As companies seek to find the optimal place to locate, it has become challenging to find geographies offering long-term labor scalability and access to a growing customer base.These challenges consistently impact the majority of operation types including manufacturing plants, distribution centers, retail, call centers, shared service centers and headquarters operations.  Therefore, Site Selection Group has carefully evaluated regional population clusters across the United States and identified 10 mega-regions that could be future “Megalopolis” areas to consider for your next project.

What is a ‘Megalopolis’ area?
A megalopolis or mega-region is a term originally used by Patrick Geddes in his 1915 book, “Cities in Evolution.” It is often defined as a chain of roughly adjacent metropolitan areas where resources may often be shared. One of these primary resources is people who buy goods and services as well as work in a variety of industries. These regions will often have higher than normal population growth due to the migration of workers to the region, younger demographics and desirable quality of living. 

Why should you locate there?
Many factors make emerging megalopolis regions great locations to expand. These reasons may include the quality of infrastructure, depth of the education system, healthcare services, commutability, labor market longevity and overall amenities. The key is to find these regions in their early stages to maximize the longevity of the site before they become congested, overly competitive and cost prohibitive.  

Where should you locate within a megalopolis?
Finding the best place to locate within the region will depend on the project type and the location strategy of a company. The traditional approach would be to locate in the heart of the key regional anchors. These anchors would be one of the primary metro areas in the mature suburban and urban zones. These areas will have more competition, which will cause wage inflation and more competition for labor and customers.

An alternative strategy is the expansion into the tertiary areas of the megalopolis in the direct line of projected growth. This area will typically be wedged between two or three of the key metro-area anchors making up the mega-region. The key benefits include lower labor costs, less competition, cost-effective real estate, aggressive economic incentives and slower wage inflation. 

Where are the emerging megalopolis areas?
There are many regions that could potentially become megalopolis areas similar to Tri-State New York, Northern California and Southern California. After extensive research and analysis, Site Selection Group has identified 10 of these regions that are outlined in the following table:

                Emerging Megalopolis Areas

Megalopolis Region   Metro Areas
  within Region
State Total Population 2014 Projected Average
Population Growth 2014-2019
Ohio Valley   Indianapolis (IN), Anderson    (IN),  Richmond (IN),
  Columbus (IN), Louisville     
  (KY), 
Lexington (KY),   
  Cincinnati (OH),  
Dayton 
 (OH), Columbus (OH)
IN, KY, OH 9,728,939 0.84%
North Central Texas   Dallas-Fort Worth, Denton,
  Gainesville, Corsicana,
  Stephenville, Sherman-
  Denison
TX 7,083,121 7.16%
Central Florida   Lakeland-Winter Haven,|
  Sarasota, Tampa-St.   
 Petersburg,

 Orlando, Melbourne-Palm
 Bay
FL 6,995,835 5.43%
Greater Houston Region   Beaumont, Galveston,
  Houston, Port Arthur
TX 6,740,099 7.14%
North Carolina Region   Charlotte, Winston-Salem,
  Greensboro, Durham,
  Raleigh, Hickory
NC 6,137,218 4.50%
Central Colorado   Boulder, Colorado Springs,
  Denver, Fort Collins,
  Greeley, Pueblo
CO 4,470,058 6.94%
South Central Texas   Austin-Round Rock-San
  Marcos,
Killeen, Temple,
  San Antonio-New
  Braunfels
TX 4,426,664 9.08%
Tennessee Triangle   Nashville, Murfreesboro,   Chattanooga, Knoxville TN 3,079,828 3.32%
North Central Utah   Logan, Ogden,
  Provo, Salt Lake City
UT 2,351,516 6.53%
South Texas Border   McAllen-Edinburg,
  Brownsville-Harlingen
TX 1,344,078 4.85%


Conclusions

As the economy continues to expand, it is essential for companies to consider where they locate future operations in order to maximize the return on their investment. The megalopolis regions identified provide a great example of how companies can strategically evaluate their next expansion. To support this trend, many regional economic development groups are forming to more effectively market the entire region. The mega-region location strategy is one of many strategies that companies should consider when evaluating all their location alternatives.

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