noticed an out-migration of young people, mainly due to a lack of job opportunities. Over the last few years, however, the region has started to be recognized as a hotspot in the world of high-tech entrepreneurs and information technology startups, which is both utilizing the local workforce and pulling talent from all over the country. Across the city are incubators, startups, award-winning accelerators and mentor programs.
One of the city’s most vibrant places is the Cortex Innovation Community. Founded in 2002, Cortex is mid-America’s premier hub for biosciences and technology research, development and commercialization, anchoring St. Louis’s growing ecosystem of innovative startups and established companies. Cortex provides state-of-the-art facilities surrounded by amenity-rich urban neighborhoods.
Attracting companies to St. Louis is truly a team effort by a myriad of agencies working together to better the region and the state. The Missouri Partnership—the principal business recruitment and marketing organization for the state of Missouri—partners with groups like the St. Louis Regional Chamber and the St. Louis Economic Development Partnership to attract businesses interested in investing in St. Louis. The Partnership is a non-profit corporation supported by the Missouri Department of Economic Development and the Hawthorn Foundation.