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Maine International Trade Presentation

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Presentation to Maine International Trade Conference, June 3, 2010. Why and how to pursue international business attraction.

Presentation to Maine International Trade Conference, June 3, 2010. Why and how to pursue international business attraction.

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    Maine International Trade Presentation Maine International Trade Presentation Presentation Transcript

    • Foreign Direct Investment Seminar The International Location Selection MAINE TRADE DAY 2010 June 3, 2010
    • OPPORTUNITIES IN INTERN Click to edit Master text styles Second level Third level Fourth level • Why Pursue International Business Fifth level • The Location Selection Process • Key Changes NATIONAL BUSINESS • Opportunities for Maine • A Suggested Strategy  B © 2010, CWS Consulting Group LLC
    • OVERV Click to edit Master text styles Why look to International Business? Second level VIEW The Lessons of Zheng He Third level Fourth level • 1405‐1433:  Zheng He  Fifth level leads seven voyages from  leads seven voyages from China, possibly as far as  the Cape of Good Hope • Sp rred ne economic Spurred new economic  and political relationships  throughout Indian ocean • Hai jin banned ocean‐going  exploration and trading. • Prevented the rise of any self‐sufficient economies along the coast.   y g Reversed much of the economic and technological growth of the  previous period © 2010, CWS Consulting Group LLC
    • OVERV Click to edit Master text styles Corporate Reasons for Going Global Second level VIEW • New markets for goods,  Third level new customers Fourth level Fifth level • New markets for labor, New markets for labor, • Possible improvements to  logistics,  • Possibility of lower costs, • Favorable business  environments, • Matching regulatory  oversight to market  opportunity © 2010, CWS Consulting Group LLC
    • OVERV Click to edit Master text styles What are the Benefits of International Business?  Second level VIEW Third level Fourth level Economic Growth Fifth level Better Jobs B tt J b General Prosperity International Partnerships and Security Innovation © 2010, CWS Consulting Group LLC
    • DYNAMICS Click to edit Master text styles How is Global Business Changing? Second level Third level Economic Globalization: Globalization (or  Fourth level The integration of national  globalisation):  Fifth level economies into the international  “An ongoing process by which  “A i b hi h economy through:  regional economies, societies  • Trade,  and cultures have become  • Foreign direct investment,  • Capital flows,  l fl integrated through globe‐ • Migration,  spanning networks of  • and the spread of Technology.  exchange. exchange ”  True Globalization is driven by a  combination of : • Economic Economic,  • Technological,  • Socio‐cultural,  • Political and  • Biological factors. © 2010, CWS Consulting Group LLC
    • DYNAMICS Click to edit Master text styles Old Worldview Second level Third level Fourth level Fifth level ME © 2010, CWS Consulting Group LLC
    • DYNAMICS Click to edit Master text styles New Worldview Second level Third level Fourth level Fifth level © 2010, CWS Consulting Group LLC
    • DYNAMICS Click to edit Master text styles New Realities in Global Economic Competition Second level • Corporate, MNC realities  Third level • Do you understand who  Fourth level (less cost reduction more  your competition is?   Fifth level value add) Are you Global or are  you National?   • Understanding the nature  of business “flow” in the  • What is your future  context of investment   context of investment sectoral base? (as base? (as  opposed to current  • Partnership rather than  activity base) j g object.  Partnering with  your investor‐base • What is your true value  to this base? • The relevance of innovation  in terms of growth f h © 2010, CWS Consulting Group LLC
    • THE LOCATION STRATEGY PROCESS
    • INTRO Click to edit Master text styles What is Site Selection? Second level ODUCTION T LOCATION STRATEGY Third level Are we selecting a site,…. Fourth level Fifth level TO ….Or a home for a business E How Do Companies (or Consultants)  Make Location Decisions? M k L ti D i i ? © 2010, CWS Consulting Group LLC
    • LOCAT PRIOR Click to edit Master text styles What are Companies Looking For? Second level TION Third level Labor Skills, Talent • All play some role Fourth level Fifth level • Specific importance  Labor and Operating Costs p g depends on the use d d th RITIES Partners, Customers and Vendors Transportation and Access Utilities and Other Infrastructure Real Estate and Facilities Business Environment, Taxation, and Incentives Quality of Life © 2010, CWS Consulting Group LLC
    • LOCAT PRIOR Click to edit Master text styles What are Companies Looking For? Second level TION Third level Labor Skills, Talent Fourth level Fifth level RITIES • Financial services • High‐tech • Pharmaceuticals • Aerospace • Automotive • Medical devices • Specialty Chemicals • Global Logistics Gl b l L i i Do We Have It?  Can We Get It?  Can We Develop It? © 2010, CWS Consulting Group LLC
