4 Key Takeaways from SelectUSA’s 2016 Investment Summit
June 20, 2016
SelectUSA’s Investment Summit kicked off on Sunday with the Summit Academy, a two-track program for economic development organizations (EDOs) and companies investing in the U.S. The goal was education and insight relative to foreign direct investment. Here’s what we found most interesting:
- When dealing with FDI projects, business costs are only part of the equation. Arguably more important is “certainty,” as investing in a foreign land is intimidating, risky and unfamiliar. So instead of dangling a tax incentive, consider that a commitment toward infrastructure improvements may mean more to that company’s confidence level that its business will take root.
- With endless data readily available, the role of the EDO has changed from data provider to “people connector,” requiring economic development leaders to be fully ingrained within their communities for quick action. Rather than fielding data-rich RFIs, EDOs are more often hearing from executives further down the project lifecycle when they’d like to speak with your allies, existing business community and political leaders (sometimes within days). What this requires is that every EDO must already be connected with key local players; if you’re reaching out for the first time when a company is asking for it, you’re probably too late to the party.
- Workforce is a top concern of companies, but it’s hard not to get lost in the gaggle of EDOs claiming their region as having the best. Conversations focused on the need to articulate with specificity how your region stacks up in certain sectors (“3,000 IT graduates per year” actually means very little), but most interesting was the comment from Chris Steele at Investment Consulting Associates: EDOS need to think about, “What is our current ‘box of Legos’ to play with, and what’ the next ‘box of Legos’ we can play with?” Put another way, what is our current specialization to grow with what we have now, and how do those skills transfer to the next growth sector so we can start moving in that direction too?
- DCI’s Andy Levine hosted a session called “Perfecting the Pitch,” featuring Columbus 2020 and the Chattanooga Area Chamber of Commerce competing for a mock FDI project from Japan in the automotive sector. The two organizations provided stellar presentations, but took two very different approaches. Columbus used a data-rich deck focused on its deep history with and concentration of Japanese companies; Chattanooga, not having those same connections with Japanese firms, instead took a more relational tone with examples of other foreign companies that have not only chosen Chattanooga, but expanded their operations multiple times.
Overall, the Summit has been another hit so far. There’s a high concentration of Indian and Chinese companies, and they appear to be more knowledgeable about the U.S. market than last year. Company size trends toward a small and medium enterprise, but with products ready for the U.S. market (many with sales operations already here). Let’s just say the phrase, “it’s like shooting ducks in a barrel,” has been tossed around for the second straight year.