Voice of the Practitioner
While there is much overlap in the types of services required to help an existing firm grow when compared with attracting a new one, the focus ofthis section is on targeting companies already in place that are likely to reinvest and add jobs. To succeed, these existing companies need access to dependable suppliers, a quality workforce, satisfied customers, efficient and effective production and distribution systems, information to inform company decisions about understanding and addressing market trends.
Many regional economic development organizations quickly incorporate foreign-owned investors into their existing programs for business retention and expansion (BRE). For maximum impact, existing BRE efforts must go beyond typical business visitation and services offered and meet the special needs of foreign-owned enterprises.
High-value BRE programs engage a full range of business assistance services. They examine the unique (and mundane) challenges facing foreign-owned firms, then engage regional economic and workforce development organizations, MEP Centers, educational institutions, Small Business Development Centers, export promotion entities, universities and federal labs, business associations, and other resources to remove obstacles that impede success and connect them to opportunities for growth.
- Create a list of foreign-owned firms in the area’s targeted industries that require different levels of on-going attention
- Assign an account manager to reach out to each targeted firm
- Monitor area news about these firms, including investments and potential threats or opportunities
- Advise the firm in building a business case for its parent firm to make new investments locally
- Help the firm find new customer markets from their local facility
- Conduct visits to targeted firms to validate what is known and to learn about firm-specific issues
- Assist the firm in reviewing its products, develop new products, or create value-added services
- Help local suppliers meet international or firm-specific production or quality standards
- Communicate identified industry- or firm-specific issues or opportunities to partners systematically
Imperial Valley (California) EDC
Imperial Valley EDC covers a large, mostly rural area located within 2-4 hours of both San Diego and Los Angeles. IVEDC CEO Tim Kelley sees great value in fostering connections between businesses (including FOEs) in the region and resources available in the big cities. To develop those relationships, he regularly invites representatives from federal and state agencies to update local businesses on changes in government policies and procedures as well as new programs that may reduce their cost of doing business or encourage expansion. Recent programs have addressed procurement, new incentives, services available from USDA Rural Development and US Commercial Services, tax credit programs, and SBDC services.
Siemens in North Carolina
Siemens has expanded operations in North Carolina numerous times, attributing those decisions in part to its collaborative partnership with the state and local EDOs. With each expansion in Charlotte, the complexity of complying with regulation increased, yet the state EDO was prompt in responding to company questions regarding these changes. The company found helpful the continuous communication by the state incentive compliance organization and recognition of the evolution of its investment projects. This history of successful incentive support directly assisted in the state landing projects that otherwise could have gone to locations not only outside North Carolina, but outside the U.S. These effective aftercare practices may contribute to Charlotte being ranked 11th in FDI deals per capita, out of 381 metropolitan areas analyzed.
Georgia MEP (GaMEP) working with Yamaha Company
Adam Garrib et. al. report (pp. 27-28) that the Yamaha Company, a vehicle manufacturer operating in Newnan, Georgia, worked with GaMEP staff to implement an updated OHSAS 18001-safety management system in which they leveraged the expertise of Georgia Tech/GaMEP staff to streamline the procedure for the yearly internal compliance audits. Through its interaction with GaMEP, Yamaha increased production capacity and improved labor utilization, which resulted in reduced cycle time, a 61 percent risk reduction, and a total cost savings of $87,000 per year.
GKN America Corporation, Newtown, North Carolina
GKN America Corp. announced a $100 million expansion of their automotive supply manufacturing center that was motivated in part by appreciation for a liaison who kept the company, the U.S. subsidiary of United Kingdom-based GKN PLC, apprised of relevant developments such as proposed legislation, changes in incentive programs, and organizational changes occurring at the state Commerce agency. State and local economic developers also worked with GKN to act on their desire to seek opportunities to serve on local organizations’ boards, participate in roundtable discussions, and offer business advice to other prospective investors to build a stronger community network.
San Diego Regional Economic Development Corporation is helping its existing foreign-owned firms partner to craft a compelling, well-researched case for selling the region to its corporate leaders as a key U.S. beachhead. They work to connect the multi-national to industry peers and institutions locally as well as provide export assistance to help the local facility develop and access global markets.
Mississippi’s Saturday School
A creative example of aftercare that emerged during interviews is a Saturday school in Mississippi for children of foreign workers at nearby Nissan, Toyota, and Yokohama manufacturing plants aimed at ensuring the children have a means of keeping their Japanese language skills fresh. The regional EDO in this case ensures that leadership at Japanese foreign-owned enterprises were aware of the Saturday school during the selection process and actively connected the families of new Japanese executives to the school once they settled in the area.
Cooperation in Aftercare. This report prepared by Ecorys Netherlands summarizes best practices from the UK, Ireland, Germany, Estonia, Lyon, and Finland, and includes recommendations for EDOs. Table 5.7 of the report (pp. 87-89) contains helpful information about cooperation in organizing and delivering aftercare services.
Organization for International Investment, Understanding Aftercare: Attracting foreign direct investment means knowing how to help your global companies grow.
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