    • LOCAT PRIOR Click to edit Master text styles What are Companies Looking For? Second level TION Third level Labor Skills, Talent Fourth level Fifth level Do We Have It?  Can We Get It?  Can We Develop It? Do We Have It? Can We Get It? Can We Develop It? RITIES • Demographics and age cohorts • Educational characteristics Educational characteristics • Training programs and credits • Community College system • Universities and specific research programs • Quality of Life and Cost of Living Talent can drive innovation and be a potent business attractor.   Education and recruiting must be in place to develop a sustainable Talent  Pool. Pool © 2010, CWS Consulting Group LLC
    • LOCAT PRIOR Click to edit Master text styles What are Companies Looking For? Second level TION Third level Labor Skills, Talent Fourth level Fifth level Entrepreneurial Talent RITIES • Does the community have  the means for attracting ideas as well as  people? © 2010, CWS Consulting Group LLC
    • LOCAT PRIOR Click to edit Master text styles What are Companies Looking For? Second level TION Third level Labor and Operating Costs Fourth level Fifth level • Salaries, benefits, and efficiency for specific occupations Salaries benefits and efficiency for specific occupations RITIES • Technology and telecommunications costs • Logistics and transportation costs • Utilities costs U ili i • Real estate rent/purchase and operating costs • Currency risk • =TOTAL START‐UP and RUN‐RATE COST © 2010, CWS Consulting Group LLC
    • LOCAT PRIOR Click to edit Master text styles What are Companies Looking For? Second level TION Third level Partners, Customers and Vendors Fourth level • Are the right networks in place? Fifth level RITIES © 2010, CWS Consulting Group LLC
    • LOCAT PRIOR Click to edit Master text styles What are Companies Looking For? Second level TION Third level Transportation and Access Fourth level • Can we move our people, goods, and ideas? Fifth level RITIES © 2010, CWS Consulting Group LLC
    • LOCAT PRIOR Click to edit Master text styles What are Companies Looking For? Second level TION Third level Utilities and Other Infrastructure Fourth level • Availability Fifth level RITIES • Redundancy • Capacity • Resiliency l • Cost © 2010, CWS Consulting Group LLC
    • LOCAT PRIOR Click to edit Master text styles What are Companies Looking For? Second level TION Third level Real Estate and Facilities Fourth level Fifth level • Importance depends on industry  RITIES and use • Does the right kind of facility  exist in the right place at the  exist in the right place at the right price? • Can I build the right facility in the  right place at the right place on  schedule? © 2010, CWS Consulting Group LLC
    • LOCAT PRIOR Click to edit Master text styles What are Companies Looking For? Second level TION Third level Business Environment, Taxation, and Incentives Fourth level Fifth level • Does the federal, state and local government  RITIES understand my business? • Is there a defined process for getting the permits  I need? • (Especially if I am from overseas) is there  someone who can help step me through the  process? • How responsive (or proactive) is the  government? • When will I know if I can move forward (or not)? • Is taxation fair for my activities in this  jurisdiction? © 2010, CWS Consulting Group LLC
    • LOCAT PRIOR Click to edit Master text styles What are Companies Looking For? Second level TION Third level Business Environment, Taxation, and Incentives Fourth level Fifth level INCENTIVES CANNOT MAKE A BAD LOCATION INTO A GOOD ONE. INCENTIVES CANNOT MAKE A BAD LOCATION INTO A GOOD ONE RITIES But they can help seal a deal and forge a partnership  Tax concessions or   Utility rate reductions exemptions  Service fee reduction or   Loans and loan guarantees exemptions  Employee tax credits  Infrastructure grants   Wage subsidies  Enterprise Zones  Land subsidies or grants  Foreign Trade Zones (FTZ)  Cash grants  Tax Increment Financing (TIF)  Employee training grants  Inventory tax reduction  Property tax abatements p y  Expedited permitting and  p p g approvals © 2010, CWS Consulting Group LLC
    • LOCAT PRIOR Click to edit Master text styles What are Companies Looking For? Second level TION Third level Quality of Life Fourth level Fifth level • What is Quality of Life? Culture RITIES • Will my people want to  Amenities come here and work here? Recreation • Can I recruit new people to  l Arts this location? Education Housing Community © 2010, CWS Consulting Group LLC
    • THE EVALUATION PROCESS Click to edit Master text styles A Business‐Based Process Second level E The Location Process allows companies to define their business needs and  then narrow the list  The Location Process allo s companies to define their b siness needs and then narro the list Third level of candidates based upon best‐fit.  A business‐based methodology matches companies to  Fourth level locations that will meet their needs for the long‐term.   Fifth level Field Analysis Final Location  Final Location S Selection and  Business  Location  Incentives  Needs  Screening Negotiations Assessment Financial  Modeling Executed  Solution NOTE:  Community probably not aware of project until Field Analysis! NOTE C it b bl t f j t til Fi ld A l i ! © 2010, CWS Consulting Group LLC
