Before Erik Johnson, assistant professor of economics, even set foot on the University of Richmond campus as a new professor in May 2015, he stopped by the Greater Richmond Partnership (GRP).
“They wanted to find ways to get new, Fortune 1000 businesses to move their company’s headquarters to Richmond,” Johnson said.
He was about to start teaching economics at the Robins School in the fall, but Dr. Richard Coughlan, then senior associate dean, approached him about starting some new research a little early.
“During my tenure as senior associate dean, we had built a strong relationship with GRP. In the spring of 2015, GRP’s leaders asked about the possibility of having one of our faculty conduct research to address some of their most important economic development questions,” Dr. Coughlan said. “Fortunately, our economic department had been successful in hiring Erik Johnson, and he began his research that summer."
“There was a big hole, no one was sure what made certain headquarters move to which cities and why,” Johnson said, “and that’s something we wanted to find out.”
Since then, he has worked closely with GRP to find patterns and determine how to make Richmond a strong destination for Fortune 1000 companies.
He looked at which companies were likely to move in the next five years, narrowed it down to about 250, then had to limit it even more to companies that would consider a city like Richmond.
“What’s been really exciting to me is that Richmond is a great incubator for business, and there are a lot of entrepreneurs in this city,” Johnson said. “We have something unique to offer.”
Through his research, he identified key new insights into what determines the city a company will choose if it is relocating. These insights are tied to industrial composition of origin and destination cities, business lifecycles, and the role of professional business networks. Which is a breakthrough for GRP according to its president and CEO, Barry Matherly.
“It’s a great asset being able to better apply our resources and to have some intellectual property that’s helping guide how we invest private sector and tax money,” Matherly said, explaining that Johnson’s research yielded much more benefit for GRP than he expected.
“We have not found any regions that have combined to create a predictive model around Fortune 1000 companies like Erik has done,” Matherly said. “So it is very exciting that this is the first model of its kind. Having universities like Richmond bring their bandwidth of creative and mental talent to help guide how we recruit companies may be the future of economic development as we know it.”
“It’s relatively sophisticated research with clean outcomes that I think can really do a lot for this city,” Johnson said.
And that is why Ben Napierala, ’18, wanted to be a part of it.
Napierala took Urban Economics with Johnson as an elective his sophomore year, and knew he wanted to help him with his research.
Napierala spent the entire summer of 2016 helping Johnson identify key factors that entice businesses to relocate their headquarters, which he says helped him land his internship for the summer of 2017 in economic consulting at FTI Health Solutions.
“I learned a different way of thinking,” Napierala said. “I learned how to put together clean data, how time consuming that can be, and how important it is to the success of the project.”
The two are hoping their research will make a difference in Richmond’s future.