Posts Tagged ‘foreign direct investment’

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Investments, Exports Create A Better Bargain for the United States

August 1, 2013

This post contains external links. Please review our external linking policy.

Francisco J. Sánchez is the Under Secretary of Commerce for International Trade.

President Obama wants to create “a national strategy to make sure that every single person who’s willing to work hard in this country has a chance to succeed in the 21st century economy.”

It’s a better bargain for the middle class.

At the International Trade Administration, we are proud that our mission is a key part this strategy. As President Obama pointed out in Chattanooga on Tuesday, foreign direct investment (FDI) and exports are key to supporting middle class jobs throughout the United States.

As we’ve noted previously, FDI in our country supports more than five million American jobs. The United States’ record-setting growth trend in exports supported nearly 10 million jobs nationwide in 2012.

The Obama Administration is hard at work to make sure that exports and investment grow – because their growth supports jobs at home. As part of the administration’s efforts,  I’m very excited that we are hosting  the upcoming SelectUSA 2013 Investment Summit. As the President said earlier this week, this conference will connect business leaders from around the world with local leaders “who are ready to prove there’s no better place to do business than right here in the United States of America.”

Pre-registration for the Summit is open now, and I know it will be the premier event for domestic and international investors looking to do business here.

President Obama has laid out his strategy to support economic growth and American jobs through FDI and export promotion. We are ready to support it and take it to the next level.

You can learn more about the SelectUSA Summit at selectusasummit.com.

For businesses looking to begin exporting or expand their current export portfolio, please contact your nearest Export Assistance Center for assistance.

Now, let’s get to work.

You can read the president’s entire speech as prepared for delivery. An excerpt is below: 

Number four, we’ve got to export more. We want to send American goods all around the world. A year ago, I signed a new trade agreement with Korea, because they were selling a lot of Hyundais here, but we weren’t selling a lot of GM cars over there. Since we signed that deal, our Big Three automakers are selling 18 percent more cars in Korea than they were.

So now we’ve got to help more of our businesses do the same thing. I’m asking Congress for the authority to negotiate the best trade deals possible for our workers, and combine it with robust training and assistance measures to make sure our workers have the support and the skills they need for this new global competition. And we’re going to have to sharpen our competitive edge in the global job marketplace.

Two years ago, we created something called SelectUSA. This is a coordinated effort to attract foreign companies looking to invest and create jobs here in the United States.  And today I’m directing my Cabinet to expand these efforts. And this October, I’m going to bring business leaders from around the world, and I’m going to connect them to state leaders and local leaders like your mayor who are ready to prove there’s no better place to do business than right here in the United States of America.

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United States Returns as the Global Capital for Global Capital Investment

June 28, 2013

Aaron S. Brickman is the Acting Executive Director of SelectUSA.The SelectUSA Investment Summit will be held )ctober 31 to November 1, 2013 in Washington DC. Details are available at SelectUSA.gov

Global investors are “rediscovering” the United States.

This week the consulting firm A.T. Kearney published its annual Foreign Direct Investment (FDI) Confidence Index. The Index surveys top executives from more than 300 leading global companies – representing more than $2 trillion in annual global revenue – on where they are directing their investment strategies. For the first time since 2001, the United States ranked #1 on this list, retaking the top spot!

The Department of Commerce’s SelectUSA program has seen this trend coming through the work we conduct on a daily basis. Companies both large and small increasingly understand that the United States is the destination of choice for capital, and an unparalleled place to invest and do business.

Markets such as Brazil, Canada, China, and Europe will continue to receive significant cross-border investment. However, the survey suggests that the resurgence of investment in American manufacturing is not just a temporary trend but the new reality.

A.T. Kearney’s survey reflects SelectUSA’s core mission: to assist U.S. economic development organizations (EDOs) in their efforts to attract global investment, and to work with companies throughout the world seeking to establish or expand operations in the United States.

On October 31st and November 1st, SelectUSA will host its inaugural SelectUSA 2013 Investment Summit in Washington, DC. The purpose of this unprecedented two-day event is to connect investors – both foreign and domestic – with U.S. EDOs at the state, regional, and local levels to help promote and facilitate business investment in the United States. The Summit will bring together top-level corporate executives and investors, EDO representatives from across the country, senior White House and Administration officials, industry experts and service providers.

The Summit is generating great interest in the business community, further bolstering what A.T. Kearney’s survey has told us:  the United States is open for business!

To pre-register for the SelectUSA Investment Summit, please go to www.selectusasummit.com.

