Archive for October, 2019

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Richmond, Virginia: Providing a Soft Landing Since 1607

October 29, 2019

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

The Greater Richmond Partnership, Inc. (GRP) is the lead regional economic development organization for the City of Richmond and the counties of Chesterfield, Hanover and Henrico in Virginia.

This post is part of SelectUSA’s EDO Spotlight series, highlighting the work of EDOs around the country recruiting foreign direct investment, how that work supports jobs and economic growth across the United States, and how SelectUSA partners with EDOs to support economic development.

You could say that the first foreign direct investment occurred in 1607 when English settlers founded the Richmond Region in Virginia. Soon thereafter the nation’s first hospital was built, the first university was chartered, and the first ironworks were established.

Richmond VA guest blog 102919

Photo via Creative Dog Media

Today, the Richmond Region is home to more than 220 international firms from 26 countries employing 24,600 residents. From advanced manufacturing to supply chain and finance to technology, international firms love the region’s quality of life and affordable business costs.

The biggest challenge for international companies is finding the right location and much like explorers John Smith and Christopher Newport, businesses are still finding their way to the Greater Richmond Region:

  • Sabra Dipping Company operates the world’s largest hummus factory in the region.
  • A locally-based Rolls-Royce manufacturing facility anchored two suppliers, Erodex and Pryor Technology. The two UK-headquartered companies were seeking to improve existing customer relations while expanding its offerings.
  • German company iMPREG Group expanded its operations with a North American headquarters.
  • Polykon Manufacturing, a joint venture between two Air Liquide entities (France), is completing its $60 million facility to produce consumer cosmetics.
  • ERNI Electronics, Inc., a Swiss-based manufacturer of electrical connectors for the automotive, medical, and communications fields, is investing $25 million to establish a new 80,000-square-foot facility.

The United States is the largest economy in the world, so opportunities abound for new businesses. However, most of our clients are adapting from their home market with different business cultures, systems and regulations. GRP encourages international firms to maximize their efforts and resources by taking advantage of expert advice and doing things right the first time. When a company visits the Richmond Region, GRP schedules an itinerary loaded with meetings with industry leaders, local partners and service providers.

GRP’s Global Assistance Program is a one-stop shop designed to provide these essential connections for firms exploring opportunities in the U.S. market. Our roster of referral partners and experienced professionals have a proven track record with international businesses. Company information is always kept confidential and the first meeting with any of our partners is complimentary and without obligation. Available services, include legal advice, , financing, development and real estate, insurance, and marketing.

But don’t take our word for it. In fact, many of GRP’s former clients have served as the best salespeople for the Richmond Region. Several firms even serve on GRP’s International Advisory Committee, which provides valuable expertise and insight for companies considering the U.S. market.

It’s a lot easier following an expert’s map than stumbling through unchartered territory.

For more information on GRP, please visit the organization’s website at grpva.com.

About SelectUSA

Housed within the U.S. Department of Commerce’s International Trade Administration, SelectUSA promotes and facilitates business investment in the United States.

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Key Takeaways from BEA’s Latest FDI Data

October 22, 2019

Kimberly Aagard is a Research Analyst at SelectUSA

With the latest update of the Bureau of Economic Analysis (BEA) foreign direct investment (FDI) data recently released, the Investment Research team at SelectUSA couldn’t resist an opportunity to delve into the numbers and to follow up from our colleague’s previous post.

In 2018, the inward position of FDI in the United States totaled $4.3 trillion, which was an increase of eight percent from 2017. [Note: This statistic measures investment from the foreign ultimate beneficial owners (UBOs) that drive the decision to invest in the United States.] Over the past five years, the compound annual growth rate of the inward FDI position in the United States has been a strong 9.8 percent.

The largest six markets by UBO maintained their 2017 rankings of FDI position into the United States in 2018: in order, the United Kingdom ($597.2 billion), Canada ($588.4 billion), Japan ($488.7 billion), Germany ($474.5 billion), Ireland ($385.3 billion), and France ($326.4 billion). Together, these markets were the ultimate point of origin for more than 65 percent of all FDI in the United States – almost $2.9 trillion!

top 6 sources of US FDI 102219

Many of the markets that are the largest sources of FDI into the United States also have FDI positions that are growing quickly. Belgium, Bermuda, Canada, China, Ireland, and South Korea are among both the top 15 largest and the top 15 fastest-growing sources of FDI in the United States by position. In addition, Argentina, the fastest-growing market for FDI in the United States in 2018, had a compound annual growth rate from 2013 to 2018 of 57.9 percent! [Note: The metric for the fastest-growing sources of FDI ranks only markets with 2018 FDI stock in the United States valued at least $1 billion.]

world map for BES-FDI Data Blog 102219

Source: SelectUSA calculations based on FDI data from the Bureau of Economic Analysis. www.bea.gov Accessed October 2019.

