attracting investment and re-investment: maximizing partnerships & opportunities #pedaspring15...
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ATTRACTING INVESTMENT AND RE-INVESTMENT:
MAXIMIZING PARTNERSHIPS & OPPORTUNITIES
#PEDAspring15
@myPEDA@investPA
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With the largest network of overseas offices of any state in the U.S., Pennsylvania’s Office of International Business Development (OIBD) is committed to supporting Pennsylvania companies by working with them to increase their export sales and encouraging foreign companies to invest in Pennsylvania.
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
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OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
PA Authorized International Representatives
25 offices covering 55 countries around the world
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• Prospective investors identified/tracked
• Business retention meetings
• Performance-based compensation based on:• Site visits to Pennsylvania
• Completed projects
• Marketing of Pennsylvania:• Investment seminars and events
• Direct Mail Campaigns
• Special activities and visits from Pennsylvania delegations/businesses
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
Objectives of PA Authorized Investment Representatives
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• Stable EconomyLarge, growing and diverse economy
• Comprehensive InfrastructureTransportation, water resource, energy
• Strategic LocationCentral to U.S and Canadian businesses and consumers
• Modern WorkforceWell-educated, highly skilled
• Diversified IndustriesHighly diversified with a strong manufacturing base
• World-class EducationHundreds of world-class institutions of higher education
• Game-changing ResourcesSupply and demand, Marcellus Shale, manufacturing
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
Pennsylvania’s Assets
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OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
FDI Trends for PA – Reasons
Source: FDI Markets database, Dec. 2014
• Proximity to markets or customers
• Skilled workforce availability
• Domestic Market Growth Potential
• Government support
• Infrastructure and logistics
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OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
We are the 22nd Largest Economy in the WorldPennsylvania’s Gross State Product - USD $603.87 billion
France Pennsylvania Poland Denmark Israel
Source: World Development Indicators Database, World Bank, Sept 2014Source: U.S. Bureau of Economic Analysis, 2010 GDP by State, 2014
USD $603.8billion USD $517.5
billion
USD $330.6billion USD $291.3
billion
USD $2,734.9 billion
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• Aiding companies in setting up US entities• Providing information on Pennsylvania’s labor, average
wages, business tax structure and more• Coordinating site and building searches with regional
partners• Work with the Governor’s Action Team to vet projects for
business assistance programs• Networking with potential partners, including:
• Suppliers
• Colleges and universities
• Law firms
• Accounting firms
• Banks
• Real estate professionals
• Construction and engineering firms
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
Investment Services Include:
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• 6,450 foreign-owned business locations in PA*• 275235 PA jobs supported by foreign firms*
• Of those, 1,457 are manufacturing companies*• 140,402 PA manufacturing jobs*
• 4th largest state in the U.S. in number of workers
employed by majority-owned foreign-owned affiliates
• Pennsylvania is ranked • 5th for in-sourced manufacturing jobs
• 4th for in-sourced research and design jobs
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
FDI Impact
23% Manu-facturing
companies
77% other in-sourced com-
panies
*Source: Dun & Bradstreet, Dec 2014, at least 50% foreign owned
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• The U.S. continues to be the world’s top destination country measured by number of jobs created by FDI, with a growth of 6%
• Japan and Germany maintain their positions as the second and third largest origin countries for FDI globally, with UK and France at 4th and 5th respectively.
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
World FDI Trends
Source: IBM, “Global Location Trends, 2014 Annual Report”
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• Pennsylvania had a 6% increase in FDI over the previous year
• PA ranks 14th in the US for FDI projects
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
PA FDI Trends
Source: FDI Markets database, data 2003-2014, Dec, 2014
FDI to PA (2003-2014)
No. of Projects 339
Total Job creation 29,335
Average project size (jobs) 86
Total Capital Investment (Capex)
$12.17 b
Average project size (capex)
$35.90 m
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OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
FDI Trends for PA – Source Markets
Source: FDI Markets database, Dec. 2014
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• Transportation equipment remains the largest sector for FDI measured by the number of jobs, accounting for 18% of jobs created from foreign investment in 2013.
• Tourism has emerged as a key source for foreign investment in recent years and is maintaining its position as the second largest sector for foreign investment, while chemicals is third.
