The White House America First policy suggests that job creation is something that should be stimulated through a primarily domestic approach. This, coupled with rhetoric around the likes of NAFTA would seem to underpin that idea. You might think that in this case, US Economic Development Organizations (EDOs) would shift their own strategies (which already often strongly resourced towards domestic attraction), further in this direction and away from Foreign Direct Investment (FDI).
However, this is surely the wrong approach for American prosperity, as even the reddest of states would likely acknowledge. An obvious example of this would come from last week’s announcement of Toyota’s multi-billion dollar investment in Kentucky. This is a major investment from a Japanese firm, although Toyota’s integration into daily life may leave some almost thinking of it as American. Just the prospect of such investments for states across the Union should be enough to ensure EDO’s continue to look outwards.
A National Commitment
At the federal level too, Select USA continues to be a prominent organization, promoting the United States at trade and investment events across the world. It also hosts its own annual Washington DC Summit in June, which offers a meeting place for EDOs and hundreds of investors, and hopefully investments. Moreover, Select USA recognizes that it is behind the curve compared to other countries in its national FDI promotion activity, and is now se
. Of course, there is an irony in this increased courting of FDI, while discouraging US companies to themselves invest overseas.
Community FDI Strategies?
In this context, EDOs at all levels of geography may well consider ramping up of their FDI efforts – with a coherent strategy behind it – as an important step. Indeed, in the past 5-10 years, and certainly since Select USA was formed, FDI has enjoyed a greater profile within US economic development. But despite this, there are still states with little formal, sustained FDI activity. Contrast this with a country like Ireland (population 4.6 million), with an EDO staff of more than 250 dedicated to FDI attraction, notwithstanding the domestic market is obviously far smaller.
Nevertheless, there are plenty of states that that do have a robust structure and strategy, while the Brookings Institute Global Cities Initiative has sought to do the same at the MSA level. Therefore, away from the politics, economic developers countrywide (even those with limited resource) can benefit from following workable a FDI strategy of their own.
Besides, unless US federal policy fundamentally shifts, America First will still not stop the US from comfortably being the largest recipient, and largest source, of FDI in the world for the foreseeable future.