from ny to istanbul
TRANSCRIPT
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From New York to Istanbul
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So many foreign companies in New York
Why are they here?
What do they do here?
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Why do companies invest overseas?
What we know Relevance for New York
Costs A good reason to leave NY
Growth ??
Taxes Dreadful
Resources In NY??
Something special about investment in cities? Global cities?
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What do they do when they come here?
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Surveys of Foreign Affiliates in New York, 1995, 2005
The research team:Mark ChadwinAndreas Grein
Clifford WymbsLilach Nachum
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Why does it matter for a Global Financial Center?
Majority – in financial services
Business services - support
Cluster effect, synergies
Shared infrastructure
Global linkages – global cities.
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The SurveysPopulation: All foreign affiliates in New York City The Weissman Center Directory of
International Business
1995: Mailed questionnaire + interviews67 responses
2005: Mailed questionnaire142 responses (~10% response rate).
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Why do they come here? % sample
Initially Current
Establish presence in a global center 20% 20%
Serve US clients 19 22Exploit their firm specific advantages 20 12Serve home clients overseas 11 11
Implement a specific activity for the entire corporation
9 11
Access NYC local resources 8 8Tap into industry knowledge pool in NYC 8 8
Counteract or preempt competitors’ moves 4 6
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Firms of different size come to NY for different reasons
• Establish a presence
• Leverage own knowledge
• Exploit current suppliers
• Use known processes
• Focus on U.S. customers
• Gain local industry knowledge
• Leverage local suppliers
• Be nimble and opportunistic
Seek disruptive advantage to compete against larger firms
as soon as possible
Small Firms (sales < $100 mm) Large Firms (sales > $100 mm)
Leverage cash advantage and size to create long-term
momentum
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Size Breakdown% totals
Number of employees Our sample Total in NYC
Up to 10 37% 54%
11-30 31 21
31-50 13 5
51-100 5 11
Over 100 14 11
Average 144 94
Median 14 10
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What do they do here?NY Sales % total sales
0.4
0.17
0.36
0.07% of sample
10%25%50%75-100%
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What do they do here?NY purchases % total purchases
0.5
0.15
0.15
0.2
% of sample
10%25%50%75-100%
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Industrial Breakdown% sample
Financial Services 34%
Retail 15
Tourism, Eating places 13
Manufacturing 13
Business services 12
Pharmaceuticals/Chemicals 8
Other Services 5
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NY competitors % total competitors
0.35
0.3
0.22
0.13
% of sample
10%25%50%75-100%
Competitors located away from NY
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Expatriates Employment % sample
None 1--5 6--10 11--15 16+
25%
34%
6%7%
28%
Expatriates as % of total labor force
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Frequency meetings with people from other companies
% sample
Monthly22%
Weekly51% Several times
per year22%
Other5%
Monthly23%
Weekly45%
Several timesper year
20%
Other 11%
In the same Industry
In other Industries
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Purpose of meetings:% meetings are “very important” and
“important” source of:
Client specific knowledge 76%
Industry specific knowledge 74
Business environment knowledge 69
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Resource transfer: NY affiliates/HQs
Most transfers - various kinds of knowledge: Professional Marketing Global market
Knowledge transfer - two ways: parents - affiliates affiliates - parents
NY affiliates recipients of capital.
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Profits Transferred to HQs% sample
None 1--25 26--50 51--75 76+
46%
19%
7%
2%
25%
Profits transferred to HQ as % of total profits
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Country Breakdown% totals
2005 1995
Our sample
Total in NYC
Western Europe 44% 56% 42%
Asia (Japan) 31 (77) 20 41
Latin America 9 6 3
Southeast Asia 7 3 5
Eastern Europe 5 6 -
Africa 3 6 -
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Mode of Establishment
Greenfield: 91.5% Of which 87% wholly-owned (100%)
Acquisitions: 8.5%Of US-owned firm: 7.0%Of foreign-owned firm: 1.5%.
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From NY to the World
NYCWashington, DC
Miami
TorontoChicago
Los Angeles
London
ParisTokyo
Hong Kong
Singapore
Sydney
Top Networking Interests (% rated Important)
San Francisco
76%
74%
69%
63%
59%
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Where in the World:Top city visits
1. Chicago2. Los Angeles3. Toronto4. London5. Tokyo6. Paris7. Hong-Kong8. Singapore9. Sidney10. San Francisco,
Washington DC, Miami
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Choose NY Again?
2005Yes – 90%No - 10%
1995Yes - 82%No - 18%
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Leave NY – if yes?
2005Where to (most frequently mentioned): tri-
state area, Chicago, Washington DC, Los Angeles
1995Where to (most frequently mentioned): tri-
state area, elsewhere in New York State, Colorado, Arizona
Why? 57% tax savings
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Recommendations for NY Mayor: Affiliates’ voice
20051995Reduce taxes 45%
Improve transportation/infrastructure 23
Improve security 11
Improve quality of service/business 7
Reduce cost of doing business 7
Improve quality of life 5
Reduce cost of living 3
Improve quality of life 24%Lower taxes 16Improve transportation 15Improve bureaucracy 15Develop industrial & social policy 12Develop affordable housing 9Do PR on safety 4Improve infrastructure 4
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From NY to IstanbulWhy do foreign affiliates come to global centers?Learning, knowledge acquisitionPlatform to the world
What do they do/don’t in global centers?Customers, suppliers, competitors -
elsewhereLocal knowledge acquisition – own, HQs
What do they contribute to global centers?High value jobs, capital, global links.