Promoting Business Investment in the United States: SelectUSA Services for U.S. State and Local Economic Development Organizations

Tazeem PashaManager, Global Business AttractionSelectUSA, U.S. Department of CommerceFriday, September 28, 2012

© International Trade Administration 2012

About SelectUSA

1. The Administration’s policy on business investment

2. The establishment and functions of the SelectUSA initiative

3. The Interagency Investment Working Group

SelectUSA was created by the Executive Order of the President of the United States in June 2011.

The Executive Order outlines:

© International Trade Administration 2012

About SelectUSA

• SelectUSA was in the Office of the Secretary until Nov. 3 when it came into the Commercial Service

• Primary U.S. Government Effort to Support Business Investment in the United States

• Geographically neutral in the United States

• What We Do:1. Act as Information Clearinghouse2. Act as Ombudsman3. Act as Advocate4. Connect Investors with U.S. States5. Provide Policy Guidance6. Educate Investors7. Provide Guidance to U.S. Economic Development Organizations8. Co-chair the Interagency Investment Working Group

© International Trade Administration 2012

Establishing the business

Maintaining success in the United States

Investment Process and SelectUSA Services

• Help firms learn about• The ease and benefits of doing business in the U.S. • The profiles of different U.S. industries• Foreign direct investment statistics

• Provide information on U.S. policies and help firms comply with regulations in setting up and operating their business

• Work directly with firms to resolve any problems on a case-by-case basis

• Connect firms with local or state resources for investment opportunities and incentives• Connect firms to industry associations for industry-specific information and potential business partners

• Help firms locate federal programs and incentives for business retention and expansion

• Identify and work to remove barriers to success in cooperation with federal agencies

Understanding the U.S. investment

climate

Deciding where, how, and with

whom to invest

© International Trade Administration 2012

SelectUSA Services:

Information Clearinghouse

SelectUSA provides actionable information to firms to help them…

• Incorporate a business in the U.S.• Understand basic U.S. tax and legal concepts• Learn about incentives available to businesses in the U.S.• Connect with U.S. state, city, or regional economic development offices to learn

about investment opportunities• Apply for a business-related visa

Foreign investors can communicate with SelectUSA by phone or email in Washington, DC, or meet with members of the U.S. Foreign Commercial Service around the world.

© International Trade Administration 2012

Client

SelectUSA

Federal Agency

SelectUSA Services:

Ombudsman AssistanceSelectUSA works across the federal government on a case-by-case basis to:

• Address investor concerns and issues• Connect with a federal agency/ office to seek insight into

a specific case• Offer direct communication between the relevant federal

agency and the client• Identify federal regulations or processes to U.S. policy

makers, that may negatively impact the U.S. business climate

The SelectUSA Ombudsman function is considered business sensitive and administered strictly by the SelectUSA HQ:

• SelectUSA does not share company information• SelectUSA may report on the types of federal

regulations, countries, industry sectors and other aggregate information about cases to determine the efficacy of its ombudsman function

© International Trade Administration 2012

SelectUSA has the expertise to help state and local economic development organizations:

Develop a data-driven FDI attraction strategy

Collaborate within their region

Invest in an information-rich website

Ensure foreign operations’ productivity through the use of meaningful metrics

Secure organizational funding tied to multi-year performance

Explore additional measures, including retention and expansion or company partnerships with local universities

7SelectUSA.gov

SelectUSA Services:

Services for EDOs

Promotion event for State of Louisiana (e.g. presentation by FDI practitioners or a match-making reception)

One-on-one meetings between Louisiana and Chinese government representatives

Meetings with Chinese companies that Louisiana has identified

Single Location Promotion (SLP) Tailor-made events developed collaboratively, promoting individual U.S. jurisdictions as FDI destinations.

For example:

SHANGHAI

SelectUSA Services:

Help U.S. EDOs in FDI Promotion

© International Trade Administration 2012

Domestic and International Outreach: Raise awareness about the U.S. investment climate by leveraging platforms that maximize impact upon clients. Outreach channels include:

• Integrated media campaign including earned press coverage, publishing articles to highlight the U.S. climate, targeted advertising and other initiatives

• Introducing investment promotion opportunities to U.S. EDOs like trade missions, in-market visits, single location promotion programs and other initiatives

• Extending the SelectUSA expertise to targeted programs that maximize its exposure to its clients through speaking opportunities, seminars and conferences

• Training programs for multipliers like U.S. EDOs, USG agencies and others that interface with SelectUSA clients through their own organizations

SelectUSA Services:

Outreach and Engagement

© International Trade Administration 2012SelectUSA.gov

The U.S. and Turkey agreed to be the central point of contact for existing and potential foreign investors seeking information and opportunities and to provide mutual assistance to investors in contacting investment and industry experts in the other country

January 2011: Republic of Turkey Prime Ministry Investment Support and Promotion Agency (ISPAT)

SelectUSA Memoranda of Intent with China, India, Russia and TurkeyOctober 2009: China Investment Promotion Agency (CIPA)

The U.S. and China agreed to pursue strengthened bilateral investment ties, expanded business cooperation between U.S. and Chinese enterprises, and enhanced economic growth opportunities.

November 2009: Invest India

“Today’s agreement will enhance promotion of FDI that leads to increased exports…, playing an integral role in getting Americans back to work.” (Michelle O’Neill, Acting Under Secretary of Commerce for International Trade)

April 2010: Russian Ministry of Economic Development

The U.S. and Russia agreed to pursue strengthened bilateral investment ties, expanded business cooperation between U.S. and Russian enterprises, and enhanced economic growth opportunities.