• The life sciences sector no longer features among the top 10 sectors for foreign investment, after a decline of 25% in jobs created globally.
• Natural resource dependent sectors, such as minerals, metals, agriculture and forestry all experienced significant declines, with falls of 30% , 20% and 35%, respectively.
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
FDI Trends - Industry
Source: IBM, “Global Location Trends, 2014 Annual Report”
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• China has in recent years experienced a significant decline in
inward production investment of 44 percent compared to 2010 levels,
as increasing costs and questions about quality deterred companies from
locating new or expanding facilities in the country.
• For production activities that are less labor intensive but are
relatively more sensitive to transportation costs, such as many of
the production activities in the transport equipment supply chains, the
changing operating conditions in China, coupled with improvements in
conditions closer to home markets, are resulting in some companies
locating new production facilities near or within their key markets.
Key beneficiaries of this development have been Mexico and
various U.S. states for the North American market.
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
Re-Shoring
Source: IBM, “Global Location Trends, 2014 Annual Report”
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• Assess their location’s capabilities and competencies in areas
of growth, resulting in a wish to be closer to market or leverage the
latest technological improvements.
• emerging services
• competence centers
• new types of manufacturing facilities,
• Ensure that their locations align skills supply and demand in key
target sectors.
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
Implications for Economic Development – Organizations should…
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• Ensure that people obtain skills that are relevant for industries
targeted for growth.
• Review the performance of their organization (along with local
government, stakeholders, etc) to ensure that activities are aligned
with the wider economic development strategy.
• Widen the mandate beyond traditional investment promotion
activities to include cluster development, focusing on key target
sectors and clusters and involve a number of activities to foster
innovation, skills development, partnerships and entrepreneurship
among indigenous and foreign companies.
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
Implications for Economic Development – Organizations should…
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Export Promotion Programs
Despite exports being the bright spot of U.S. economic
recovery, only 1% of small businesses are exporting,
describing their greatest barrier as lack of information or
understanding. State international trade agencies are on
the front lines steering companies through the export
promotion process, from identifying opportunity in foreign
markets to assisting companies with export control
compliance. Exporting companies create good jobs
and boost state economies.
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
Top 3 Issues for Economic Development – International Affairs
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Source: Council of State Governments, Jan 2015
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Attracting Foreign Direct Investment
The contributions to the U.S. economy by subsidiaries
of foreign companies were nearly double that of U.S.
companies in 2013. FDI is a proven catalyst for
economic growth and states are leading the charge
attracting international partners across the globe.
Global trends show the U.S. share of FDI stock is facing
tough competition from other regions, particularly the
European Union and developing nations.
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
Top 3 Issues for Economic Development – International Affairs
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Source: Council of State Governments, Jan 2015
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International Trade Agreements
The U.S. is negotiating major agreements with the
Trans-Pacific and European Union regions. On
completion, these agreements will provide enhanced
access to 39 new markets. States will be readying
themselves for this opportunity by providing resources
to exporters and preparing for challenges that may
arise as a result of the trade deals.
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
Top 3 Issues for Economic Development – International Affairs
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Source: Council of State Governments, Jan 2015
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David BrielExecutive Director, International InvestmentOffice of International Business Development
PA Department of Community and Economic DevelopmentCommonwealth Keystone Building
400 North Street, 4th FloorHarrisburg, PA 17120
www.newpa.com/intl @investPA
OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT
The Importance of Foreign Direct Investment:Opportunities for Pennsylvania The Pennsylvania Economic Development Association
April 21, 2015
Rebecca MoudryActing Director, Investment Promotion & FacilitationSelectUSA, U.S. Department of Commerce
© International Trade Administration 2015 SelectUSA.gov
@selectUSA
Business Investment in the United States
1. FDI Trends and the U.S. Economy and in Pennsylvania
2. SelectUSA: How the Federal Government Facilitates Business Investment in the United States
3. Your Global Strategy
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1. FDI Trends and the U.S. and State EconomySelectUSA
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Sources: Bureau of Economic Analysis; UN Conference on Trade & Development
FDI Benefits the U.S. Economy
#1
22% of U.S. Exports
~6 million U.S. jobs
Average annual wage$78,927
R&D Investments
The United States is the largest recipient of foreign direct investment in the world.
In 2012, U.S. subsidiaries of foreign-owned firms accounted for over 22 percent of all U.S. goods exports.
