Sub-national Diplomacy: How local governments and institutions attract Foreign Direct Investment (FDI)
05/08/24 11:09
August 5, 2024
Throughout my international work assignments as a United States commercial service officer, I witnessed the resounding success of local governments, industries, and institutions in their fierce competition to attract and retain foreign direct investment (FDI). Property owners and economic development leaders, with their visions of dignified ribbon-cutting and groundbreaking events, work tirelessly to bring foreign companies to their communities. The true measure of success, however, comes later, when these new companies recruit and hire talented workers, thereby generating new sources of local tax revenue. My experiences in Brazil, Romania, Canada, and Louisiana have allowed me to hone two unique approaches to winning FDI, which have proven to give their jurisdictions a competitive edge.
One of the unique strategies I developed was a North American approach to subnational diplomacy. During my time in Canada, I facilitated collaboration between Canada’s Indigenous First Nations and United States Native American corporations. Economic leaders from these communities came together at matchmaking sessions, tribal council gatherings, and trade events to promote and exchange business models, generating export revenue for tribal members and diversity for these communities. This approach not only created economic opportunities but also led to the emergence of new educational and vocational training opportunities.
Second, I observed how subnational engagement between states, counties, provinces, and major cities stokes the FDI engine worldwide. Trade missions expand upon the time-honored Sister Cities cultural exchange model to spur mutual investments across borders. Mega-states such as California, São Paulo, Ontario, and cities such as Los Angeles, Barcelona, and London stand out as global trading leaders. I organized and hosted dozens of trade missions to and from the United States on behalf of these local jurisdictions, many of whom employ international business strategists as nations do. Recently, the Brookings Institute launched its Metro program that coaches and supports several such metropolises on attracting global trade and FDI directly, over and above the international trade programs of their respective states and provinces. The Brookings’ Global Cities Initiatives empowered some 30 metropolitan areas to create global export and promotion plans.
In June 2024, I attended an FDI promotional event hosted by economic development agencies within greater Los Angeles to welcome and inform international delegates en route to participate in the U.S. Commerce Department’s SelectUSA Investment Summit. Participants learned about this mega-region's educational, transportation, and workforce attributes. Later that week, I moderated a panel of international company officials at the Investment Summit in Washington; the panelists had recently established U.S. subsidiaries and shared “know before you go” tips on preparing and collaborating on successful expansion. Among their lists? Prepare your internal teams, polish your best pitches to lure prospective employers, gravitate toward where your supply chain and key customers reside, engage exhaustively with local government officials, and ensure the presence of critical professional services in finance, law, and transportation. Top of that list? Choose a place with a high quality of life where employees and supply chain partners will enjoy their daily lives.
Throughout my international work assignments as a United States commercial service officer, I witnessed the resounding success of local governments, industries, and institutions in their fierce competition to attract and retain foreign direct investment (FDI). Property owners and economic development leaders, with their visions of dignified ribbon-cutting and groundbreaking events, work tirelessly to bring foreign companies to their communities. The true measure of success, however, comes later, when these new companies recruit and hire talented workers, thereby generating new sources of local tax revenue. My experiences in Brazil, Romania, Canada, and Louisiana have allowed me to hone two unique approaches to winning FDI, which have proven to give their jurisdictions a competitive edge.
One of the unique strategies I developed was a North American approach to subnational diplomacy. During my time in Canada, I facilitated collaboration between Canada’s Indigenous First Nations and United States Native American corporations. Economic leaders from these communities came together at matchmaking sessions, tribal council gatherings, and trade events to promote and exchange business models, generating export revenue for tribal members and diversity for these communities. This approach not only created economic opportunities but also led to the emergence of new educational and vocational training opportunities.
Second, I observed how subnational engagement between states, counties, provinces, and major cities stokes the FDI engine worldwide. Trade missions expand upon the time-honored Sister Cities cultural exchange model to spur mutual investments across borders. Mega-states such as California, São Paulo, Ontario, and cities such as Los Angeles, Barcelona, and London stand out as global trading leaders. I organized and hosted dozens of trade missions to and from the United States on behalf of these local jurisdictions, many of whom employ international business strategists as nations do. Recently, the Brookings Institute launched its Metro program that coaches and supports several such metropolises on attracting global trade and FDI directly, over and above the international trade programs of their respective states and provinces. The Brookings’ Global Cities Initiatives empowered some 30 metropolitan areas to create global export and promotion plans.
In June 2024, I attended an FDI promotional event hosted by economic development agencies within greater Los Angeles to welcome and inform international delegates en route to participate in the U.S. Commerce Department’s SelectUSA Investment Summit. Participants learned about this mega-region's educational, transportation, and workforce attributes. Later that week, I moderated a panel of international company officials at the Investment Summit in Washington; the panelists had recently established U.S. subsidiaries and shared “know before you go” tips on preparing and collaborating on successful expansion. Among their lists? Prepare your internal teams, polish your best pitches to lure prospective employers, gravitate toward where your supply chain and key customers reside, engage exhaustively with local government officials, and ensure the presence of critical professional services in finance, law, and transportation. Top of that list? Choose a place with a high quality of life where employees and supply chain partners will enjoy their daily lives.