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Why Companies Choose the United States: Beyond Incentives – Part 2

April 17, 2013

Rebecca Moudry is a Manager with SelectUSA, part of the International Trade Administration. This post is a follow-up to an earlier post published on the Tradeology blog. 

This chart shows that businesses are looking increasingly at proximity to markets, market growth potential, availability of skilled workers, and industry climate as reasons to choose a location to set up shop. Financial incentives matter less now than in the past, according to the study done by fDi Markets.

Based on data from fDi Markets.

In the SelectUSA session at the 2012 International Economic Development Council (IEDC) Annual Conference, Gene DePrez of Global Innovation Partners described the multiple tradeoffs companies consider as they make a global location decision. We discussed some of the considerations they make in an earlier post.

Sharing insights gained through over 30 years of experience advising businesses on global location strategy and site selection, DePrez concluded that incentives are just one factor among many that drive a transaction decision. According to DePrez, access to markets, talent, innovation, strong intellectual property rights, and key suppliers are among the critical fundamentals a company considers when determining where to invest. This jibes with data gathered by fDi Markets. They then weigh these against the costs and risks, and unique opportunities of each location.

In the end, there is not a uniform recipe for how or where a company decides to locate.

“The advantages of each candidate location will be traded against the one-time and long term costs and potential risks among other alternatives,” DePrez said. “Particularly when comparing global candidates, costs are just one piece, and incentives may be more or less important depending on the sector, type of operation, company culture and priorities of the CEO.

“Often they are important to offset one-time costs for training, or relocation, or to level the playing field through infrastructure improvements,” he added.

The Toshiba International Corporation is an example of the location decision process for a global firm. In 2011, this Japanese-based company began considering multiple locations to expand U.S. manufacturing to produce high-performance drive motors for hybrid electric and electric vehicles. Matthew Bates, a Plant Manager, says Toshiba’s motivating need was to be closer to their primary customer. A skilled and highly trained workforce was also critical, along with the need to maintain or reduce production costs.

After considering multiple locations and weighing tradeoffs, Toshiba settled on reconfiguring their existing Houston plant to accommodate the hybrid electric motor line. Their decision has paid off through:

  • Shorter lead times (from six weeks to four days)
  • Reduced currency risk
  • Decreased shipping costs
  • Decreased overall costs through eliminating duties, inventory holding and warehousing costs

“Not only are we saving money, but we have improved communication with suppliers, are more responsive to our customer, and have been able to preserve and even grow the Toshiba company culture in our Houston production site,” Bates said.

“Expanding in the U.S. has been a huge success for this product line and our company.”

SelectUSA is the government-wide initiative to promote and facilitate investment in the United States. Contact SelectUSA at http://www.SelectUSA.gov or +1-202-482-6800.

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Investing In The U.S. Is Good Business and Helps To Create Jobs

April 15, 2013

Aaron S. Brickman is the Deputy Executive Director of SelectUSAThe SelectUSA Investment Summit will be held )ctober 31 to November 1, 2013 in Washington DC. Details are available at SelectUSA.gov

U.S. Deputy Commerce Secretary Rebecca Blank just announced that the inaugural SelectUSA Investment Summit will be held in Washington, DC from Oct. 31 to Nov. 1, 2013.

The Summit will be the first of its kind, connecting businesses and investors from around the world with economic development organizations (EDOs) from across the country in an effort to promote investment in the United States and support the creation of American jobs. The two-day event will also amplify the work of SelectUSA in delivering on President Obama’s agenda to increase direct investment in the United States as a way to spur economic growth and create jobs.

UPDATE: Register For the Summit Online

The Summit will bring together international and domestic investors; national, regional, state and local economic development organizations (EDOs); senior Obama Administration officials; business leaders; and industry and technical experts, providing them with a unique opportunity to discover all the reasons why the U.S. is the ideal destination for companies that are weighing options for locating or expanding  their operations. During the two-day event, participants also will be able to explore potential investment opportunities in this country, as well as share best practices and build networks.

Our nation presents an unparalleled investment opportunity for domestic and foreign businesses. It benefits from sophisticated industry clusters, first class universities and research and development centers, access to global markets, strong intellectual property rights and a stable legal system and regulatory environment.

In 2012, nearly $168 billion in FDI flowed into the United States. Data from 2012, the latest figures available, indicate that affiliates of foreign firms employed more than 5.3 million U.S. workers at an average salary of nearly $70,000 per year.

These statistics are good, but we can do more to ensure that the U.S. share of global FDI grows even larger. That is why President Obama launched SelectUSA, and included $20 million in his fiscal year 2014 budget to support the program’s implementation.