In 2012, subsidiaries employed 5.8 million U.S. workers.
In 2011, subsidiaries contributed $455 billion in wages to U.S. employees
In 2012, subsidiaries invested $47.0 billion in research and development in the United States
© International Trade Administration 2014 24
Currency displayed at market values. Source: UN Conference on Trade and Development, 2013
Global FDI Trends
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Rest of WorldU.S. Stock
In U
SD M
illio
ns
$25.5 Trillion
U.S. Share of Global FDI Stock, 1980 - 2013The U.S. share of global FDI is declining.
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%
5%
10%
15%
20%
25%
30%
35%
40%
45% 44.86%
25.93%
12.92%
U.S. Share of Global FDI Inflows, 1980 – 2013
25© International Trade Administration 2014
U.S. FDI TrendsTop 15 FDI Stock Positions, 2013
© International Trade Administration 2014
Source: Department of Commerce, Bureau of Economic Analysis – FDI Position by Ultimate Beneficiary Owner, 2013
10% | $280.5b
1% | $32.9b
20% | $540.5b
10% | $278.3b
9% | $239.0b
2% | $ 48.6b
1% | $ 41.0.b
5% | $137.3b
5% | $140.1b
4% | $117.1b
2% | $52.1b
1% | $38.4b
1% | $34.3b
12% | $344.1b
2% | $51.7b
Largest Sources of FDI in the United States by 2013 Stock Position
Rank Market% of total stock
(2.76 trillion) Million USD1 United Kingdom 19.55% 540,4892 Japan 12.45% 344,1433 Canada 10.15% 280,5364 Germany 10.07% 278,2835 France 8.65% 238,9776 Switzerland 5.07% 140,1427 Netherlands 4.97% 137,3338 Ireland 4.24% 117,0909 Spain 1.88% 52,085
10 Australia 1.87% 51,70911 Sweden 1.76% 48,58212 Norway 1.48% 40,98613 Italy 1.39% 38,44514 Belgium 1.24% 34,26015 Mexico 1.19% 32,878
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U.S. FDI TrendsTop 15 FDI Growth Markets, 2013
Note: Figures denote 5 year compound annual growth rate (2009-2013) of the stock FDI position and the total stock of FDI in the United StatesSource: Department of Commerce, Bureau of Economic Analysis – FDI by Ultimate Beneficiary Owner
© International Trade Administration 2014
36.6% | $202.0m
29.1% | $41.0b
14.6% | $48.6b
41.5% | $8.0b
29.3% | $11.0b
24.1% | $1.5b
21.7% | $31.5b
19.6% | $14.9b
15.6% | $5.2b
14.6% | $2.0b
14.3% | $3.6b
34.6% | $23.8b
20.8% | $140.1b
18.9% | $2.0m
Fastest Growing Sources of FDI in the United States by Compound Annual Growth Rate (CAGR) 2009-2013
Rank Market 2013 Stock million USD CAGR
1 China 8,023 41.54%2 Hungary 202 36.61%3 Luxembourg 23,823 34.56%4 India 11,040 29.34%5 Norway 40,986 29.11%6 Malaysia 1,540 24.11%7 Korea, Republic of 31,520 21.72%8 Switzerland 140,142 20.83%9 Brazil 14,852 19.55%
10 Malta 2 18.92%11 Venezuela 5,190 15.62%12 United Arab Emirates 21,204 15.25%13 Sweden 48,582 14.64%14 Colombia 2,022 14.63%15 South Africa 3,647 14.31%
15.3% | $21.2b
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FDI in Pennsylvania
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FDI in PennsylvaniaIn 2012, U.S. subsidiaries of foreign owned firms employed 275,300 workers in Pennsylvania, with 111,000 workers in the manufacturing sector. The majority of FDI is from Western Europe and Canada.
Source: U.S. Bureau of Economic Analysis
United Kingdom…..20%
Germany…..14%
Netherlands…..13%
Japan…..8%
France…..8%
Canada…..7%
FDI Employment in Pennsylvania by Market, 2012
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Manufacturing
Wholesale trade
Retail tradeInformation
Finance and insurance
Real estate
Professional services
Other indus-tries
FDI into Pennsylvania by Major Industry
FDI in Pennsylvania
Source: www.FDIMarkets.com
Canada 4
Since 2003, fDimarkets.com reports 347 global companies have announced investment projects in Pennsylvania. If completed at announced levels, they represent more than $12.45 billion in capital investment and creation of 29,400 jobs.
