Promoting Business Investment in the United States: SelectUSA Services for U.S. State and Local Economic Development Organizations Tazeem Pasha Manager, Global Business Attraction SelectUSA, U.S. Department of Commerce Friday, September 28, 2012 © International Trade Administration 2012

About SelectUSA SelectUSA was created by the Executive Order of the President of the United States in June 2011. The Executive Order outlines: The Administration’s policy on business investment The establishment and functions of the SelectUSA initiative The Interagency Investment Working Group Suggested Talking Points: The United States in unequivocally open to international investment. With SelectUSA, we are actively engaging with firms, organizations, and other stakeholders that are interested in investing in the United States. Established by Executive Order of the President in June 2011, SelectUSA is the first U.S. government-wide initiative to facilitate business investment attraction, retention, and expansion in the United States. There is unprecedented international competition for FDI faced by U.S. states, regions, and U.S. economic development organizations. In the last three decades, the worldwide stock of FDI has grown from $700 million in 1980 to $19 trillion in 2010. Attracting more FDI to the United States is key to promoting economic and job growth. SelectUSA is geographically neutral and represents the entire nation. In doing so, we work with our states and regions to promote the U.S. investment climate. © 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: Act as Information Clearinghouse Act as Ombudsman Act as Advocate Connect Investors with U.S. States Provide Policy Guidance Educate Investors Provide Guidance to U.S. Economic Development Organizations Co-chair the Interagency Investment Working Group Suggested Talking Points: Structure: SelectUSA is housed in the U.S. Department of Commerce (DOC) within the U.S. Commercial Service (CS) of the International Trade Administration (ITA). SelectUSA has an interagency mission and works across U.S. government departments to provide an investor with a single point of contact. The U.S. Departments of State and Commerce collaborate closely on its unified mission to promote the United States for business investment.   Clients: SelectUSA services support state, regional, and local economic development organizations. Services: SelectUSA supports EDO’s and investors in the United States and around the world by: Promoting the benefits of investing in the United States Responding to inquiries about the U.S. business climate Helping investors encountering confusion, delays, or obstacles in a federal regulatory process Advocating on behalf of the U.S. government in a globally competitive business location decision Offering guidance on rules, regulations, procedures and policy positions that impact our global competitiveness Offering aftercare to companies that have already invested in the United States © International Trade Administration 2012

Investment Process and SelectUSA Services Establishing the business Maintaining success in the United States 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 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 Deciding where, how, and with whom to invest 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 Understanding the U.S. investment climate 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 © International Trade Administration 2012

Information Clearinghouse 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

Ombudsman Assistance SelectUSA Services: Client SelectUSA 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 Client Select USA Federal Agency © International Trade Administration 2012

Services for EDOs Develop a data-driven FDI attraction strategy SelectUSA Services: Services for EDOs 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 SelectUSA.gov 7

Help U.S. EDOs in FDI Promotion SelectUSA Services: Help U.S. EDOs in FDI Promotion Single Location Promotion (SLP) Tailor-made events developed collaboratively, promoting individual U.S. jurisdictions as FDI destinations. For example: SHANGHAI 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 © International Trade Administration 2012

Outreach and Engagement SelectUSA Services: Outreach and Engagement 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 Advocacy Cases: Individual U.S. state, local, and regional EDOs often compete against national level foreign governments in site selection competitions. To level the playing field, SelectUSA can, when appropriate, promote the U.S. business climate to a potential investor in an ongoing project that may be at risk, and when a federal-level engagement can convey the appropriate support. Senior leadership in USG, DOC, or ITA will be asked to engage on behalf of a U.S. EDO to help tilt the scale in favor of that investment being made in the U.S. If a U.S. governor, mayor, or county executive requests this support, the case must be referred to SelectUSA HQ staff to manage. SelectUSA.gov © International Trade Administration 2012

Outreach and Engagement SelectUSA Services: Outreach and Engagement SelectUSA Memoranda of Intent with China, India, Russia and Turkey October 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. January 2011: Republic of Turkey Prime Ministry Investment Support and Promotion Agency (ISPAT) 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 SelectUSA.gov © International Trade Administration 2012

