Ensuring Pennsylvania’s Global Competitiveness

Evan Hoffman, Organization for International Investment (OFII)

David Briel, PA DCED Office of International Business Development (OIBD)

Suchit Bachalli, Unilog Content Solutions

#PEDAspring17

April 25, 2017

@InsourceJobsUSA @InvestPA @Unilog1

Educate | Advocate | Connect

Number of Americans who work for an insourcing company.

Wage premium insourcing workers earn over economy-wide average.

Percentage of U.S. exports produced by insourcing companies, valued at $425 billion

Increase in corporate charitable giving from 2000 to 2010 compared to economy contraction of 5 percent

Industry Breakdown

Manufacturing$1.23 T

Finance & Insurance

$388 B

Whole-sale Trade

$367 B

Other Industries$812 B

R&D Spending

Chemical Manufacturing $22.4B

Transportation Manufacturing $6.3B

Other Manufacturing $12.4B

Other $7.4B

Wholesale Trade $8.4B

Worldwide Exports

Europe $228B

Asia & Pacific $117B

Latin America $57B

Canada $13B

Middle East & Africa $4.5B

Exports to Europe

U.K. $73B

Other $47B

France $23B

Germany $45B

Netherlands $19B

Switzerland $21B

Pennsylvania ranks 4th nationally in the number of paychecks supported directly and indirectly by global investment at 971,800

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What matters most between competing states?- Proximity to customers- Having the right workforce- State/local incentives

Understanding current and future industry clusters

Mapping out international assets, worldwide connections, workforce capabilities, and educational networks

Creating effective aftercare for existing investors

Understanding and responding appropriately to mergers and acquisitions

Ensuring nondiscrimination in policy and regulation

• Tax reform – lower rate, non-discrimination, interest deductibility • Section 385 Treasury Regulations• Tax treaties• Extraterritorial double taxation at state level• Procurement and domestic content requirements • Equal participation in the U.S. political process• M&A Environment - Committee on Foreign Investment in the U.S. (CFIUS)• Federal advisory committees• Extraterritorial application of U.S. law and courts• State sanctions policies

Speaker Paul Ryan (R-WI) and Ways & Means Chairman Kevin Brady (R-TX) are proponents of the Blueprint, which has come under a lot of fire

• Border Adjustment Tax (BAT)• Denies the deduction for cost of imported goods, exempts income generated from exports• Ardent opposition from retailers, importers, Senate

• Territorial tax system

• Removes net interest deduction and gives full expensing

Latest—

• The White House and Senate Finance have both publicly parted with the Blueprint and both stated they want to drive tax reform forward

• House GOP plans to hold hearings on the Blueprint, including the BAT, after Easter recess

Trump’s stated motto is “Buy American, Hire American”

Unique position of GOP President taking a traditionally Dem position

A recent presidential memo directed that pipelines should “use materials and equipment produced in the United States, to the maximum extent possible and to the extent permitted by law"

This is unique in its directive to a private company

We’re focused on “Buy America” in appropriations bills, especially if the bipartisan infrastructure idea becomes live

Evan HoffmanOrganization for International Investmentehoffman@ofii.org 202.659.1903OFII.org

April 25, 2017

OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT

PEDA Spring Conference

Ensuring Pennsylvania is

Globally Competitive

#PEDAspring17 @investPA @PEDAtweets

OUR MISSION

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The Office of International Business Development (OIBD) is committed to helping

Pennsylvania companies increase their export sales and to encouraging foreign

companies to invest in Pennsylvania.

OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT

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With one of 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

encourage foreign companies

to invest in Pennsylvania.

OUR INVESTMENT SERVICES

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Networking with potential partners, including:

Aiding companies in setting up U.S. 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

• Suppliers• Colleges & universities• Law firms• Accounting firms

• Banks• Real estate professionals• Construction &

engineering firms

JOINT VENTURE PARTNERSHIP PROGRAM

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Pennsylvania regularly receives economic

development lead opportunities for companies

interested in:

• locating in

• investing in

• trading with

• contracting with or

• partnering with

businesses located in Pennsylvania.

PENNSYLVANIA ECONOMY

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Pittsburgh, PA

PENNSYLVANIA’S ECONOMY

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largest economy in the world

19th

A GDP of

$709B USD

Pennsylvania is located in a region that is so prosperous that, if the area within a 320-km radius of Philadelphia was considered to be a single economy, its GDP would be greater than France, the 6th

largest economy in the world.

