The great expanse of the midwest US is often ignored by foreign investors, who prefer to locate their businesses in the country’s bi-coastal metropolitan hubs. But as wage and raw material costs rise in China, the region is exploiting its potential as an alternative to low-cost destinations of the East as well as to higher-cost US states such as New York and California.

Missouri’s outgoing governor Matt Blunt – who declined to run for a second term and will leave office in January – is determined the state capitalises on what may become a shift of investment from Asia into the rural US. Mr Blunt has seen a lot more global trade interest in Missouri recently and hopes it will translate into hard investment. He attributes this, in part, to the business reforms made during his tenure, which include legislative reform and tax credits for businesses, creating regional economic growth through quality jobs. “We have improved our general approach to regulation and legislation, dramatically reducing costs for employers and improving our competitiveness because the legal system is often an impediment to US investment,” he says. Inter-state competition for foreign investment is fierce and is sometimes regarded as a weakness of the US economy, adds Mr Blunt, who also sees it as a strength. “We are highly attentive to our competitive position, which is why we address problems continually to improve it,” he says.


Greatest investment potential

Although Mr Blunt says the biotechnology and renewable energy sectors represent the greatest investment potential for Missouri, current capital inflows originate from a diverse range of business sectors, including software and IT, automotives, construction, electronics and real estate. In 2007, Dynamotive Energy Systems announced a $24m investment to build the first fully commercial industrial biofuel plant in the US, giving weight to Missouri’s claim to be a developing renewable energy centre. “We have the technological know-how and the raw materials to develop plant-based renewable fuels as we are one of the top five states for crop production,” says Mr Blunt.

Building on Missouri’s natural strength as an agrarian economy, an animal health and plant science corridor of activity has developed between Columbia, Missouri, and Manhattan, Kansas. “About one-third of animal health products in use are produced in that corridor,” says Mr Blunt. Foreign investors in this field include Bayer crop science, Japanese animal health company Novus, German firm Boehringer Ingelheim Vetmedica, Israel’s Teva Neuroscience and UK firm GlaxoSmithKline.

Missouri produces high-quality graduates from its 57 colleges and universities but future growth of the biotechnology and renewable energy sectors relies on foreign knowledge-based workers. And although the state has made business-friendly reforms, it has no power over federal reform. “There is no question that the US needs to reform its immigration laws, particularly as it relates to knowledge-based workers,” says Mr Blunt. The current economic crisis is also beyond state control, the consequences of which, he says, pose the biggest threat to Missouri’s economic growth: “The US needs to keep with pro-growth strategies – the danger is that the response to the liquidity crises will lead to over-regulating business and a real effort on the part of government to stifle economic growth.”

In this regard, eyes turn now to president-elect Barack Obama. Against the backdrop of accusations of inexperience levelled at both Mr Obama and Sarah Palin, Republican governor Blunt’s view is nothing if not predictable as he is the second-youngest serving governor in the US. “I would argue that the experience of a governor is more suited to serving as president of the US. I believe four of the past five presidents have served as governors before being elected,” says Mr Blunt.



2004State of Missouri


2001State of Missouri

Secretary of state

1999Missouri General Assembly


1993US Navy

Engineering officer aboard the USS Jack Williams and navigator and administrative officer on the USS Peterson