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Foreign Direct Investment

The Enclave for EntrepreneursElk Grove Village, IllinoisFebruary 21, 2018

U.S. Government-wide Program

International Trade Administration

Facilitated over $23 billion in Foreign Direct Investment (FDI)

All Industries

• Conduit for foreign investors into United States

• Foreign Investors are certified

“clean” money

Teresa Nortillo CEcD, Vice President of Business Development and Consulting Services, StateBook International• Provides location and data analytics and economic development consulting

services

• Former Manager in Ernst & Young’s Location Investment Services tax practice focusing on corporate expansion/relocations

• Former Business Recruitment Consultant for the Kansas Department of Commerce, Great Lakes Office, managed and closed over $1 Billion in capital investment projects

• Master of Public Administration from Central Michigan University

What is Foreign Direct Investment

Foreign Direct Investment (FDI) is an investment in a business by an investor from another country for which the foreign investor has control over the company purchased. The Organization of Economic Cooperation and Development (OECD) defines control as owning 10% or more of the business

The investing company may make its overseas investment in a number of ways:

• Setting up a subsidiary or associate company in the foreign company

• By acquiring shares of an overseas company• Merger or joint venture• Acquiring assets of existing company or locating a new facility

Why Attract Foreign Direct Investment?

FDI Location Decision Factors

• Countries political and economic stability

• Geographical - supplier and customer base

• Market size and entry

• Total cost of operations

• Availability of quality labor

• Taxation

• Incentives

Keys to Attracting Foreign Direct Investment

• Target industries and supply chain linkages.• Just-in-time, Last Mile

• Improve efficiencies using AI and IT

• BRE program• Suppliers

• Customers

• Impediments to market entry

• Stay ahead of the M & A/deal curve• Bureau Van Dyk, Crunchbase, OCOGlobal, Conway Data

Foreign Direct Investment Case Studies

• Sofidel, an Italian tissue group, participated in both the 2013 and 2015 SelectUSA Investment Summits, and has made multiple investments across the U.S. Sofidel is committed to investing over $300 million in the U.S. through 2017, and creating over 600 jobs by 2018.

• Kudelski Group, a leading cybersecurity advisor and innovator from Switzerland, announced in June, 2016 it would open a second global HQ in Phoenix, and expects to create a significant number of high wage jobs. ITA assisted KG with customized research reports and facilitated access to federal, state, and local level services.

• SATA Group, a manufacturer headquartered in Valperga, Italy for more than a century, announced in May, 2016, it will invest $114 million to build a machining operation in Brownsville, Texas, creating 300 jobs over a 10-year period.

SelectUSA brings FDI to the U.S. using StateBook

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Data-Driven Decisions

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Chicago area Industry targetsPer World Business Chicago

Top 5 Chicago Area Imported Commodities

7.6%

8.5%

13.3%

31.8%

38.7%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%

MEDICAMENTS/Substance used for medicines

PORT DIGTL AUTOMATIC DATA PROCESSMACH

PARTS OF AIRPLANES OR HELICOPTERS

PHONES FOR CELLULAR NTWKS OR FOR OTHWIRELESS

CRUDE OIL FROM PETROLEUM ANDBITUMINOUS MINER

Top 5 Commodities and % Share Total

5 top industries in Chicago MSA

EMPLOYMENT % TOTALAVERAGE % AVERAGE

YEARLY CHANGE

YEARLY CHANGE

Retail Trade 470,112 11.41% 8,066 1.81%

Accommodation and Food Services 392,214 9.52% 11,313 3.12%

Manufacturing 384,784 9.34% 69 0.02%Professional, Scientific, and Technical Services 338,120 8.21% 9,201 2.95%Administrative and Support and Waste Management and Remediation Services 321,575 7.80% -6,412 -1.75%

Finance and Insurance 259,724 6.30% 9,399 4.13%

Wholesale Trade 253,863 6.16% 2,269 0.92%

Industry and Labor Market DataTOTAL

EMPLOYMENTLOCATION QUOTIENT

JOBS PER 1000

Production Occupations 319,760 1.08 70.243

Production Workers, All Other 40,950 5.02 8.996

Team Assemblers 28,560 0.79 6.274Machinists 25,950 2.05 5.701

Inspectors, Testers, Sorters, Samplers, And Weighers 18,520 1.1 4.069

First-Line Supervisors Of Production And Operating Workers 18,300 0.92 4.021

Packaging And Filling Machine Operators And Tenders 16,720 1.33 3.674

Assemblers And Fabricators, All Other 15,680 2.1 3.443

Helpers--Production Workers 11,180 0.8 2.456

Welders, Cutters, Solderers, And Brazers 7,930 0.64 1.742

Cutting, Punching, And Press Machine Setters, Operators, And Tenders, Metal And Plastic

7,780 1.24 1.709

Automotive Supply Chain and Linkages

Automotive Site Selection• Automotive Plant

- Good metals and assembly skills availability/competitive wages/excellent labor-management relations

- Smaller metro areas, if suppliers are present• Competitive Wages• Distribution - JIT, Last mile- Auto market access (freight costs)/Interstate highways- Access to automotive and metal working centers/close to suppliers

- OEMs- First Tier- Second Tier

- Available buildings with rail and cranes or sites with rail- Competitive electric rates- Incentives

Ginta Rubin, Managing Director, NRW.INVEST, North America LLC• FDI Professional

• Responsible for promotion and coordination of international companies seeking to business in the United States

• Instrumental in establishing business relationships with Germany, Lithuania, Hong Kong, India, China, Peru, Egypt, and Turkey

• Recognized at the 2016 Governor’s Exports Award Ceremonies

Roughly 160 million people within a radius of 500 km around the state capital of Düsseldorf

Source: GfK Geomarketing, catchment area analysis, Dec. 2015

No. 97

1.Düsseldorf 159.8

2.Amsterdam 154.1

3.Paris 150.4

4.Munich 141.9

5.London 130.5

6.Berlin 113.9

Ranking 500 km radius inhabitants (in millions)

Ranking 500 km radius purchasing power (in € million)

1. Düsseldorf 3,457,053

2. Paris 3,261,390

3. Amsterdam 3,248,556

4. Munich 2,805,398

5. London 2,703,188

6. Berlin 1,902,834

•From no other location in Europe so many people with such high purchasing power can be reached within such a short distance as from North Rhine-Westphalia:

Tools to Identify FDI opportunities

• Follow US Agency notification• DCEO

• Governor

• World Business Chicago

• Crain's

• Associations• Manufacturing

• Cyber Security

• Data Resources

• OCO Global, Conway Data

Steve Kim, Managing Partner, RKJ Legal• Attorney with extensive global experience with offices/affiliates in Dubai,

Istanbul, Baghdad, Seoul, and Shanghai

• Member of the Illinois Supreme Court’s Rules Committee

• Commissioner – Human Rights Commission, State of Illinois

• President and General Counsel – TRAC Development Group

• J.D. – Loyola University Chicago School of Law

Dr. John GattoPresident, FrankfurtRhineMine Corp.

Dr. John Gatto • President of FrankfurtRhineMain Corporation• Economic Development Officer • Chief Government Affairs Counsel of Federal State

of Hessen• Together with his Chicago based team he identifies

U.S. and Canadian companies planning expansion in Europe and assists with site selection

Next Steps• SelectChicago 2018 – June 25 - 27

• Follows SelectUSA the week before

• Location – Area Hotel TBD

• $500 – Community Registration

• Seeking Corporate Sponsors

• www.selectchicago.org for more information

• Contact: Doug Petroshius, Program Director, Doug@selectchicago.org

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