For decades, boosters in Atlanta have touted it as “the next great international city.” Metro Atlanta has made significant strides, but anyone who has been to New York, London or Paris knows that substantial work lies ahead. But there is good news: Georgia may be on a path to a notable status, that of a “global hub.”
What does this mean? The great Japanese strategist, Kenichi Ohmae, argued that in the 21st-century global economy, national economies matter less; instead, the relevant units are what he terms “region-states.” According to Ohmae, a region-state can be part of one nation or even span parts of nations (e.g. a Vancouver-Seattle region).
To be a player in the global economy, a region-state requires between 5 million and 20 million inhabitants, major international air and seaports, and a skilled corps of professionals to conduct and/or facilitate global business.
Georgia already meets a number of these criteria. The state’s population, comprising among others, sophisticated professionals in global trade, law, education, health care, consulting and finance, numbers about 10 million, which is right in the optimal range. Graduates of Georgia’s fine universities and technical colleges are adding to this needed skilled labor force.
In my mind, to truly become a global hub, Georgia must continue to improve infrastructure; in particular, transporting people and goods safely and efficiently. We have a great head start with assets such as Hartsfield-Jackson International Airport (the world’s busiest airport with service to more than 50 nations) and the ports of Savannah and Brunswick.
Savannah just finished another record year and is the fastest-growing container port in the U.S. and the second largest (after New York/New Jersey) on the East Coast in terms of cargo volume.
While I see Georgia becoming a global hub as an attainable aspiration, Chris Cummiskey, commissioner of the Georgia Department of Economic Development, points to factors already making us very much a global hub. He highlights our leadership in logistics — a good point given our airports and seaports.
I concur with his view that “we are a leader in workforce development, thanks to Georgia Quick Start, the top such program in the nation. Our pro-business environment and the strength of our research universities are among our top assets.”
Cummiskey points to efforts to further enhance our competitive edge, building on our substantial assets. He cites a strategy to achieve this, the Georgia Competitiveness Initiative launched by Gov. Nathan Deal.
Ultimately, how realistic is the goal of Georgia becoming a truly noteworthy hub for global commerce? Jim Balloun is eminently qualified to answer this. A member of the Georgia Ports Authority and former CEO of one of the state’s major corporations, Acuity Brands, Balloun has added perspective on the region-state notion, as he led the practice of McKinsey & Company in Japan before his move to Georgia.
Balloun says that Georgia is well on its way to being a global hub. He believes that if Georgia could do one thing to accelerate its progress, it would be to deepen Savannah harbor from its current 42 feet to 48 feet to handle Post-Panamax container ships. (Once the Panama Canal is expanded, it could handle ships that hold up to 12,000 containers, as opposed to the current maximum of 5,000.) The Savannah Harbor Expansion Plan has been planned for 12 years at an expense of $40 million.
Balloun summarizes what he considers Georgia’s advantages compared to competitors that also hope to become hubs: “Deepening Savannah harbor and the Panama Canal to pass the new ‘Panamax’ ships will drive the delivered cost of a container to Memphis down by 20 percent and make Savannah competitive with Los Angeles in [the cost of shipping goods to] the Tennessee Valley and lower Midwest.” The potential is enormous.
To highlight the importance of Georgia’s potential amplified role in global trade, note that after a steep decline during the worldwide Great Recession, world trade is rebounding aggressively. Total worldwide exports are forecast to reach $23.5 trillion in 2012. Exports are rising toward one-third of total world production, a clear sign that business is globalizing. As an export powerhouse and as a leader in shipping, transportation, logistics and warehousing, Georgia could create more jobs and economic opportunity for all its current and future residents.
I asked Walter “Sonny” Deriso Jr., chairman of Atlantic Capital Bank, to share what he sees as Georgia’s most promising development.
His perspective is valuable, as he is in his 11th year as chairman of the Georgia Regional Transportation Authority board.
He states that “the mayor of Atlanta has enjoyed a very positive relationship with Georgia’s past and current governor, to help Georgia secure funds for infrastructure improvements. This continuing relationship will be a key ingredient in the infrastructure enhancements that can secure Georgia’s pre-eminence as a global center.”
Ultimately, I agree with Deriso’s conclusion regarding Georgia’s potential: “Georgia’s strategic location, infrastructure and transportation systems, business climate, leadership and workforce all combine to create the potential for a global hub for commerce that will benefit Georgia’s citizens for generations to come.”
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