direct foreign investment: a wsiconsni perspectvie...2011/10/27 · direct foreign investment: a...

1 © Copyright 2006, NorthStar Economics, Inc. All rights reserved.

DIRECT FOREIGN

September 12, 2006

7/30/2015 1 1 © Copyright 2011, NorthStar Economics, Inc. All rights reserved.

DIRECT FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE

Direct Foreign Investment: A Wisconsin Perspective

Wausau, WI September 27, 2011 Dr. David J. Ward CEO and Founder NorthStar Economics, Inc.



I. Global Economic Overview II. Background on DFI US/WI III. The UW Task Force on International Economic

Development IV. The DFI Opportunity Curve V. Questions & Discussions

Presentation Outline

Presenter

Presentation Notes

Gilles…or whoever



The Global Economy

World Population 2011 7.0 B U.S. Population 2011 308 M World Economy (GDP) 2010 $65.0T U.S. GDP 2010 $14.5T EU GDP 2010 $16.2T China GDP 2010 $ 6.0T



U.S. Share of Global GDP

1950 35% 1970 27% 2010 22%

US GDP has steadily risen from 1950-2010.

Higher growth rates in emerging countries have grown the global GDP pie and marketplace.



The Global Middle Class: Where the Markets Are Source: Brookings “Size of the Global Middle Class” 2011

2009 2020 2030

North America 338 18% 333 10% 322 7%

Europe 664 36% 703 22% 680 14%

Central & South America 181 10% 251 8% 313 6%

Asia Pacific 525 28% 1,740 54% 3,228 66%

Sub-Saharan Africa 32 2% 57 2% 107 2%

Middle East & North Africa

105 6% 165 5% 234 5%

World 1,845 100% 3,249 100% 4,884 100%

Table 1: Size of the Middle Class, Regions (millions of people and global share)



Key Markets for World Middle Class

Food – protein – meat, fish, dairy Feed – China now has 700M pigs and has

become a major buyer of US corn Fiber – clothing, packaging, personal care

products Fuel – oil, gas, alternative fuels



US Economic Opportunity in The Global Economy

Exports – Another slide show in itself Direct Foreign Investment – what we are

talking about tonight



The US Economy is Global

US Exports in 2010 $1.28 T US Imports in 2010 $1.91 T DFI in the US in 2008 $ 325 B DFI stock in the US in 2008 $ 2.1 T



The Wisconsin Economy is Global

Exports in 2010 $19.8 B Foreign Firm Operations 2009 470+ Major Foreign Investments by WI Firms Schneider Transport - China Manitowoc Corp. - China



US Direct Foreign Investment

Time Period DFI Inflow DFI Outflow Net Inflow

1960-1969 $42.2B $5.1 B +$37.1B

1980-1989 $206.3B $329.2B -$122.9

2000-2007 $2,950B $2,704B +$246B



US DFI Statistics

Stock of DFI in US $2.1Trillion 2008 DFI in US $325Billion



Types of DFI in US

Reinvestment of earnings of foreign owned business

Acquisition of US assets – land, buildings Invest and Build US Subsidiary Acquire US company or division



Fears and Concerns about DFI in the US Economy

Foreign countries will steal our technology Foreign countries will influence our

government and politics Foreign firms will control the economy Fears are highlighted by the Japanese real

estate investment in US assets in the 1990s and current Chinese ownership of US debt

Foreign-Owned Operations Source: Wisconsin Department of Commerce

Economic Assets

Presenter

Presentation Notes

!!!This is an image cropped in PowerPoint If it was cropped this way it would fill up the page. You are cutting Chicago, etc off then.



470 statewide

27 countries represented

Operations are located

in 51 of 72 (71%)

Wisconsin counties

Total employment is

60,000+ Source: Wisconsin Department of Commerce

Economic Assets

Foreign-Owned Operations

Presenter

Presentation Notes

Format??? 1.67%



0 5000 10000 15000 20000 25000 30000 35000 40000Manufacturing

Finance, Insuran

ce, & Real E

state

Services

Other Manufact

uringWholesale

Trade

Transportat

ion, Communicat

ions, Electri

c, Gas,

& Sanitar

y Serv

icesWholesale

TradeReta

il Trad

e

SIC Codes

Source: Wisconsin Department of Commerce, SIC Codes

Economic Assets Employment in Foreign-Owned

Operations by Industry

Presenter

Presentation Notes

Format decision…

Origin of Foreign-Owned Operations in Wisconsin Source: Wisconsin Department of Commerce

Economic Relationships



Examples of DFI in Wisconsin

Alliance Laundry Systems – 2004-05 $375M IPO turns into $450M DFI as Ontario Teachers Retirement buys the company

Fincantieri acquires marine assets of Manitowoc Corp – 2009 for $120M

Seda International Packaging locates factory and North American HQ in Kenosha – 2011 for $76M



Examples of DFI in Wisconsin

Simonswerk Group sets up office and distribution center in Whitewater - 2011

Decision Insight Information group selects New Berlin as its new HQ site - 2011

Thomas Magnete GmbH to open manufacturing plant in Brookfield – 2011 $3 M investment

Statewide ◦ Economic assets ◦ Human capital & culture ◦ Economic relationships ◦ University of Wisconsin

System assets and relationships ◦ Growth opportunities

International Assets & Opportunities Scan

Presenter

Presentation Notes

What are we going to do about the breaker slides?



