Global Direct Investment Solutions

Corporate Development for a Networked World

OnTheShortList.com      

fDi magazine links   fDi Atlas

ShortListNews.com  

US and Foreign Direct Investment in the United States (USA)

Bruce Donnelly   bruce@gdi-solutions.com    (Biography)

We provide personal introductory referrals to our contacts and perform other "short list" research or project planning assistance according to the specific investment project interests of the corporate executives and business advisors we serve.

The global cross-border nature of our research and investment project referral work is unique in this market.  A similar Invest in Europe directory is available, plus directories for other regions.

Refer also to our related website : www.OnTheShortList.com

It provides other custom research and tools for business location selection work.

We welcome suggestions , including additions or updates.

See how to request a relevant directory listing .

We also offer marketing assistance to help promote an area or service to relevant contacts.  An estimated 500,000 visitors per year will visit this website in 2006, up 150% from 200,000 in 2004.

Northeast          NY   CT   MA   RI   NH  VT  ME

Mid-Atlantic       PA   NJ   MD   DE   DC   WV   VA   NC

Southeast         SC   GA   FL   AL   MS   TN

Great Lakes      KY   OH   MI   IN    IL   WI   MN

North Central     MO  IA   KS   NE   ND  SD

South Central    TX   OK   AR   LA

Mountain          AZ   NM  CO   UT    WY   ID   MT

West Coast      CA  NV   OR   WA   HI   AK

Economic development directory - alphabetical list by state for convenience

Same links as abbreviations at left (not familiar to foreign visitors)

Alabama   Alaska   Arizona  Arkansas  California  Colorado  Connecticut  Delaware  Florida  Georgia   Hawaii  Idaho  Illinois  Indiana  Iowa  Kansas  Kentucky  Louisiana  Maine  Maryland  Massachusetts  Michigan  Minnesota  Mississippi  Missouri  Montana  Nebraska  Nevada  New Hampshire  New Jersey  New Mexico  New York  North Carolina  North Dakota  Ohio  Oklahoma  Oregon  Pennsylvania  Rhode Island  South Carolina  South Dakota  Tennessee  Texas   Utah  Vermont  Virginia  Washington   West Virginia   Wisconsin   Wyoming

In the past, Commerce Department officials in the International Trade Administration, including Foreign Commercial Service officers and other staff at US embassies, have been tasked primarily with US export promotion and trade policy tasks.  Now they will also focus on the attraction of foreign direct investment projects to the USA.

White House press release and policy statement about Open Economies

See also further background at www.ShortListNews.com

This is a major change in US policy.  Other countries proactively seek to attract and retain foreign direct investment projects.

The US has left that almost entirely up to US states and local areas until now as a very fragmented approach with limited resources.

It will take time for this new policy to have a significant impact, but it seems to be a major change in policy which may attract both bi-partisan support and criticism.

www.investamerica.gov

Advertise in fDi

fDi magazine

2007 North American Location Guide

2007 North American Cities of the Future   List of 2007 winners

2005 US winners and

US Regional finalists

Award presentations

Ask us about sponsored events and advertising in fDi magazine - Foreign Direct Investment - "the ONLY global publication focusing on the business of globalization".  fDi is published by FT Business, of The Financial Times Group.

Ad Recall : Directory of fDi advertisers and fDi magazine intro.

Search back issues of fDi

Contact us for assistance.

Regional Directories and Maps

US Governors directory

The following links are to directories of US state and local economic development organization (EDO) contacts, with links to GUIDE Area Profiles, Surveys, and our new GUIDE "On The Short List" reports.  These are sometimes referred to as economic development agencies (EDA), economic development corporations (EDC), investment promotion agencies (IPA), industrial development corporations (IDC) or various other names.  The directories include state, regional, city, and county or local organizations.  Many of these are closely associated with local chambers of commerce, but generally are operated separately.

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NC "On The Short List"

North Carolina EDO directory

NC Professional Services

District of Columbia 

Washington DC metro area

Illinois "On The Short List"

Illinois EDO directory

Illinois Professional Services

Utah "On The Short List"

Utah EDO directory

Utah Professional Services

Bruce Donnelly, President

Global Direct Investment Solutions

PO Box 439, Fox River Grove IL 60021

FAX 847-304-5375

www.gdi-solutions.com

www.ontheshortlist.com

Phil Eadon

Partners4Technology International

InterTech Global Alliance Ltd.

Delta Promotions & Marketing Ltd.

Washington, England, United Kingdom (UK)

located in Northern England near the cities of Durham, Newcastle-upon-Tyne and Sunderland

phil.eadon@partners4technology.com

EU mobile :

from UK dial as (078) 3473 0929

from US dial as (011)+44-783-473-0929

Office :

from UK dial as (0)191-415-7340

from US dial as (011)+44-191-415-7340

country code is 44, Durham is 191

www.partners4technology.com

www.intertechga.com

We specialize in personal, independent introductions to relevant professional service providers such as business location strategy consultants and our many economic development contacts according to the project interests of the executives we serve.

