Technology in Site Selection: Disruption is CertAIn

Tech disruption has become commonplace in every facet of life and commerce.? We are daily bombarded by new announcements of amazing new capabilities in generative artificial intelligence (AI), cybersecurity, and data-driven analytics. Have we now reached the point where we can ask Chat GPT to choose the optimal location for our next manufacturing plant?? Do we still want (or need) human experience to ensure that intangibles and key insights into market conditions and trends are not lost during location evaluation and site selection?

The probable answers are no, or not yet.? However, with every headline, companies expect increasing technological sophistication from their partners, including their site selection consultants.? Like most industries, site selection has benefitted from advances in technology (many spurred by the pandemic), particularly from remote collaboration tools like video conferencing and project management platforms. We can now do more with less travel, facilitating scheduling and allow broader participation by client team members. Drones are increasingly giving us better access to visual inspections of sites, before and during fieldwork.? (We’re even beginning to see Virtual Reality (VR) and Augmented Reality (AR) tools utilized for introductory virtual visits, though this is still far from the norm.)??

In our upcoming multi-part blog series, we’ll take a closer look at three of the biggest tech disruptors in the site selection industry: artificial intelligence (AI), data/site visualization tools, and that old (but new again) standby, geographic information systems (GIS). We’ll share how these tech disruptors are impacting how we as site selection consultants do our work, and how technology is changing the client experience.?

First up – our take on AI.

AI (Artificial Intelligence)

“No industry sector – the site selection industry included – is immune from the disruption brought on by the rise of artificial intelligence (AI).”

“The Potential Limitations of AI in the Site Selection Industry”, Site Selectors Guild d

In its most recent survey on the topic, the Site Selectors Guild concluded the anticipated benefits of AI are numerous, “including greater efficiencies through the automation of tasks, enhanced decision-making, and motivating an innovation mindset.”? However, the report also warns of the potential pitfalls from sole reliance in AI, especially in the world of site selection, where a poor choice has dire consequences and relying blindly on on-line information is dangerous.

In this most recent study, the Site Selectors Guild tested three AI platforms on a basic site selection inquiry.? The result?? There were commonalities among the shortlisted locations recommended by the platforms, but there were also deviations, with recommendations varying according to which AI platform was used. This was perhaps to be expected. The AI results also differed from those of the time-tested “human” approach.? One might be tempted to wonder whether AI knows something the human site selector doesn’t, but the inconsistencies in the AI responses disabuse us of that notion, as asking the same platform the same question multiple times yielded multiple versions of the short list.

As site selectors, we’re eager to use AI to achieve greater efficiencies, but there are four reasons we do not worry about these current applications taking over our core jobs anytime soon:

1. Data Limitations:? As past trends continue and evolve, more and more of the data metrics we use will be turned over to computers – and that will be a welcome assist, but there will be limitations for the foreseeable future:

• Location variables are often too customized and nuanced, and a detailed, online record of past and recent location decision-making is sparse at best. Artificial intelligence simply does not have access to the needed information, as it doesn’t exist in conventional databases. Nor has AI yet been trained to understand which tax rate, or utility rate, or industry classification to choose based on project parameters. Finally, AI cannot yet pick up the phone, have a conversation, and make a judgement call and a decision, as a human might.
• All data has limitations; site selection consultants study these limitations and, by applying their experience, know how to avoid being misled. For example, Census and Bureau of Labor Statistics data is sometimes “suppressed” and not shared for a given market due to disclosure limitations. Further, building apples-to-apples comparisons of data across geographies of varying sizes and market dynamics is both a science and an art, honed by site selection consultants over years of experience.? Until and unless AI tools are sufficiently trained, they will lack the judgement necessary to reliably interpret data. Further concerns exist over artificial intelligence’s susceptibility to efforts to bias and/or manipulate online information in ways which could influence results.

2. Fieldwork Assessments:? Computers are not good at the subjective assessments and interactive dialogues that comprise fieldwork. They cannot assess the business friendliness of a community. They do not have the ability to work with local zoning authorities and neighborhood groups to overcome potentially fatal project roadblocks. They are currently unable to predict whether relocating staff will enjoy a warm welcome in their new destination.

3. Recognizing Opportunities to Change the Facts:? AI cannot yet assess and predict the possibility of changing the facts about a location.? It cannot, for example, recognize the potential to negotiate a new rate class for a large power user, or the likelihood that a permit could be expedited. Very few sites are perfect from the outset.? Perfection requires vision, as well as collaboration and negotiation with local leadership.? Site selection consultants are experienced in managing these considerations, and we have the industry contacts and economic development relationships to explore and quickly determine what’s possible.

4. Consensus Building:? Even the most rudimentary location algorithms are capable of scoring and ranking a set of competing destination choices.? However, they are presently unable to facilitate consensus within the company’s management team without the intervention of a human site selector or similar advisor.? The perspective of the CEO will inevitably be different than that of the HR officer, the CIO, head of operations, or the CFO, yet each perspective needs to be considered and the internal political context must be acknowledged before a good location decision can be made.??

Site selection is about much more than data-driven outputs.? It’s about making multi-faceted, strategic decisions that will impact a company’s future performance for many years. Advising companies on these complex decisions is our role as site selection consultants.? As long as humans are running companies, they will be best served by human site selection experts.? Once AI takes over corporate governance, however, well . . . all bets are off!

This is the first in a 3-part series on Technology in Site Selection.? Be on the lookout for the next installment on the topic of Geographic Information Systems, coming soon!

This piece was written in collaboration with my BLS & Co. colleague Carissa Foley .