SelectUSA Services:

Outreach and Engagement

© International Trade Administration 2012SelectUSA.gov

FDI and the U.S. Economy

5.3 million

$41 billion

$163 billion

$227 billion

$408 billion

18%

33%

Workers Employed by U.S. Affiliates of Foreign Firms in the U.S. in 2010

Amount U.S. Affiliates of Foreign Firms spent on R&D in the U.S. in 2010

Amount U.S. Affiliates of Foreign Firms Spent on Capital Investments in 2010

Size of FDI Flows into the U.S. in 2011

Amount of Wages Paid to Employees of U.S. Affiliates of Foreign Firms in 2010

Percent of all U.S. exports come from U.S. subsidiaries of foreign firms in 2010

U.S. Affiliates of Foreign Firms On average Pay 33% More than the economy-wide average in 2009

Source: Bureau of Economic Analysis© International Trade Administration 2012

Global Inbound FDI Stock (1980 - 2010)

Example: Global FDI TrendsAm

ount

in $

Mill

ions

© International Trade Administration 2012

• Figures available on market value basisSource: UN Conference on Trade and Development

SelectUSA.gov

Share of Global FDI Flows Captured by the United States

Source: UN Conference on Trade and Development (UNCTAD)

Example: U.S. FDI Trends

19801981

19821983

19841985

19861987

19881989

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20100.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

© International Trade Administration 2012

5% | $132.5b

10% | $244.6b

2%|$58.6b

21% | $527.8b 10% | $265.4b 8% | $201.9b

12% | $293.8b

2% | $53.1b

4% | $98.2b5% | $126.1b

U.S. FDI TrendsTop 10 FDI Stock Positions, 2011

Source: Department of Commerce, Bureau of Economic Analysis – FDI by Ultimate Beneficiary Owner

© International Trade Administration 2012

Rank 2011 FDI Position in the United States

Billion USD

1 United Kingdom 527.82 Japan 293.83 Germany 265.44 Canada 244.65 France 201.96 Netherlands 132.57 Switzerland 126.18 Ireland 98.29 Australia 58.6

10 Belgium 53.1

38.6% | $98.1b33.4% | $53.1b25.8% | $48.0b

56.1% | $6.0b

71.3% | $9.5b

28.8% | $22.4b

26% | $9.8b

U.S. FDI TrendsTop 10 FDI Growth Markets, 2011

Note: Numbers denote 5 year compound annual growth rate (2007-2011) 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 2012

Fastest Growing Sources of FDI in the United States, by Compound Annual Growth Rate

(2006-2011)

Rank Country Growth Rate Billion USD

1 Israel 78.59% 26.82 China 71.25% 9.53 New Zealand 56.14% 6.04 India 40.81% 9.85 Ireland 38.58% 98.16 Belgium 33.40% 53.17 Singapore 28.84% 22.48 Spain 25.57% 48.0

9 United Arab Emirates 23.38%

17.410 Norway 22.40 29.1

22.4% | $29.1b

78.6% | $26.8b

23.4% | $17.4b

Example: U.S. FDI TrendsTop Export Markets, 2010

Figures in USD BillionsSource: Bureau of Economic Analysis

Canada: $249.1

Australia: $21.8

UK: $48.4 Germany: $48.2 Netherlands: $34.9France: $26.9Belgium: $25.5

Mexico: $163.3

Brazil: $35.4

China: $91.9

Japan: $60.5

S. Korea: $38.8

Singapore: $29.0

Hong Kong: $26.5India: $19.2

Top U.S. Export Markets are also among the top sources of FDI

© International Trade Administration 2012

Industry breakdown of total U.S. FDI stock ($2.5 trillion)

Source: Department of Commerce, Bureau of Economic Analysis

U.S. FDI Trends

© International Trade Administration 2012

total manufac-turing; 32.9%

retail trade; 2.0%

informa-tion; 5.8%

depository institutions; 6.0%

finance & insurance;

14.8%

real estate, 1.9%

profes-sional, sci-entific, and technical services;

3.5%

other indus-tries; 21.0%

food; 5.1%

chemicals; 24.1%

primary & fabri-cated

metals; 5.3%

machin-ery; 8.9%

computers & electronic products; 7.8%

electrical equipment, ap-pliances, and components,

0.9%

trans-portation

equip-ment; 11.0%

other manufacturing; 35.0%

Source: Department of Commerce, Bureau of Economic Analysis© International Trade Administration 2012

FDI and the U.S. EconomyTop 10 FDI Growth Sectors in the United States

(Compound annual growth rate in FDI position between 2006 and 2011 on a historical cost basis)

*“Other Manufacturing” does not include food, chemicals, primary and fabricated metals, machinery, computers and electronic products, electrical equipment, appliances and components, and transportation equipment.

finance & insurance

computers & electronic products

transportation equipment

total manufacturing

chemicals

other industries

retail trade

*other manufacturing

machinery

professional, scientific, and technical services

0% 2% 4% 6% 8% 10% 12% 14%

What SelectUSA does NOT do (and why not)

SelectUSA does NOT … Because…

Generate investor leads- Violates geographic neutrality- Domain of state/local U.S. EDOs

Promote one U.S. location over another

-Violates geographic neutrality

Provide direct assistance to foreign firms

- U.S. government does not offer direct assistance to any firms

Match- making -Violates geographic neutrality

Invitation Letters for Visas - Outside of SelectUSA scope

© International Trade Administration 2012SelectUSA.gov

Tazeem PashaManager, Global Business AttractionSelectUSAU.S. Department of CommerceTel: 202-482-0648Email: tazeem.pasha@trade.gov

SelectUSA.gov

Thank You

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