NABE –Foreign Direct Investment a regional perspective

Sieb Hoogstra, OCO Global16 September 2009

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Agenda

1. Introduction

2. Global FDI

3. USA regional FDI

4. How to respond?

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Introduction

Some facts

Per year approximately 10,000- 15,000 FDI projects

A very competitive market

Attracting FDI has many advantages

– Higher paid jobs

– Direct + indirect jobs

– Cluster building

and even outward FDI has positive effects ...........

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Global FDIOCO Global

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Global FDI - Destinations

Asia and Western Europe are large receivers of FDI

North America attracts 8% of FDI, but is source of 25% of FDI

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Global FDI - Destinations

Over the last decade services have become more important in FDI

Upcoming sectors such as Renewable Energy, Pharma/Biotech

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Global FDI – Top destination cities 2008

Source : A New Investment Paradigm - OCO Global 2009

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USA regional FDIOCO Global

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Introduction

Structural reasons to invest in USA :

– Market (size of NA market, purchasing power, …)

– Competitiveness (productivity, flexibility of labor market, world class universities

& R&D, capability to attract international talent, …)

– Innovation (technology/organization/commercial, …)

Which make USA a “must be” location

Economic reasons to invest in USA :

– Globalization (technology and no expansion on home markets)

– Conversion rates (US as “low cost“ location)

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Introduction

Challenges:

Economic crisis

– Uncertainty about markets, financing, ...

– Protectionism

Opportunities:

Improved image USA

USA taking lead on upcoming sectors

USA first out of the recession ....

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Source : fDi MarketsTM – OCO Global

Top 10 destination states global FDI(2003-Q22009)

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Source : fDi MarketsTM – OCO Global

Top 10 destination states by world region(2003-Q22009)

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Source : fDi MarketsTM – OCO Global

High growth inward FDI to the USA 2003 - 2008

SectorNo of Projects

2003No of Projects

2008Percentage

Increase Top 3 States for Sector (Number of Projects 2003-2008)

Real Estate 2 23 1050 California (11), Texas (10), New York (9)

Alternative/Renewable energy 4 45 1025 Texas (14), California (11), Illinois (9)

Communications 14 42 200 California (42), Texas (24), New York(23)

Industrial Machinery, Equipment & Tools 21 61 190 North Carolina (24), Georgia (23), California (20)

Financial Services 28 81 189 New York (78), California (57), Texas (28)

Transportation 8 19 138 Texas (14), Florida (9), Illinois (7)

Business Services 20 47 135 New York (66), California (31), Illinois (23)

Software & IT services 51 103 102 California (127), New York (75), Texas (44)

Textiles 28 50 79 New York (83), California (41), Florida (18)

Electronic Components 17 30 76 California (19), Michigan (14), Texas (11)

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Source : fDi MarketsTM – OCO Global

Top 10 source states global FDI (2003-Q22009)

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Source : fDi MarketsTM – OCO Global

High growth outward FDI from the USA 2003 -2008

SectorNo of Projects

2003No of Projects

2008Percentage

IncreaseTop 3 States for Sector (Number of Projects 2003-2008)

Alternative/Renewable energy 6 43 616 California (38), New York (20), Virginia (9)

Real Estate 31 151 387 Colorado (78), California (69), New York (53)

Biotechnology 14 44 214 California (67), Massachusetts (35), New Jersey (19)

Transportation 33 85 158 Tennessee (72), Georgia (62), California (50)

Machinery, Equipment & Tools 49 126 157 Texas (84), Connecticut (76), Illinois (63)

Textiles 43 105 144 California (105), North Carolina (70), New York (63)

Aerospace 20 25 125 Illinois (35), Connecticut (25), North Carolina (13)

Beverages 22 49 123 Georgia (92), New York (41), California (15)

Communications 76 169 122 California (298), New Jersey (81), Illinois (69)

Financial Services 113 249 120 New York (548), California (95), Illinois (68)

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How to respond?OCO Global

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Introduction

Responses to the crisis by companies:

– Postponement of expansion projects

– Spreading risk

– Risk averse market entry

– More research and decision time

– Tough negotiations

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Introduction

How to address the challenges?

– Aftercare

– More targeted positioning

– Pro-active company approach

– Enhance service offer

– Improve investment environment

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THANK YOU

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Points of Contact

Sieb Hoogstra

Director

T: +32 (0) 2 554 1251

E: sieb.hoogstra@ocoglobal.com

OCO Global (Head office)6 Citylink Business Park, Durham St,Belfast, BT12 4HB, Northern Ireland

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