hat do Finland, Jordan, Namibia and Ghana know that the United States did not – at least until quite recently? They know the importance of marketing their national markets to global investors.
In a period of six months starting last October, a colleague and I attended gatherings of corporate real estate executives, national investment promotion agency heads and regional economic developers at Expo Real in Munich, the World Association of Investment Promotion Agencies in Geneva and MIPIM in Cannes, France. With the exception of a U.S. Pavilion at Expo Real with fewer than a dozen exhibitors, U.S. representation was virtually nowhere to be found at these events.
FDI is approaching $1 trillion annually, if it’s not there already. Yet the U.S. seems content to let projects come to it rather than getting out there at, say, Expo Real, WAIPA and MIPIM, and reminding the global investment community of the United States’ unique and diverse location attributes. I’ve made the point here in past columns that lots of investment does come to the U.S. (think Toyota’s recently announced $1.3 billion plant in Mississippi and ThyssenKrupp’s nearly $3 billion plant that at press time was destined for Louisiana or Alabama).
But how much more would come if the U.S. had a federal strategy to attract FDI – perhaps like those in place in Costa Rica or Mauritius? The burden falls to state and local economic development agencies in the U.S., which do a superb job for the most part of bringing global investment to their areas. See the “Top Groups,” “Top Deals” and “Competitiveness Award” articles in this issue for more on who’s doing what on that level.
As it turns out, the same day my colleague and I were leaving in March for the WAIPA and MIPIM meetings, the U.S. Dept. of Commerce unveiled an “Invest in America” initiative designed to be the primary U.S. Government mechanism to manage inward investment promotion. The International Trade Administration, a unit of Commerce, will manage the initiative. The new effort will not replace work done by the Committee on Foreign Investment in the U.S. (CFIUS), which deals with inward investment projects that have a national security dimension. Nor will it supplant state-level or local economic development programs targeting non-U.S. investment.
Among the reasons Commerce is launching the program is to stanch the flow of misperceptions that can arise when no national voice exists to set the record straight.
“If we do not play an active role in promoting inward investment, we are at risk of having our investment climate perceived around the world only by the occasional difficulty,” explained Franklin Lavin, Under Secretary of Commerce for International Trade, at the launch of Invest in America in March.
“Given the sizable nature of FDI in the United States, there will occasionally be a controversial case that finds its way into the media, so we need to remind our investment partners that the overwhelming majority of investment activity in the U.S. takes place on a normal, commercial basis.”
Other objectives are to provide outreach to potential investors around the globe, to make Washington less complex to foreign investors by cutting red tape where possible and to support state and local economic development efforts. The program is dedicated to remaining neutral where specific U.S. locations are concerned, and it will likely take some time to sort out specific agendas between the existing state and regional agencies and this new federal entity. It will take some time to run smoothly, but it’s being done all over the world.
Till next time,
Mark Arend