International Update

Is social engineering good for business? Across the world’s markets, “economic empowerment” initiatives are emerging to help disenfranchised locals in the community contribute. Each market is different, but any business looking to establish in one of these markets needs to understand the impact on their business. In the United Arab Emirates, this is “Emiratisation,” and other markets in the region have similar mechanisms.

Thailand can’t seem to catch a break. To outsiders recently, it appears to be in a state of constant turmoil, with violent political protests and natural disasters making the news with regularity. Consider the most recent flooding, in late 2011, which was one of the worst in the past 50 years. The main river, the Chaophraya, literally was overwhelmed and changed its course to submerge much of the northern Bangkok metropolis.

It’s a time of great hope and great uncertainty in Egypt. Hope springs from the broadly successful arrival of democratic politics delivering a credible result in the presidential elections held at the end of May. President-elect Mohamed Morsi has called for unity after winning 51.7% of the vote. The next few months may see renewed tension between the President’s Muslim Brotherhood, the Army, which has decades of political, military and economic power under its command and the countless thousands of “Arab Spring” democrats whose protests brought down Hosni Mubarak, amid events that sparked protest in many Arab lands.

Iraqi opportunities. These two words don’t seem a good match, unless perhaps in the context of the oil or security businesses. But the phrase makes sense in Iraqi Kurdistan, the autonomous northern region of Iraq, where early commercial investors are now on the scene. Across many areas of Iraq, peace is fragile and daily life can still be unpredictably dangerous. But growth is returning to Iraqi Kurdistan led from its capital, Erbil. Brands such as Sheraton, Hilton, Porsche and Sony are entering Kurdistan looking to access the potential of this region of 4 million people. Nissan has opened its largest service center in the Middle East, and its new airport, opened in 2005, has one of the longest runways in the world.

The Johor Bahru region in southernmost Malaysia is emerging as a key regional oil and gas hub, and the Iskandar Regional Development Authority (IRDA), which is overseeing the 2,217-sq.-km. (856-sq.-mile) Iskandar Malaysia development project, will play an important role in fostering this sector. Iskandar Malaysia comprises five component areas, or flagship zones, that in their own right will bring forth new commercial, residential, educational and industrial developments designed to transform south Johor into an economic engine for Malaysia and Southeast Asia.

Three Latin American locations have a rare combination of international air service, adjacent higher education resources and available sites – a powerful combination for the right site selector.

Two Atlanta-based companies are making the case that not all new investment in China is heading to the hinterlands, where many believe more advantageous labor rates can be found relative to coastal sites. An eastern China location still delivers the labor availability and logistics edge they require as the country’s huge domestic market takes on a more central role in these companies’ growth strategies.

Québec-based IT executives at multinational computer services giants attribute the success and expansion of their enterprises to being located in Québec. An increasingly bilingual and skilled work force, higher education resources, proximity to Europe and the U.S. Northeast and a business climate that encourages capital investment are some of the assets they identify as drivers of their ability to compete. More specifically, they compete successfully with other subsidiaries of their parent companies worldwide for capital investment, or they complement those subsidiaries as no other operation can, they maintain.

Angola has still to catch up with being oil rich and at peace with itself. A decade has passed since its long civil war ended, and in many ways it has made remarkable progress. Yet much remains to be done – from building infrastructure to reviving agriculture and raising much of its population out of poverty.

An expanded list of Best to Invest European cities adds representative metros of Austria, Italy and Spain on the Western side and Estonia, Turkey and the Slovak Republic in the East (see charts). These metros captured enough new and expanded facility investments in 2011, and were deemed superior to other metros in their regions in the LocationSelector.com analysis from IC Associates outlined on page 28, to be recognized here for consideration when European locations are in play.

China and India metros dominate this year’s Best to Invest ranking of Asia-Pacific cities — determined by Site Selection’s New Plant Database, LocationSelector.com analysis from Amsterdam-based IC Associates and a survey of global site consultants. But there’s plenty of activity elsewhere in the region, particularly in Sydney, Australia, and Seoul and Ulsan, South Korea, which ranked sixth, seventh and eighth, respectively.

Dow Corning, which has had a presence in Belgium since the early 1960s, is adding two major projects to its footprint south of Brussels. The company’s European headquarters, home to about 700 employees, is based in Seneffe, about 40 km. (25 miles) south of Brussels and about 30 km. (19 miles) north of the border with France. Dow Corning recently opened its Solar Energy Exploration and Development (SEED) center on its Seneffe campus and will soon open a major distribution center nearby.

In recent years, Brazil has emerged as the top destination country for foreign investment in Latin America, attracting a third of foreign investment projects into the region, and creating 50,000 new jobs in 2010. Brazil increased six positions as a global destination of foreign projects, reaching fifth place in 2010, after the U.S. and the rest of the BRIC countries, according to the IBM-PLI Global Location Trends report 2011.

Big investments by big companies come on the heels of KORUS approval, but aren’t necessarily U.S.-focused.

IBM’s 2011 Global Location Trends report, released in November, sheds light on how Mexico remains the leading recipient of foreign investment in Latin America.

Japan’s Panasonic Corp. is one of the latest multinationals to toss its hat in Malaysia’s solar industry ring. Malaysia’s Kulim Hi-Tech Park, which is becoming a nexus for solar module production, is also home to high-tech companies such as Infineon.

Economist Thomas Faranda, in a spring 2011 talk before the Industrial Asset Management Council, called Canada a sleeping giant, albeit one that’s about to wake up. And its alarm clock is perched on its Western half.

Even if they are not permanent jobs, 6,500 direct and indirect jobs will boost any area’s economic prospects. Chevron Australia’s Wheatstone Project, a major LNG plant investment on Australia’s northwest coast, will have that effect and will result in revenues to the government of about AU$20 billion (US$19 billion) and $17 billion (US$16 billion) to Australian businesses over the next 30 years.

Perched on the southern tip of the Korean peninsula is the city of Yeosu. Known for its ocean ecology, the city of just under 300,000 also boasts an ocean-port economy driven by its own historic port and the nearby Port of Gwanyang, home to Korean giant POSCO’s largest steelmaking complex in the world, as well as the Gwangyang Bay Area Free Economic Zone (GFEZ).

In January 2010, based on Ontario’s feed-in tariff scheme for renewable power put into place in 2009, Samsung C&T and Korea Electric Power Corp. (KEPCO) signed a C$7-billion renewable energy agreement with the provincial government that would include multiple solar and wind farm projects as well as a commitment of four in-province manufacturing complexes from Samsung.

Energy businesses such as Norway’s Aker Solutions and U.S. firm FMC Technologies are landing more jobs on Scottish shores, as well as in London. Food companies such as Kraft are growing from Ballymena to York. Car companies Jaguar Land Rover, Lear and Rolls-Royce Motor Cars (a unit of BMW) are growing and steel is rolling.

Germany: Is Germany Europe’s Safest Bet?

Does the photograph on this page frighten or inspire? How a company or a country answers that question goes a long way toward explaining the maturing and increasingly integrated global role of China as a production, research, talent and market base.