While the United Nations Conference on Trade and Development (UNCTAD) found that global FDI flows continued to decline from 2017 to 2018, the United States retained its dominant position as the top destination worldwide for FDI in 2018. Annual flows can fluctuate from year to year; however, FDI flows (which are measured by foreign parent instead of UBO) into the United States still totaled more than $250 billion in 2018.

When examining the FDI position in the United States by industry of the U.S. affiliate, the share of the position of each industry remained largely similar from 2017 to 2018. The manufacturing sector continued to make up the largest share, at almost 41 percent of the total FDI position in the United States in 2018. However, retail trade had the largest year-over-year growth in its position among industries from 2017 to 2018 (67.2 percent), followed by the real estate and rental and leasing sector (42.4 percent).

In 2018, manufacturing also made up the largest industry sector of FDI coming to the United States from almost all regions of the world: Europe, Asia and Pacific, Canada, Latin America, and the Middle East. The only region where manufacturing was not the largest sector of FDI was Africa, for which data on manufacturing FDI was suppressed.

BEA FDI blog-Position of FDI graphic 102219

Source: Bureau of Economic Analysis. www.bea.gov Accessed October 2019.

Stay Current on FDI
If you’d like more information about this latest release, SelectUSA recently hosted a webinar with BEA experts to discuss the data. You can find a recording of that webinar here.

Keep your eyes open for BEA’s next data release on FDI topics in November: the Activities of U.S. Affiliates of Foreign Multinational Enterprises (MNEs) series, which indicates the number of U.S. jobs, the level of spending on research and development (R&D), and the value of U.S. exports supported by FDI in the United States.

For more information on FDI in the United States, sign up for email updates from SelectUSA and visit SelectUSA.gov for resources such as FDI fact sheets, interactive data tools, and informative reports. You can also follow and contribute to our #FDIintheUSA campaign on Twitter!

 About SelectUSA
Housed within the U.S. Department of Commerce’s International Trade Administration, SelectUSA promotes and facilitates business investment in the United States.

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

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The Intersection of Manufacturing & FDI: Job Creation

October 4, 2019

SelectUSA’s Investment Research Team works to create an environment where data inspires, supports, and informs investment policy and promotion.

This Manufacturing Day we are highlighting the positive impact of investors in manufacturing. Whether a business decides to expand existing operations in the United States, or a new international investor opens a manufacturing plant for the first time, U.S. communities reap rewards. These benefits can be seen in stories across the country.

Re-selecting the USA
Earlier this year, SelectUSA released a report titled Reinvesting in the USA: A Case Study of Reshoring and Expanding in the United States. It profiled six examples of U.S.-based businesses that chose to reshore or expand operations in the United States rather than abroad. Each of these companies had a positive impact on the U.S. workers they employed and the communities surrounding them – the kind of real-world details about manufacturing that can often get lost in macroeconomic analysis.

Companies such as Sherrill Manufacturing support U.S. jobs with their dedication to manufacturing in the United States. Between 2013 and 2014, Sherrill reshored its entire operation from Mexico to a facility in upstate New York. Sherrill’s “factory-to-table” model not only allows consumers to purchase directly from the manufacturer, but also enabled the company to more than double manufacturing employment at its New York facility. Today, Sherrill Manufacturing employs more than 50 workers.

Sherrill’s investment also supports a historic manufacturing community in upstate New York, ranging from suppliers who provide the company with U.S.-made steel to small businesses that serve manufacturing workers, such as the local pizza parlor. By choosing to reinvest in the United States, Sherrill Manufacturing has helped strengthen the local manufacturing industry, enhancing employment and the economic gains that accompany it.

The Bigger Picture: FDI in U.S. Manufacturing
It is also useful to look at the macroeconomic data on manufacturing investment in the United States. Our colleagues at the Bureau of Economic Analysis provide robust data on foreign direct investment (FDI) in the United States each year. In 2018, investment in the manufacturing sector represented 41 percent of the total FDI position in the United States, up from 32 percent in 2008. With a compound annual growth rate (CAGR) of 13 percent during the last five years, FDI in U.S. manufacturing is outpacing the all-industry comparable CAGR of 10 percent economy-wide growth. This increased representation of manufacturing in the U.S. FDI portfolio speaks to U.S. manufacturing competitiveness in the global economy.

FDI has an undeniable impact on the U.S. economy and U.S. workers. According to the latest available data, FDI directly supported nearly 2.5 million manufacturing jobs in 2016. This means that investment by foreign-owned firms in the United States was responsible for 20 percent of all U.S. manufacturing employment that year.

Of all source markets in 2016, Japan supported the largest number of jobs in the manufacturing industry (approximately 397,000), followed by Germany (287,800), the United Kingdom (275,600), and France (213,300). Of the FDI in manufacturing subsectors, transportation equipment supported the most jobs (509,900), followed by chemical manufacturing (364,400), and food manufacturing (301,000).