We can also privately coordinate executive visits to one or more business locations when planning an investment project or seeking local business alliances.

Please contact us to discuss such services or introductory referrals.

Partners4Technology

The International Business Introduction Service

for Technology-Led Business Cluster Development

www.partners4technology.com

Contact us.  We can help, as a free and independent service in this specialty.

Many national governments in Europe and other regions of the world maintain very proactive investment promotion programs to attract foreign direct investment (FDI) projects.

These often work closely with their diplomatic missions, and may be tied to export promotion or other business development initiatives intended to support their industrial development policies, technology transfer interests, and other aspects of economic development.

If you look at the above links or our NAFTA directory of North American economic development organizations, or our directory of government resources in the USA, you will search in vain for an "Invest in the USA", "Invest in America", or similar organization at the national level to attract and support foreign investment projects.

There is no known US counterpart to this common type of service in other countries.

If you are aware of any comparable service, please contact us about it, because we support investment projects from anywhere, to anywhere, and would certainly like to know of any such national capabilities to support foreign investment in the US other than through the many private services we know, such as leading site selection or business location consultants, incentives negotiators, and sources of information for investment projects.

Executives who are seeking advice for their US investment project interests are encouraged to contact us and take advantage of our free research and introductory referral services.  Our independent services are free because we are supported by professionals who want to openly share knowledge of their capabilities to support investment projects because we may reach executives who would be unaware of their relevant services.

As our NAFTA directory demonstrates, we can readily introduce both economic development organizations and many relevant professional service providers.

Countries worldwide compete to attract investment projects.  Refer to our global directories for examples in regions such as Europe.

Investment promotion agencies (IPA's) at the national, regional, metro area and local levels may perform marketing work to promote the attractions of their areas to business executives and their professional advisors.

They also perform research and project support services to assist in the development of investment projects by companies, and may have well-established relationships with local service providers which have strong experience in the support of such projects.

In short, they want to "win" the project against competing business locations as executives go through their site selection decision process.

They also typically focus heavily on local business retention and expansion initiatives, because these are often responsible for more local job and wealth creation than foreign projects, even though foreign projects often bring many spillover benefits (business with related suppliers and customers, establishing the reputation of the area as a global business cluster in a target industry, etc.).

For information about FDI trends in North America and other research, refer to the list of government sources and many other industry or economic research sources which we provide, as well as our directory of publishers and associations relevant to this niche.

The state, regional, and local economic development organizations listed in our regional and state directories for the NAFTA region will also typically provide access to useful information on FDI activity (statistics and specific projects) in their jurisdictions.

We also maintain global contacts among professional service providers related to this niche.

The US Department of Commerce, through the Foreign Commercial Service offices in various embassies and consulates in major business locations worldwide, generally focuses on export promotion as US companies seek assistance to enter those markets.

These field officers of the International Trade Administration (see www.export.gov for many examples of their services, including the useful Country Commercial Guides) generally maintain strong local market knowledge and valuable networks of contacts to assist US executives with their business development efforts or to help resolve policy problems with the host government (restrictive trade practices, etc.).  Their counterparts in many US cities are also actively engaged in the support of export promotion and trade missions.

They do not, however, generally get very involved in the promotion of the United States as a business location for foreign investors, nor actively support research or planning work for FDI projects.  Investment incentives are negotiated at the state and local levels.

The export promotion or trade offices in the US from other countries also do not generally provide services to help companies from their countries to invest in the United States.  They want to promote their own exports, and attract investment to develop their own countries.

In other countries, the counterpart to the US Department of Commerce, such as a Ministry of Industry or some other department, might typically be directly involved not only in the marketing of the country as an attractive business location for foreign investment projects, but would also play an active role in the support of specific projects, including negotiations of financial or other incentives to attract FDI projects of all sizes.

The World Bank, UNCTAD, and other multilateral organizations actively support many "capacity building" projects to create infrastructure and services to support the attraction of foreign direct investment projects as well as local business development.

The US Agency for International Development (US AID) administers foreign aid programs which also may support initiatives to create a more favorable business environment, especially in places of strategic interest (as in the case of central and eastern Europe, Afghanistan, etc.).  In short, the US government, both directly and indirectly through the support of multilateral organizations, helps other countries to create more competitive business environments, but does not directly promote investment into the USA.

There are some changes in progress in 2005, such as to use "Opportunity Zones" as a way to reinforce local economic development programs which are achieving significant progress in challenging circumstances.  This is analogous to the Millennium Challenge Account.

