Site selection gets computerized
In 1971, this magazine dedicated the June issue to highlighting economic development efforts happening across Missouri — including an innovative use of primitive computer power.
At the time, economic development was already a very competitive field.
“The businessman searching the nation for a new plant location or expansion site finds the welcome mat out and doors open everywhere he turns,” according to an article in the magazine. “Every forward-looking community and every state government is competing to attract new industry, making the industrialist’s search ever more complex and difficult.”
To help Missouri stand out from the crowd, the research section of the Missouri Division of Commerce went high-tech, becoming the “first in the nation to adapt the speed of the computer as a tool to aid industry in site location.”
Bringing a computer into the commerce division vastly changed how workers there helped business leaders identify possible expansion sites. The article states that the division wanted to “modernize and improve on traditional methods of manually searching through agency files and relying on staff members’ memories to reply to businessmen’s requests for industrial site data — the system still used by most other states.”
The state decided that the right computer for the job was an IBM System/360 Model 30.
The article doesn’t include how much the state paid for the computer, but it was certainly a lot by today’s standards. When it was introduced, a basic IBM System/360 Model 30 could be rented for $2,700 per month or purchased for $133,000. Full-featured versions of the system cost up to $5.5 million. Those are the original prices, not adjusted for inflation.
The commerce division used the new computer to store relevant information about Missouri communities. Staff members inputted roughly 27,000 data points on things such as local services, transportation options, utilities, schools, wages, taxes, recreation options and available industrial sites.
A company leader considering expanding in Missouri would fill out a survey and indicate whether these services and site options were “critical,” “desirable” or “unnecessary.”
This survey was fed into the computer. Then, 12 minutes later, the computer would provide “a printout in sentence form that gives the industry a list of the communities in Missouri that can provide the exact type of location wanted.”
The article goes on, saying Missouri’s computerized site selection system “has been the subject of inquiries about its operations from a number of other states and several foreign countries.”
Missouri Division of Commerce Industrial Director Ray Jeffrey said that while the computer helped, it didn’t replace the hands-on aspects of wooing business investment to Missouri.
“Use of the computer eliminates a lot of the footwork in narrowing down the number of sites that provide the specific facilities needed by an industry,” he said. “But company officials still want to take a personal look at a community before committing themselves toward new business and plans for growth. These are subjective measures that you can’t put to a computer.”
The division would often arrange “tours of prospective sites … using the division’s own twin-engine, six passenger aircraft for the convenience of businessmen who require the time-saving speed of air travel.”
The June 1971 issue of Missouri Business is also notable because it included a typed letter from Gov. Warren E. Hearnes in which he pitched the state to potential business investors.
“It is fitting during this 150th Anniversary of Missouri Statehood that an invitation be extended to businessmen throughout the country to make an industrial home in our state,” the governor wrote. “We are pleased to assist in this endeavor. Missouri offers much to the business community in site locations, hard working, diligent people, ‘livability’ surpassed by no other state, and a government that maintains concern over the profitability of its business sector. A good business climate exists, as is evidenced by a steady increase in new plant locations and expansions.”
William N. Kelley, a New Haven businessman who was serving as the president of the Missouri Chamber of Commerce and Industry, shared his sales pitch as well.
“Good and reasonable utilities, resourceful banks, a state government that is industrial development minded all add up to a favorable climate for growth — growth for the individual and the enterprise,” he wrote. “You too can grow faster profitably in Missouri; we would like to welcome you to be a part of our future.”