Where is manufacturing FDI going in the United States?
FDI in the manufacturing industry supports jobs in all U.S. states, territories, and the District of Columbia. Not surprisingly, the states with the highest levels of employment supported by manufacturing FDI are some of the most populous in the nation: California (where approximately 200,000 FDI manufacturing jobs are supported – the highest total of any state) and Texas (181,500).

In addition, manufacturing FDI is responsible for a significant component of overall employment resulting from FDI. In 10 states, the majority of FDI-supported jobs are in the manufacturing sector, with the highest percentage in South Dakota (66 percent of jobs supported by FDI resulting from the manufacturing sector), Michigan (64 percent), and Nebraska (63 percent).

Percentage of FDI Employment in Manufacturing 2016

Graphic for SUSA Mfg Blog 100219
Data Source: Bureau of Economic Analysis. Accessed 9/2019.

On a regional basis, the total employment resulting from FDI in manufacturing was highest in the Southeast (698,500) and the Great Lakes (590,900). However, the average employment level of a Great Lakes state resulting from manufacturing FDI was more than twice as high as that in a Southeast state (118,180 on average in a Great Lakes state compared to 58,208 in a Southeast state). As a result, more than 51 percent of all FDI-supported employment in the Great Lakes was in the manufacturing sector.

SelectUSA Loves Manufacturing in the United States
Whether you’re looking at a favorite local restaurant’s day-to-day business or state-level economies, domestic manufacturing’s contributions cannot be understated. Both the FDI of international companies in the United States and the reinvestment efforts of domestic firms provide this key support. On this Manufacturing Day, we’d like to applaud them and the hardworking U.S. workers they employ!

For more information
For more information on FDI in the United States, sign up for email updates from SelectUSA and visit SelectUSA.gov for resources such as FDI fact sheets, interactive data tools, and informative reports. You can also follow and contribute to our #FDIintheUSA campaign on Twitter!

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Privacy Shield and GDPR

October 1, 2019

by Alex Greenstein, Privacy Shield Director

In April 2016, the European Union (EU) replaced its 1995 Data Protection Directive with the General Data Protection Regulation (GDPR). As companies in the EU and beyond review their data protection policies to ensure compliance with this law, many are asking how GDPR impacts the three-year-old EU-U.S. Privacy Shield Framework.

Background on GDPR
Effective May 2018, GDPR governs the commercial use of the personal data, requiring companies to follow certain data protection practices.American And European Union Flag Pair On A Desk Over Defocused Background

The regulation applies to all EU-based companies, as well as companies outside the EU that receive EU personal data in offering goods and services or in monitoring EU individuals’ behavior. GDPR also governs the transfer of EU personal data to companies outside the EU.

GDPR has garnered a great deal of attention globally and has incentivized many companies to review and update their privacy and cross border data flow policies. The International Trade Administration at the U.S. Department of Commerce engages regularly with the U.S. business community to promote wider awareness of the GDPR’s new requirements. ITA’s Office of Digital Services Industries (ODSI) has also partnered with the U.S. Commercial Service team at the U.S. Mission to the European Union in outreach efforts.

For additional information about GDPR, click here.

 Relationship with Privacy Shield
Privacy Shield is not a GDPR compliance mechanism, but rather a means that enables participating companies to meet the EU requirements for transferring personal data to third countries, as discussed in Chapter V of the GDPR.

GDPR’s Article 45 explicitly provides for the continuity of prior European Commission (EC) adequacy determinations, like the adequacy decision regarding Privacy Shield adopted by the Commission in July 2016, under the 1995 Data Protection Directive. Accordingly, the EC’s adequacy determination for Privacy Shield remains valid under the GDPR.

Negotiators from both the U. S. Government and the European Commission accounted for the GDPR’s new substantive and procedural requirements as they developed the Privacy Shield Framework in 2016. Privacy Shield’s joint annual review, for example, was designed to satisfy the GDPR requirement for review of European Commission adequacy determinations once every four years. Privacy Shield’s annual review exceeds this requirement.

In addition, the Privacy Shield Framework created the Ombudsperson mechanism, which provides an unprecedented new channel for EU and Swiss individuals to seek an independent review regarding national security access to personal data transferred to the United States. This mechanism applies not only to data transferred pursuant to the Privacy Shield Framework, but also to other EU-approved data transfer mechanisms, such as Standard Contractual Clauses and Binding Corporate Rules, further enabling transatlantic commerce while protecting privacy.

To learn more about the Privacy Shield Frameworks, visit www.privacyshield.gov and check out our two-pager here.

The Privacy Shield Team is part of the Office of Digital Services Industries (ODSI) in the International Trade Administration (ITA) at the U.S. Department of Commerce. ODSI promotes privacy policy frameworks that facilitate the free flow of data across borders, leads policy discussions on privacy with international partners, and addresses trade and commercial issues on evolving information and communications technology (ICT) services. It operates within ITA’s Industry & Analysis business unit, which helps to create the conditions for U.S. industry to innovate and compete globally.

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

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