Why do foreign firms choose Pennsylvania?
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Proxim
ity to
marke
ts or c
ustomers
Skille
d workf
orce ava
ilabilit
y
Domestic M
arket G
rowth Potential
IPA or Govt
support
Infrastr
ucture
and logisti
cs
Industry C
luster /
Critica
l Mass
Lower C
osts
Finance
Ince
ntives o
r Taxe
s or F
unding
Attracti
veness
/ Quality
of Life
Prese
nce of S
uppliers
or JV Partn
ers
Other Motive
0
5
10
15
20
25
Location Motives, Announced Projects 2003-Present
2. How the Federal Government Facilitates Business Investment in the United States
SelectUSA
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About SelectUSA
SelectUSA’s mission is to promote and facilitate business investment in the United States. It is housed in the U.S. Department of Commerce and represented by the Commercial Service at U.S. Embassies and Consulates around the World.
SelectUSA is geographically neutral and represents the entire United States. It upholds the U.S. open investment policy and performs uniquely federal functions.
Our Clients: U.S. States, Regions, and Localities Companies (investors)
SelectUSA Report: Winning Business in the United Stateshttp://selectusa.commerce.gov/fdi-reports
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SelectUSA Can Help
Key SelectUSA Services Offered to Companies and EDOs:
Information and Counseling: To offer strategic insights and subject-matter expertise to companies and EDOs on business investment in the United States.
Ombudsman Assistance: for companies and EDOs with questions or concerns about U.S. federal rules and regulations.
Advocacy: For EDOs facing international competition on investment projects by engaging support from high-profile U.S. Government officials.
In-Market Investment Promotion Platform: Fee-based platforms EDOs use to market their locations to targeted investor audiences. We offer facilitated investment missions (FIMs) and organize Single Location Promotion (SLP) programs.
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SelectUSA can assist communities:
Identify and utilize resources Connect with colleagues in-market Develop in-market promotion events Implement a global strategy
www.fdibestpractice.org/ EDA Best Practices Case Studies interactive tool
www.clustermapping.us Cluster Mapping tool and registry
SelectUSA Services:
Information & Counseling
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• A new aviation maintenance, repair and overhaul facility, which will service short-haul and medium-haul aircraft.
• Expected to create up to 400 permanent jobs.
• With the support of Vice President Biden, the White House National Economic Council, and the President’s Task Force on Puerto Rico, the SelectUSA team worked with the Puerto Rico team to offer Lufthansa information and assistance from across federal agencies and departments that not only assisted in making their decision but demonstrated why the United States is the top destination for foreign direct investment.
Washington, DC – April 10: Penny Pritzker, Alejandro Garcia Padilla, August Wilhelm Henningsen, and Peter Ammon attend a signing ceremony for an agreement to create a new Lufthansa Aviation Facility in Puerto Rico at the German Ambassador Residence on April 10, 2014 in Washington, DC.
SelectUSA Case Study:
Lufthansa
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Single Location Promotion• Tailor-made events developed collaboratively, promoting individual U.S.
jurisdictions as FDI destinations• Promotion events or receptions, one-on-one meetings with investors and other
key partners
SelectUSA Connections for U.S. States and Regions:
In Market Promotion
Facilitated Investment MissionsUSFCS-led program that provides participating EDOs a suite of fee-base services• Sector-based trade shows, participants receive competitive registration fees including
attendance at special events, booth space, translation services, schedule of meetings and logistical assistance
• SelectUSA-organized events and Road Shows to multiple stops in one country or a group of markets
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Visit http://selectusa.commerce.gov/upcoming-events for details:
2015
March 23-24: Washington, DC – SelectUSA Investment Summit April 13-17: Hannover – Hannover Messe May 4-7: SelectUSA at Offshore Technology Conference May 12-14: Mexico Road Show May 18-29: Greater China Road Show May 19: Spain Forum June 15-18: SelectUSA at BIO 2015 June 18-20: SelectUSA at the International Franchise Expo October 26-28: Aerospace FDI Exposition TBA: Japan, Brazil, India, Nordics Road Shows
SelectUSA Services:
In-Market Promotion Programs*
*Outreach Programs offer information and services to both firms and EDOs
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The 2015 SelectUSA Investment Summit
March 23-24, 2015
2,600+ attendees1,300 Foreign Firm Participants led by 45 U.S. Ambassadors
Thank You, Pennsylvania! Pennsylvania Dept. of Community and Economic Development (exhibitor)Core PA Global (exhibitor)Cambria County Economic Development AuthorityCity of Philadelphia,Commerce DepartmentPittsburgh Regional AllianceYork County Economic AllianceInnovation Collaborative
SelectUSA.gov 39
3. YOUR GLOBAL STRATEGYSelectUSA
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The Need for StrategyWhat are your assets? What makes sense for your unique region?