    • BUSIN NEEDS ASSESSM Click to edit Master text styles Understanding the Core Drivers Second level NESS First: Understand and define the need(s) Fi t U d t d d d fi th Third level d( ) Fourth level • Catalog of operations at each location in the current configuration Fifth level • Proximity to key partners or clients (internal and external) P i it t k t li t (i t l d t l) S • Key labor requirements and recruitability • Facility requirements MENT • Competitive factors • Market factors Location • Regulatory concerns Regulatory concerns Goals • Infrastructure requirements • Business continuity factors • Transitional or implementation requirements T iti l i l t ti i t • Real or perceived barriers to change • Govt’ assistance required (or issues to be avoided) • Other key location criteria © 2010, CWS Consulting Group LLC
    • THE EVALUATION PROCESS Click to edit Master text styles Front‐Loading the Process Second level E Third level Fourth level Challenge:  How can Communities enter the process earlier,  Fifth level and stay in the running longer?   S Field Analysis Final Location  Selection and  Business  Location  Incentives  Needs  Needs Screening Negotiations Assessment Financial  Modeling Executed  Solution S l i © 2010, CWS Consulting Group LLC
    • HOW IS THE WORLD CHANGING?
    • INNOV Click to edit Master text styles The Global Innovation Chain Second level VATION Third level Fourth level Innovation, not Cost Fifth level • Manage the stream and flow of  knowledge and research  k l d d h • Bring new products to new  markets • What is your position in that flow  of development? • Strategic, multi‐focused  approach • Interfacing Clusters = Mutual  Innovation  • Develops sub‐sectors for support  or spin‐off • Adding value to industry location Adding value to industry, location  and economy at large © 2010, CWS Consulting Group LLC
    • INNOV Click to edit Master text styles Using Innovation to your Advantage Second level VATION Third level Fourth level • How do Innovation Cycles work? Fifth level • Wh i What is your regional innovation  i li i cycle? • Avoid innovation “trends” versus  true “cycles” • Use these as unfolding points of  contribution for economic  contribution for economic development (targeted  investment) • Build on this for business Build on this for business  attraction/Development © 2010, CWS Consulting Group LLC
    • ENERG Click to edit Master text styles The Coming Fuel Crunch Second level GY Third level Fourth level Relative Increase in Fuel Costs (Indexed to 1996) Fifth level ? SOURCES:  Energy Information Administration, Bureau of Labor Statistics © 2010, CWS Consulting Group LLC
    • ENERG AND SUPPLY CHAIN Click to edit Master text styles Implication for Business Location? Second level GY Third level Fourth level Fifth level I Source: LogicNet Users Symposium 2009, David Simchi Levi © 2010, CWS Consulting Group LLC
    • ENERG AND LO Click to edit Master text styles Implication for Business Location? Second level GY Third level • Will manufacturing  Fourth level redistribute?  If so, how? Fifth level OCATION IM • What impacts will this have  on globalization (or re‐ regionalization)? MPACTS • Which green technologies are  best prepared to take over? • Will your community  participate in developing  these technologies, applying  g pp y g them smarter, or in adapting  your other strengths? © 2010, CWS Consulting Group LLC
    • REGULATORY PR Click to edit Master text styles Regulation and the “Home Market” Second level Third level • Regulation impacts the ability to  Fourth level penetrate a market Fifth level RESSURES • Access (proximity) to the  regulatory agency can help ease  the process • Additionally, “home market”  pressures can favor domestically  produced goods produced goods © 2010, CWS Consulting Group LLC
    • SUSTA Click to edit Master text styles Sustainability Pressures Second level AINABILITY What is sustainability? Wh t i Third level t i bilit ? • Environmentally sustainable – Ensures that  Fourth level degradation and consumption of land use, carbon  Fifth level use, energy is net matched by remediation and  i t t h db di ti d reclamation • Economically sustainable – Creates an ongoing, self‐ catalyzing cycle of activity generating positive ROI for  t l i l f ti it ti iti ROI f the community and business. • Culturally sustainable – Preserves the cultural and  historical resources of the community while  hi t i l f th it hil accommodating and supporting growth and progress • Workforce and talent sustainable – Provides a bi‐ directional relationship between labor and business  di ti l l ti hi b t l b db i by which critical talents are supplied to companies  to ensure success and where opportunities are  created for a broad range of occupations and talent created for a broad range of occupations and talent © 2010, CWS Consulting Group LLC
    • WHAT ARE THE OPPORTUNITIES FOR MAINE?
