Baton Rouge looks to other projects to predict local impact
When it was announced in late March that IBM would build a first-of-its-kind software development center in downtown Baton Rouge that will eventually employ 800 people, local elected officials and business leaders hailed it as a project that will transform the city.
“Today’s announcement is a game-changer that will have a generational impact on Baton Rouge and our entire state,” Gov. Bobby Jindal said.
Similar comments were made in Columbia, Mo., nearly three years earlier, when IBM announced it would locate a new technology service delivery center in that city that would have 800 employees by 2012.
Dave Griggs, then chairman of Regional Economic Development Inc., the local economic development agency, told The Columbia Daily Tribune in May 2010 the announcement was “the single-most significant impact in private-sector jobs for mid-Missouri in the history of Columbia.”
Mike Brooks, president of REDI, said the IBM announcement has indeed been a “game-changer” for Columbia, a city of more than 110,000 people and the home of the University of Missouri. “But that had more to do with the timing of when the project came in,” he said. “In May 2010, when the announcement occurred here, we were in the middle of the economic slowdown.”
The decision to open an office in Columbia not only gave the city a boost during a bad economic time, it showed that the city was a good place to do business, Brooks said.
“This brought excitement and energy to our broader businesses,” he said. “We have not been disappointed. IBM has been a very, very good corporate partner.”
IBM has opened a temporary Baton Rouge office in the Essen Centre office building. The company has already launched a number of local hiring initiatives, including a day-long job fair and a “campus blitz” that included visits to LSU, Southern University, the University of New Orleans, the University of Louisiana at Lafayette and Southeastern Louisiana University. According to Stephen Moret, Louisiana Economic Development secretary, IBM has already hired more than 40 people.
IBM originally announced it would hire 800 in Columbia by the end of 2012. But as the Missourian reported in May 2012, those waters were muddied before the original announcement. A January 2010 email from a private statewide economic development group to the Missouri Department of Economic Development said IBM would employ 600, and 200 workers would be subcontractors. IBM’s first notice to qualify for a Missouri tax credit program for quality jobs said the company would hire 700.
At the end of 2011, IBM had 338 employees in Columbia, said John Fougere, a spokesman for the Missouri Department of Economic Development. Detailed numbers for IBM’s employment at the end of 2012 were not available last week. But Fougere and Brooks said the company was on schedule to reach the hiring goal of 600.
“The site manager assured me they were on track to meet the number of jobs that had been proposed by the end of 2012,” Brooks said.
IBM has been tight-lipped about what the average salary will be at the Domestic Delivery Center in Baton Rouge. But Brooks said in Columbia the average salary is $50,000, plus benefits. That’s what the company promised.
Brooks said the Columbia center focuses on supporting IBM software applications and customer information technology needs. That’s a little different than the application development and application management that will go on at the Baton Rouge facility.
“They’re not writing programming here,” Brooks said.
Because of this difference in activities, Janice Wiese-Fales, the editor of external relations for the University of Missouri’s engineering department, said contrasting the Baton Rouge and Columbia IBM facilities would be like “comparing apples and oranges.”
Officials at the University of Missouri didn’t provide figures on how many graduates from their colleges had been hired locally by IBM.
Graduate hiring information also wasn’t available in East Lansing, Mich., where in 2009 IBM opened a delivery center for application services on the campus of Michigan State University in an empty credit union building. Ginny Haas, the director of community relations for Michigan State, said the university didn’t specifically track what graduates joined the IBM payroll.
Lori Mullins, community and economic development administrator for the city of East Lansing, said IBM had 350 employees on the Michigan State campus.
“They’re still growing,” she said. “They should be closer to 500 when they are fully built out.”
Moret said the IBM facility in Baton Rouge is different from those in Michigan and Missouri. The East Lansing office does a significant amount of state outsourcing work through a partnership with the Michigan government. Under the agreement IBM has with Louisiana, the company will not be able to count any job that entails contract work with the state toward meeting its commitment of 800 jobs. The Missouri office handles technical and infrastructure support, not the software development that will be done in Baton Rouge.
“More generally, IBM’s technology center in Baton Rouge also will be distinct from those in Michigan and Missouri in that it will be part of a large, mixed-use, riverfront development that will be a major catalyst for downtown revitalization,” Moret said in an email. He noted that IBM will have to report its Baton Rouge job numbers twice a year and the information will be posted on the LED website.
Mullins said bringing in IBM has helped the IT sector in East Lansing by letting software programmers know they have options of who to work for. “A lot of software programmers work for a company on a specific project and once the project ends, they go work for another company on another project,” she said. “The more IT options there are, the better chance of holding on to that workforce.”
By bringing IBM, Brooks said it helped reveal that Columbia had a gap of more IT jobs than people to fill them.
“We discovered how many of our existing employers had a sizeable IT workforce that were not classified as IT companies,” Brooks said, referring to a number of major insurance companies that have offices in the city. “We have worked to help not only IBM attract the workforce they need, but backfill positions our existing businesses would lose to the new company.”
The gap of IT jobs is beginning to get filled in, because of the people IBM has attracted to Columbia and the increase in skilled local graduates.
“We still don’t have a surplus of IT workers, but every month that goes by, the balance is more in play,” Brooks said.