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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, [email protected]
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Studio 75 (lower level)