Located within the International Trade Administration of the U.S. Department of Commerce, SelectUSA leads the federal government efforts to promote the United Sates as the premier global investment destination, and facilitates investment in the United States. The program provides information assistance to the global investment community, serves as an ombudsman for investors, and advocates for U.S. cities, states, and regions competing for global investment.

We look forward to broad participation in the SelectUSA Investment Summit─a not-to-be-missed opportunity for both  investors and EDOs. To learn more, please visit http://selectusa.commerce.gov/selectusa-investment-summit.

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Why Companies Choose the United States: Beyond Incentives

April 12, 2013

Rebecca Moudry is a Manager with SelectUSA, part of the International Trade Administration.

With the largest economy in This chart shows that businesses are looking increasingly at proximity to markets, market growth potential, availability of skilled workers, and industry climate as reasons to choose a location to set up shop. Financial incentives matter less now than in the past, according to the study done by fDi Markets.the world, the United States has always been a natural choice for companies from around the world to invest and grow. But with increasing global competition, what are the drivers that continue to rank the United States as the largest recipient of foreign investment in the world?

Reading many local U.S. news stories, it may sometimes appear that financial incentives are the decisive factor in many international or domestic business location decisions, but business location experts and companies themselves indicate that incentives, though important, are seldom the sole or even primary driver in a company’s strategic decision regarding where to locate operations.

According to information collected by fDi Markets, financial incentives (including tax or funding incentives) have played a minor role in company location decisions over the last nine years and are decreasingly important. Between 2003-2006 only about 10 percent of foreign companies that invested in the United States identified incentives as a primary motive or determinant for their U.S. investment decision. From 2007 through 2012, that number dropped to just below six percent of companies citing incentives as a motive for investment.

Proximity to customers and the growth potential of the U.S. market continue to be the most important motives cited by companies of why they invest in the U.S. In the last few years, the availability of a skilled workforce has grown as a critical determinant for company location; from 2003-2006 to 2007-2012, that factor grew by nearly 70 percent. In 2007, companies began citing a favorable business climate as a motive for investing in the U.S. some 152 percent more than in 2003-2006.

SelectUSA, located within the International Trade Administration of the U.S. Department of Commerce, leads the federal government efforts to promote the United Sates as the premier global investment destination and facilitates investment in the United States. SelectUSA provides information assistance to the global investment community, serves as an ombudsman for investors, and advocates for U.S. cities, states, and regions competing for global investment.

Contact SelectUSA at www.SelectUSA.gov or +1-202-482-6800.

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Firing on All Cylinders: FDI Fuels Jobs in South Carolina, U.S.

April 2, 2013

Michael Masserman is the Executive Director for Export Policy, Promotion & Strategy for the International Trade Administration.South Carolina flag

We often talk about the synergy between U.S. exports and foreign direct investment in the United States. Last week I witnessed that interplay firsthand at the Robert Bosch LLC manufacturing facilities in Charleston, South Carolina.

Headquartered in Stuttgart, Germany, Bosch invested and began production in South Carolina in 1974. Bosch’s Charleston plant now employs more than 1,700 people in the development and manufacturing of modern gasoline-engine systems, high-precision diesel technology, and cutting-edge automotive safety equipment.

Bosch is a leading exporter of gas cylinders and other products made at their South Carolina plants to the 95 percent of consumers beyond our borders. They are helping to drive U.S. exports of motor vehicles and parts to all-time record highs. In fact, U.S. exports of motor vehicles and parts increased nearly 80 percent from 2009 to 2012, to total $132.7 billion.

A little known fact is that exports from U.S. affiliates of global firms, like Bosch, represent nearly one-fifth of all U.S. exports. That’s why at the International Trade Administration, we focus on the relationship between our work under the President’s National Export Initiative and our efforts to promote investment in the United States through SelectUSA.

South Carolina — and Charleston, especially — has a rich history in trade and foreign direct investment, or FDI. FDI, through U.S. affiliates of foreign firms, now supports 104,300 jobs in South Carolina.

And, the strong base of foreign direct investment in Charleston positions the area to further its already impressive export growth. According to the Commerce Department’s preliminary data — in 2012 — this region exported over $2.4 billion in merchandise shipments. That’s a nearly six percent increase from the year before – all in the face of significant global economic headwinds.

I applaud efforts in Charleston to seize the opportunity to create and implement a regional export plan through the Metropolitan Export Initiative. We are proud to partner with the Brookings Institution to help metropolitan areas across the country incorporate exports into their local economic development strategies, which will help to ensure long-term sustainable economic growth.

Combining efforts of investment and business attraction with exports (a key component of business expansion and retention) will ensure regional economic development across our country becomes even more global in scope.