Approach ◦ Initial high-level statewide scan and communication

UW System assets and relationships Economic assets

Internationally significant assets and economies statewide Human capital and culture

Economic relationships

◦ Utilize New North as a Pilot Project ◦ Prepare compelling documentation of resources





Purpose ◦ Take initial inventory of the UW System and State

international expertise and assets

Key questions ◦ What international relationships exist and where? ◦ What is the international expertise of the UW System

and State? ◦ What are our globally significant assets? ◦ How do our assets and relationships align with

emerging opportunities and growth regions?

Human Capital & Culture

Ethnic Heritage Source: The Atlas of Ethnic Diversity in Wisconsin, 1998

Presenter

Presentation Notes

Flemish?? !!!This is an image cropped in PowerPoint If it was cropped this way it would fill up the page. You are cutting Chicago, etc off then.




Presenter

Presentation Notes


Wisconsin’s Sister Cities/States & Trade Focus Economic Relationships

Source: Wisconsin Department of Commerce




Presenter

Presentation Notes


UW System International

Assets UW System Alumni Living Abroad Sources: UW Eau Claire, Green Bay, Madison, Milwaukee, Oshkosh, Platteville, and Stout

UW System International Students Sources: UW Madison, Milwaukee, Stevens Point; 2004-2010


Assets


Assets UW System Students’ Study Abroad Destinations Sources: UW Madison, Milwaukee, La Crosse, Platteville, Whitewater; 2006-2008



Relationship Countries

Cultural Canada, Germany, Norway, France, United Kingdom

Economic Canada, China, Germany, Japan, Mexico

Education University of Wisconsin System Students & Alumni

Canada, China & Hong Kong, India, and Taiwan

Education University of Wisconsin System Faculty

To be analyzed

Initial Synthesis Where We Have the Greatest

Existing Relationships & Focus

Presenter

Presentation Notes

Title !!! Look at again



Initial Synthesis Key International Assets

Presenter

Presentation Notes

Title Should there be a breaker slide around here?




Presenter

Presentation Notes


Growth Opportunities Worldwide Top 30 GDP

Source: World Bank, 2010

Growth Opportunities Worldwide Top 30 GDP & Growth Rates (2000-2008)

Source: World Bank 2009 and 2010



UW-Madison • China Initiative • Babcock Institute / World Dairy Expo • Chinese Champions Program

UW-Eau Claire • 1+2+1 China Program

UW-Platteville • Confucius Institute

UW System-wide • Alumni branches

• Beijing, Hong Kong, Singapore, Taiwan • Mandarin language instruction • Study abroad / student exchange • WARF (Wisconsin Alumni Research Foundation) • WiSys Technology Foundation

UW System Private Sector

Agriculture • World Dairy Expo • Ginseng Board of Wisconsin

Environmental Research & Technology • Aquarius Systems • Badger Meter

Medical & Health Services • TomoTherapy • GE Medical

Industry, Infrastructure, & Transportation • Harley Davidson • Oshkosh Trucks • Johnson Controls

Business Associations • Metro Milwaukee Association of Commerce – China Council • Madison International Trade Association • New North (Green Bay / NE Wisconsin)

Growth Opportunities China – UW & State Connections

Presenter

Presentation Notes

Modify??



Some Key Issues and Questions

Can Wisconsin globally compete and win more DFI?

If so where is WI competitive advantage? What about arguments related to foreign

control of our (US & WI) economy? Could the UW System play a role in

building global contacts and attracting DFI?



Remember the Global Demands of the Global Middle Class Food Feed Fiber Fuel

Will anyone be interested in the WI investment opportunity curve?

Will we develop the global case for investing in Wisconsin?



Why a DFI Strategy for Wisconsin

DFI investment creates jobs – Fincantieri WI has a base of DFI to expand and grow –

470+ firms and more choosing the state DFI often leads to exports Wisconsin is positioned to meet global middle

class demand WI is often overlooked (fly over?) in VC and

other domestic investment Much of the DFI creates jobs that match the

skills of the unemployed in Wisconsin



Questions and Discussion


DIRECT FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 42

David J. Ward, Ph.D., President

Phone: (608) 279-3393

Email: [email protected]

Fax: (608) 441-8064

www.northstareconomics.com

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