This typically leaves states and regions competing against each other for projects, with no federal role in project negotiations.  Unlike the European Union, which imposes legal and regulatory constraints on the incentives which regions can offer to investors, there is very little federal government involvement in the foreign direct investment process in the USA.

It is not up to us to advocate where they should invest, or why.  Competitive market forces for each company, and the perceptions and strategies of the company leaders about how best to grow their companies within the constraints of their available resources, will define their choices.  Regardless of where the project is coming from, or where it is going, our role is to help make it happen faster and better so that, if the company leaders are correct in their perceptions of their market and potential ROI, they will benefit sooner rather than later, and not miss the opportunities of a changing market.  That will benefit the area where they invest, whereas it would be an illusory achievement for an area to attract a project which fails, which can be a needless waste of resources for both the company and community, and very painful to all of the individuals involved.  Better location choices have a high value.

It may be noted that we use the term "global direct investment" in this business because we believe the notion of FDI is largely outdated.  It reflects old nationalist or mercantilist approaches to industrial development policies which do not reflect this new era of global business mobility and communications. There are unprecedented cross-border opportunities for relatively free trade despite the continued intervention of some governments in specific trade and investment flows.  Governments intervene in markets to advance their perceived interests, which can yield bad results despite any good intentions.  Businesses have limited ability to influence foreign (or their own) government policies and actions, for better or worse.

We think that what really matters for economic development is the global flow of successful capital investment projects from any one local area to any other, or within a region.  Every area needs more successful businesses as the key to economic prosperity.  No matter where the source of capital or business leadership is from, what really matters is that the business succeeds at the chosen location in the context of global competition for that specific business.  Every company and project is unique in that regard.

Local expansion for a specific business function may not be viable in a global competitive context, even though the business owners might personally prefer a particular location.  US public and private corporations do not operate as instruments of national economic or industrial policies or politics (unlike national companies in some countries).  They go where their current leaders perceive the best business opportunities to achieve their current goals, even if one could legitimately argue that such actions (the "invisible hand" of self-interest) may appear or actually be contrary to larger or longer-term national interests.  Perceived short-term business advantages can mask long-term risks, like acting hastily without thinking many moves ahead in a chess match against a patient and clever opponent.

The nationalistic, populist notion that it is tantamount to treason for US businesses to invest somewhere else in the world is rather bizarre in the United States, which has traditionally enjoyed so much foreign investment into this country, while enjoying the many benefits of successful investment and talent worldwide through many US-based multinationals.

This is comparable to the populist national industrial policies which we have criticized elsewhere in the world, such as the failed "protection for infant industries" in many developing countries, where the protected companies predictably failed to grow up.  They typically just used their local market advantage to fight for continued protection against competitors, which has often reinforced political corruption.  It also has tended to hurt the local economy in unexpected ways, because protecting an uncompetitive industry raises costs locally and can have unintended consequences.  For example, protection of "infant" technology companies can doom all other local companies to pay too much for less reliable or obsolete technology, which in turn hurts their own capabilities to be globally competitive.

If a company in Belgium invests in France or The Netherlands, that is "foreign direct investment" from a national perspective, but an internal investment flow from the European Union perspective.  It may still be tracked as FDI inflows and outflows and capital stock in European or other statistics, but it is analogous to intracompany transfers which net out in the accounting for global businesses.

On the other hand, if a company in Chicago invests in an operation in Minnesota or California, that would not be "foreign" investment despite the cross-border nature of such multi-state transactions, or "interstate commerce" from a regulatory perspective.  Both states would be glad to be able to report winning the project, but they would be happy to attract successful investments from the retention and expansion of local companies, just as the same would be true in Europe.

For that matter, if a company in downtown Chicago expands into a neighboring county, is that a "foreign" cross-border investment flow?  It can certainly be argued that it is a loss to the city, and a win for the suburbs, but the real question is where the company is most likely to survive and prosper.  If the owners decide to relocate or expand into a new location, locally or elsewhere, it may be that the competitive environment in which they operate has changed since their original location decision.  Will the reconfiguration of where they do various business functions, whether "in-house" or outsourced, enable them to remain or become more competitive?  They have to compete in the future environment, not the past.

The question of whether the investment flow is "foreign" is largely irrelevant for practical business purposes at the microeconomic level at which businesses really operate, even though it may have arguable importance in national accounts statistics and other macroeconomic policy considerations, or comparisons among business locations about the overall trends in job creation and investment choices by many companies.

That doesn't mean the attraction (or failure to do so) is unimportant, especially at the local level.  The point is that economic value is created by actually developing a successful business in a given location, which by definition these days often means that it must be competitive from a global rather than a local, regional, or national perspective.

Business leaders are facing a very different business environment today, and it will continue to change rapidly, so past choices may not be indicative of future results for their companies.  It may also be unwise to uncritically follow the choices which others make.