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We are the 19th Largest Economy in the World

Pennsylvania’s Gross Domestic Product – USD $709 billion

USD $2,418billion

USD $709.0billion USD $646.0

billion

USD $370.2billion USD $295.1

billion

France Pennsylvania Saudi Arabia UAE Denmark

Source: BEA Regional Data, GDP by State, GDP in Current Dollars, 2015 (2016 is not available yet)

Source: The World Bank, GDP Ranking, updated 2.1.17

PENNSYLVANIA’S ECONOMY

PENNSYLVANIA ECONOMY

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12.8 million

5.9 million

5.8%

population

residents employed

unemployment rate

Source: US Bureau of Economic Analysis, Dept of Commerce, US Bureau of Labor Statistics

Jobs added since 2015

82,5900

PENNSYLVANIA’S ASSETS

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• Stable Economy

Large, growing and diverse economy

• Comprehensive Infrastructure

Transportation, water resource, energy

• Strategic Location

Central to U.S and Canadian businesses and consumers

• Modern Workforce

Well-educated, highly skilled

• Diversified Industries

Highly diversified with a strong manufacturing base

• World-class EducationHundreds of world-class institutions of higher education

• Game-changing Resources

Supply and demand, Marcellus Shale, manufacturing

PENNSYLVANIA’S INFRASTRUCTURE

273 ports to the Atlantic Ocean, Gulf of Mexico & Great Lakes

6 international airports 4 Class 1 railroads 8 Foreign Trade Zones

ACCESS TO TALENT AT WORLD-CLASS UNIVERSITIES

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PA UNIVERSITIES ARE LEADERS IN ENGINEERING, LIFE SCIENCES, APPLIED TECHNOLOGY EDUCATION, PLASTICS, FINANCE, AND MORE.

MAJOR MULTI NATIONALS IN PENNSYLVANIA

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PENNSYLVANIA –STAYING RELEVANT

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PEOPLE

We offer a ready-made market

opportunity.

• 12 million+ consumers

• 6.5 million workers

READY

Our workforceis ready for you.

INCLUSIVE

We welcomeinternational businesses.

• 6,100+ foreign-owned businesses

• 334,500+ employees

EXTENSIVE

Large to small,we have it all.

PENNSYLVANIA –FOREIGN DIRECT INVESTMENT

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Pittsburgh, PAPhiladelphia, PA

FDI IMPACT

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Foreign Owned Business Locations

Service3,01149%

Manufacturing3,09651%

Employees of Foreign Owned Businesses

Service148,662

44%

Manufacturing186,209

56%

Source: Dun & Bradstreet, July 2016

6,107 Foreign Owned Locations in PA

334,871 Employed by Foreign Owned Businesses

FDI TRENDS FOR PA – SOURCE MARKETS

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Source: FDI Markets, Data is Jan 2003 through Jan 2017

FDI TRENDS FOR PA - INDUSTRY

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Source: FDI Markets, Data is Jan 2003 through Jan 2017

FDI TRENDS FOR PA – PROJECT TYPE

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Source: FDI Markets, Data is Jan 2003 through Jan 2017

FDI TRENDS FOR PA – BUSINESS ACTIVITY

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Source: FDI Markets, Data is Jan 2003 through Jan 2017

WHY PENNSYLVANIA?

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Source: FDI Markets, Data is Jan 2003 through Jan 2017

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PENNSYLVANIA –

STAYING RELEVANT

Appalachian Trail on Peters Mountain, PA

IMPACT MARKETS

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• High potential

• Growing population

• Growing entrepreneurial class

• Increased ability & interest to invest abroad

• Growing wealth

• Safe harbor for investments

Presque Isle lighthouse-Erie, PA

MANAGEABLE MARKETS

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• PA already has existing relationships

• Sister Cities

• Chambers of Commerce

• Cultural/Ancestral Connections

• Government relationships & contacts

• Entrepreneurship

• Strong education culture

• Money to invest

City Hall, Philadelphia, PA

MEDIA

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RELATIONSHIPS

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• Be in the Market• PA Representative

• Business Missions

• Develop Local & International Resources

• Chambers

• Embassies

• Educational institutions

• Ambassador programs

• Engaging existing international companies

WORKFORCE DEVELOPMENT

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• Train for the future

• Engage students at younger ages

• Less gender specific career paths

• Redefine manufacturing training

• Perceptions can mean lost potential

PLANNING FOR THE FUTURE

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Lancaster, PA

PLANNING FOR THE FUTURE

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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.

PLANNING FOR THE FUTURE

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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.

CONTACT US

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David BrielExecutive Director, InvestmentOffice of International Business DevelopmentPennsylvania Department of Community & Economic Developmentdbriel@pa.gov717-720-7373http://dced.pa.gov/invest

Thank you!

dced.pa.gov/invest

York, PA

#PEDAspring17 @Unilog1

Mr. Suchit Bachalli

CEOUnilog Content Solutions

Ensuring Pennsylvania’s Global Competitiveness

Evan Hoffman, Organization for International Investment (OFII)

David Briel, PA DCED Office of International Business Development (OIBD)

Suchit Bachalli, Unilog Content Solutions

#PEDAspring17 @InsourceJobsUSA @InvestPA @Unilog1

Q & A