Companies like Bosch are informing these local planning efforts. The private sector has a critical seat at the table and position to shape export strategies and promotional efforts based on their experiences.

After all, Bosch is firing on all cylinders, and we should take note.

From an initial investment almost 40 years ago, Bosch plants in South Carolina now support advanced manufacturing, R&D, U.S. exports, and skilled jobs where we need them – here at home.

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SelectUSA Brings Investment and Jobs to the United States

January 25, 2012

Barry Johnson is the executive director of SelectUSA and Aaron Brickman is the deputy executive director of SelectUSA

Did you see President Obama’s call to action to invest in America and boost job creation? Well if you missed it check out the White House blog post. Also at the forum, Commerce Secretary John Bryson moderated a panel discussion highlighting foreign direct investment (FDI) as an important source of economic and job growth in the United States.Bar chart showing the impact of Foreign Direct Investment in the United States in 2009. Increase in employmenet by 5%, GDP of 5.1%, Capital Investment of 12%, imports 31%, exports 21%, and research and development 14%. Source: Bureau of Economic Analysis

Currently, the United States is the largest recipient of FDI in the world. In 2010, FDI into the U.S. economy increased to $228 billion from $153 billion in 2009.While the United States has enjoyed this leadership position for decades, the share of FDI to the United States is decreasing. In the 1980s the FDI in the United States accounted for nearly 45 percent of the all foreign direct investment. Today, the United States accounts for less than 15 percent of total FDI flows.

At the Department of Commerce’s International Trade Administration (ITA) we are working to promote foreign direct investment in the United States because it is significantly impacts U.S. exports and jobs. U.S. subsidiaries of foreign companies are responsible for about 21 percent of all U.S. exports and support more than 5.3 million U.S. jobs – that’s about 5 percent of all U.S. employment!

Since taking office, the President has emphasized the unequivocal policy of openness to both foreign and domestic companies that invest in America. SelectUSA, which is housed within ITA, was created by President Obama in 2011 through an Executive Order to promote business investment in the United States.

The United States provides an ideal landscape for companies to build and grow their business. As the President reminded us, “companies are choosing to invest in the one country with the most productive workers, best universities, and most creative and innovative entrepreneurs in the world: the United States of America.”

And there is more. SelectUSA promotes the benefits of investing in the United States, including a strong system of intellectual property rights protection; unparalleled global access through trade agreements representing access to nearly 610 million worldwide consumers; and nearly 36 percent of global research and development expenditures taking place in the United States.

SelectUSA works with firms, economic development organizations, and other stakeholders to provide a comprehensive single point of contact for current and prospective business investors by:

  • Acting as an information clearinghouse and responding to inquiries about the U.S. business climate
  • Serving as ombudsman to help investors encountering confusion, delays or obstacles in a federal regulatory process
  • Advocating on behalf of the U.S. government in a globally competitive business location decision
  • Offering after care to companies that have U.S. investments

Companies and organizations use these services to help make business investment decisions when exploring the U.S. economy.

One of the companies in attendance at the White House forum, Canada-based AGS Automotive Systems, is a recent SelectUSA success story. The Company announced plans to manufacture bumper systems at an expanded facility in Michigan with an investment of $20 million.

Through the Commercial Service Canada’s introduction, SelectUSA met with AGS Automotive during its outreach visit to Toronto in September, 2011. Since then, SelectUSA has worked with AGS Automotive as the company evaluated its location decision among various options across North America.

Financial assistance and incentives offered by the State of Michigan were also pivotal in AGS Automotive’s investment decision. With these plans, the company will create 100 direct new jobs and retain its 50 existing jobs in the U.S. automotive sector.

The President also announced a new partnership between the Departments of Commerce and State to promote investment in the United States in ten priority countries through ITA’s Foreign Commercial Service and supported by U.S. embassies. A White House release explained:

“[t]his pilot effort will dedicate resources from Commerce’s Foreign Commercial Service (FCS) to investment promotion in 10 pilot countries representing 30 percent of foreign direct investment in the United States, expanding to cover 25 countries in 2013 representing roughly 90 percent of FDI.  U.S. Ambassadors will lead these efforts, engaging officials from State and other in country officials to assist investment promotion through business outreach, hosting ‘investment missions’ with governors and mayors, and connecting foreign firms to SelectUSA services.”

The pilot countries will be: Brazil, Canada, China and Hong Kong, France, Germany, India, Mexico, Russia, South Korea, and Spain.

Maintaining America’s industry competitiveness is an ongoing endeavor; however, with programs like SelectUSA, it’s much easier for companies of all sizes and from all business segments to make a sound decision to locate operations here.

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