    • OPPORTUNITIES FOR MAIN Click to edit Master text styles The Size of the Market Second level • 4,600 businesses made  Third level Fourth level over $189 billion in capital  Fifth level investment in the US  between December 2007‐ September 2009 • 438 000 new jobs over 22 438,000 new jobs over 22  NE months g y / / • Roughly 1/5 to 1/4 of these  project were led by non‐US  companies  © 2010, CWS Consulting Group LLC
    • OPPORTUNITIES FOR MAIN Click to edit Master text styles Key Industries Second level • Educational Services Third level Fourth level • Energy (coal gasification,  Fifth level petroleum refining) petroleum refining) • Metalworking Machinery • Electrical Equipment Electrical Equipment NE • Industrial Machinery • R Renewable Energy (wind, solar,  bl E ( i d l biomass) • Semiconductors Semiconductors  • Life Sciences • Food production and Food production and  manufacturing © 2010, CWS Consulting Group LLC
    • OPPORTUNITIES FOR MAIN Click to edit Master text styles Current International Activity Second level • Maine companies already export goods  Third level Fourth level of at least $100,000 to 99 countries Fifth level • Request for trade assistance to MITC Request for trade assistance to MITC  are up 18% p • Most are for exports and new market  NE development • Existing International corporate base  includes: i l d • Financial Services • Composites/Advanced Materials Composites/Advanced Materials • Semiconductors • Industrial Equipment Industrial Equipment • Wood and Related Products © 2010, CWS Consulting Group LLC
    • OPPORTUNITIES FOR MAIN Click to edit Master text styles Strengths and Weaknesses Second level Strengths Third level Weaknesses Fourth level • Relatively low‐cost US location Fifth level • International Air  connections • Regional proximity to large  consumption centers in US  • Linkages between  and Canada transportation modes p NE • Existing international  • Broadband capacity and  companies and relationships access • Outreach activities to key  • Perception as remote international markets • Perceptions of weather and  • Talent base l b natural risk l k © 2010, CWS Consulting Group LLC
    • INVESTOR TARGETING – A PROACTIVE APPROACH
    • INVESTMENT AT Click to edit Master text styles Putting Things Together Second level Third level Fourth level Fifth level How do we match  How do we match TTRACTION STRATEGY community strengths and  goals to the needs of  business? b i ? Y © 2010, CWS Consulting Group LLC
    • INVESTMENT AT Click to edit Master text styles Reverse Engineering Second level Third level Understand the link between community attributes and business needs Fourth level Investment  Fifth level Market Analysis Industry Targeting Final Investment  TTRACTION STRATEGY Strategy  Attraction Plan Assessment • Collect published  • Determine existing  • Complete  and proprietary data  • Determine investor   industry base remediation plan as  on key criteria goals and resources • Understand key  required • Construct weighting  • Determine key  dynamics for  • Develop incentive Develop incentive  and ranking model  and ranking model stakeholders selected industries plan if required to test development  • Catalog site  • Examine availability  • Develop key  candidates under  characteristics of key inputs marketing targets and  prime and  • Determine market  • Look for key vendors  customized message  alternative scenarios and catalog regional  and partners and tactics for each • Combine screening  g attributes tt ib t • Determine existing Determine existing  Y results with other  • Develop deal  • Examine existing  reality and  structure(s) knowledge to  regional and local  perception of  understand market  economic base benefits and  dynamics • Establish initial  obstacles in the site  • Identify initial target  strategic parameters strategic parameters and region g industry candidates i d did Investment  Attraction Plan © 2010, CWS Consulting Group LLC
    • BEST PRACTICES Click to edit Master text styles First Steps Second level • Understand Your Communities Third level Fourth level • Organize and Prepare Fifth level S • Engage the Current Corporate Base • Build Real Connections • Build Regional Strength • Build Relationships Between Government, Business, Education,  and Economic Development dE i D l t • Develop a Coherent External Image Supporting Economic  Development • Actively Reach Out • Be Creative Be Creative © 2010, CWS Consulting Group LLC
    • Chris Steele Phone: (617) 314-6527 Email: chris.steele@cwsgrp.com THANK YOU VERY MUCH