Outline the strengths and weaknesses in your investment climate Conduct a “Globalization Audit” Identify possible source markets and priority sectors for investment
• What comparative advantage exists for your region? • Be realistic - Focus on a finite number of target sectors
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The Need for Strategy
Moving into Action: When you Go
Know the decision making process for an investor• What will they look for? What are their sticking points?
Familiarize yourself with the markets you visit, and the industries and firms you want to attract – be an expert
Be the chief salesperson for your region, always from the perspective of the investor
Implement Business Retention and Expansion Tools
Prioritize Investor Care • Quick response time to inquiries (some from SelectUSA)• Create a standardized framework for managing cases • Establish metrics to track clients, successes, and areas for improvement• Open communication with decision makers at the state and local levels• Be prepared and willing to handhold an investor throughout the process
Always follow-up with Aftercare
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Tactical introduction to your state, region, city What is your brand? Don’t go it alone! Partnerships are key
The Where and Why of Your Location
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What about Reshoring?
Canada 4
It is a reality, largely due to: Calculations of total operation costs Rising costs internationally A move to regional production and
distribution U.S. competitiveness in energy and input
costs A strong export platform
Do you need a reshoring strategy? www.acetool.commerce.gov Covers the top reasons for investing and sourcing in the U.S.
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Resources• Country Fact Sheets• Customized investment data, talking points
and investment overviews• Competitiveness of the U.S. economy• Announced investments and investment
successes• POC with international specialists
Let Us Know How can we Help
• What are your target markets?
• Where are you planning activities?
• Are firms confronting challenges?
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Thank You
SelectUSA.gov© International Trade Administration 2015
Join us on LinkedIn Follow @SelectUSA on Twitter |
Rebecca MoudryActing Director, Investment Promotion & Facilitation SelectUSA - U.S. Department of [email protected]
Catherine WernerInvestment Specialist – Regional Portfolio ManagerSelectUSA - U.S. Department of Commerce+1-202-482-6307 [email protected]
Why Did I Locate Two Companies in PA afterI located One in Alabama?
Seung-woo Song (Freelancer)[email protected]
LOCATION
• 5 major airports in 3 hours• 2 hours to NY & 3 hours to D.C.• NY – Buyers & money (Information)• D.C. – Regulation (FDA / NIH) and information
EMPLOYMENT
• Easier for healthcare related employment• There are many good universities, colleges and
institutes • Lower salary burden than NY and D.C.• Very good school districts (Good education for
children)
COST
• Buildings & rents are more reasonable than NY and D.C.
• Housing price is lower • General living costs are economic
SUPPORT FROM PA STATE
• Dedicated and detailed supports from Pennsylvania state on foreign start-ups
• Helped family settlement well(This is one of the most important facts but many overlooked.)
• David Briel helped us macro and micro. Many overlooked to help family matters but family matters more than job sometimes so when family is happy then I can locate the company even better. David found almost all my family needs to locate the life here so I located two companies very easy.
SUCCESS STORIES
• Osstem Implant * Sales was USD 30 Mil last year (90 Jobs)
• Meta Biomed * Sales was USD 8 Mil last year (8 jobs) * More than 50% growth every year in South America * In preparation of manufacturing facility
Korea South
• Has 5,000 years old history• Capital City : Seoul• Population : 50 Million• Economy : 13th largest in the World• Located among China, Japan and Russia• First Female President• Famous Singer : Psy Kangnam Style• Korean Companies: Samsung, Hyundai, LG, Kia
