SRI International’s Center for Innovation Strategy and Policy (CISP), in conjunction with the Center for Regional Economic Competitiveness (CREC) and Stone & Associates (S&A), partnered with the Economic Development Administration (EDA), SelectUSA, and the Trade Promotion Coordinating Committee (TPCC) to implement the International Engagement Ready Communities (IERC) initiative. The initiative is producing a validated set of tools for communities across the U.S. to use to attract FDI and increase exports. These tools will help communities across the U.S. take advantage of the benefits that flow from FDI and exports.
The research report was the first key deliverable of the initiative. It comprises an in-depth quantitative and qualitative analysis of successful international engagement strategies. It captures patterns of performance (quantitative analysis) and summarizes international engagement policies and strategies in action (qualitative analysis). The analyses contained in the report, coupled with inputs from subject matter experts and regional partners, were used to develop a toolkit. The toolkit enables regions to develop individual strategies — based on a vetted international engagement framework — for attracting FDI and promoting exports. It draws extensively from effective practices, examples, case studies, checklists, and summary briefings on specific topics.
The quantitative analysis is a cross-sectional regression, with model specifications grounded in the relevant literature. The analysis is designed to discover possible determinants of FDI and export success and to flag sectors of importance to communities as they develop strategies to attract FDI and promote exports. Highlights of the quantitative model include a variety of relevant demographic/economic components (education, population, unemployment), fixed assets (transportation, infrastructure, etc.), and policies (tax burden, state expenditures, etc.) The quantitative approach is designed to tease out the most important factors that drive FDI attraction and promote exports at the regional level.
The research team conducted the qualitative research that contributed insights to the Final Research Report not readily captured by the rigorous empirical methodology. This qualitative research also provided a wealth of content that is incorporated into this toolkit.
To conduct the qualitative research, the research team employed an iterative approach to collect and analyze data, determine common themes, and thereby identify common and effective practices in attracting FDI and expanding regional exports. Using grounded theory and inductive reasoning, the team sought information and supporting data that would illuminate the process by which regions and states develop international engagement plans; determine the factors that influence FDI investor decision-making; identify effective programs, practices, and policies that successfully attract FDI or promote exports; and locate and assess existing tools available to support regions in boosting their ability to attract FDI and promote exports. We anticipated that this bottom-up research would generate the insights that inform the overall theory and broader conclusions about the common and effective practices discussed below.
To that end, the research team conducted an extensive review of the literature and supplemental primary research organizing more than 40 intensive stakeholder and practitioner interviews for this report. For the literature review, the research team methodically scanned publications sourced from the Brookings Global Cities Initiative; associations that represent state and regional economic development organizations and other levels of state and local government; peer-reviewed academic journals; nongovernmental research reports; federal documents related to multi-agency economic development initiatives; and press announcements describing individual FDI deals. In total, the team reviewed and gleaned information from over 225 discrete sources. Initial sources of information, including topical experts, led the team to additional sources from which to gather pertinent information.
We sought interview subjects engaged in activities or strategies that went beyond what the industry perceived as common practice to attract FDI and promote exports. We identified interview candidates using several sources: they appeared in the literature review; other researchers, stakeholders, or practitioners reported their extraordinary effort or approach; and/or as we iterated through the process, we identified gaps in our research (geographic variation, differences in strategies, etc.) and sought additional representatives from those regions to fill those gaps. The information from stakeholders included federal agency staff, national and state membership organizations, public interest groups, think tanks, site selection experts, state economic development officials, and overseas representatives and consultants.
In total, the CREC/S&A team received over 100 recommendations for communities/regions engaged in a wide variety of innovative and effective practices. The recommendations described the rationale for nominating each region, supplemented by information from online research of websites, publications, and strategic plans. In considering whom to interview, we applied the following factors in selecting 40+ communities/regions as interview candidates. Our goal was to balance the following:
- The characteristics of the effective practices that we expect are important (based on the literature and our experience) for which the region was nominated
- Opportunity to understand important factors beyond variables in the quantitative research findings, as suggested by the quantitative research team and our literature review
- Capturing information that was previously unreported, undocumented, or less known in economic development professional circles
- The extent of the region’s experience, depth of practice, and history with FDI attraction and export promotion
- Geographic diversity
- Variation in the regions’ economic characteristics (e.g., size, industry concentrations, etc.)
As conceptual findings began to emerge from the research process, the team captured those in informal working documents and continually refined and expanded the set of findings based on additional information collected and analyzed. Organizing these informal findings aided the team’s understanding of the relationships between different elements driving FDI attraction and export promotion. As the research team assessed the information gathered through the expert and practitioner interviews, we compared those insights with the existing literature to generate conclusions about common and effective practices.
For a more detailed description of the research approach, see the IERC Final Report.