FDI and the U.S. Economy 5.3 million $41 billion $163 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 Suggested Talking Points (Slides 3 and 4): Business investment by both domestic and foreign firms leads to economic growth by impacting U.S. jobs and exports. - Foreign investment plays an important role in the U.S. economy: - Foreign-owned companies operating in the United States support over 5.3 million U.S. jobs, - U.S. subsidiaries of foreign-owned firms account for 21 percent of all U.S. exports, and - The $2.3 trillion stock of FDI in the United States is equivalent to nearly 18 percent of U.S. GDP.   Source: Bureau of Economic Analysis © International Trade Administration 2012

Global Inbound FDI Stock (1980 - 2010) Example: Global FDI Trends Global Inbound FDI Stock (1980 - 2010) Amount in $ Millions Figures available on market value basis Source: UN Conference on Trade and Development © International Trade Administration 2012 SelectUSA.gov

Share of Global FDI Flows Captured by the United States Example: U.S. FDI Trends Share of Global FDI Flows Captured by the United States While overall, the United States is the largest recipient of FDI, the overall trend indicates that it receives a decreasing share of a growing pie. During the 1990s, we received approx. 25% of global FDI. Today, our share is less than 15 percent. The bottom line is that multinational enterprises have many choices when it comes to business location. Other markets have aggressive national-level outfits that engage these companies and attract them to their economies. The United States must engage with these firms at a level playing field to communicate that it remains the world’s largest, most stable market with incomparable advantages for a multinational firm. Source: UN Conference on Trade and Development (UNCTAD) © International Trade Administration 2012

2011 FDI Position in the United States U.S. FDI Trends Top 10 FDI Stock Positions, 2011 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% | $98.2b 5% | $126.1b Rank 2011 FDI Position in the United States Billion USD 1 United Kingdom 527.8 2 Japan 293.8 3 Germany 265.4 4 Canada 244.6 5 France 201.9 6 Netherlands 132.5 7 Switzerland 126.1 8 Ireland 98.2 9 Australia 58.6 10 Belgium 53.1 Source: Department of Commerce, Bureau of Economic Analysis – FDI by Ultimate Beneficiary Owner © International Trade Administration 2012

U.S. FDI Trends Top 10 FDI Growth Markets, 2011 22.4% | $29.1b 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% 26.8 2 China 71.25% 9.5 3 New Zealand 56.14% 6.0 4 India 40.81% 9.8 5 Ireland 38.58% 98.1 6 Belgium 33.40% 53.1 7 Singapore 28.84% 22.4 8 Spain 25.57% 48.0 9 United Arab Emirates 23.38% 17.4 10 Norway 22.40 29.1 23.4% | $17.4b 26% | $9.8b 28.8% | $22.4b 56.1% | $6.0b 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 States Source: Department of Commerce, Bureau of Economic Analysis – FDI by Ultimate Beneficiary Owner © International Trade Administration 2012

Top U.S. Export Markets are also among the top sources of FDI Example: U.S. FDI Trends Top Export Markets, 2010 Canada: $249.1 Australia: $21.8 UK: $48.4 Germany: $48.2 Netherlands: $34.9 France: $26.9 Belgium: $25.5 Mexico: $163.3 Brazil: $35.4 China: $91.9 Japan: $60.5 S. Korea: $38.8 Singapore: $29.0 Hong Kong: $26.5 India: $19.2 Top U.S. Export Markets are also among the top sources of FDI Figures in USD Billions Source: Bureau of Economic Analysis © International Trade Administration 2012

U.S. FDI Trends Industry breakdown of total U.S. FDI stock ($2.5 trillion) © International Trade Administration 2012 Source: Department of Commerce, Bureau of Economic Analysis

Source: Department of Commerce, Bureau of Economic Analysis FDI and the U.S. Economy Top 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. Source: Department of Commerce, Bureau of Economic Analysis © International Trade Administration 2012

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  Invitation Letters for Visas Outside of SelectUSA scope SelectUSA.gov © International Trade Administration 2012

Thank You Tazeem Pasha Manager, Global Business Attraction SelectUSA U.S. Department of Commerce Tel: 202-482-0648 Email: tazeem.pasha@trade.gov SelectUSA.gov