Six cities in the US – Seattle, Washington; Columbus, Ohio; San Antonio, Texas; Minneapolis/St Paul, Minnesota; San Diego, California; and Portland, Oregon – are forging together under a FDI pilot programme to develop their investment attraction plans in the hope of building and strengthening their global identities.

The pilot programme, called the Global Cities Initiative, is a joint project of Washington, DC-based think tank the Brookings Institution and US banking giant JPMorgan Chase. It intends to equip metropolitan leaders with tools to expand the global reach of their local economies by leveraging their assets and focusing on key indicators such as advanced manufacturing, exports and infrastructure. The programme falls under Brookings Institution’s Metropolitan Export Initiative, which is part of its Metropolitan Policy Programme. The metro FDI pilot is the next phase of the Global Cities Initiative exchange, a network of metropolitan areas committed to establishing actionable plans to promote greater global trade and economic competitiveness.

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Globalising Seattle

Ed Murray, the mayor of Seattle, is particularly excited about the initiative as he believes it will help the Central Puget Sound region take advantage of its deep international, economic, social and cultural ties to increase FDI and bring more middle-income jobs to the region. “The greater Seattle region is poised to become one of the most globally economically competitive regions in the US,” he says.

Josh Brown, executive director of the Puget Sound Regional Council, argues that the Puget Sound region already has an enviable position in foreign exports due to its ports, aerospace and software companies. “Our life sciences and philanthropic sectors have enormous global impact,” he says. “But we can do better when it comes to direct foreign investment within the region.”

As part of the pilot programme, Seattle, and the five other cities involved in the initiative, will discuss the process for developing an FDI plan together. To be part of the pilot, each metro area had to show that they are ready, capable and committed to going through the process of producing a metro plan that has a good chance of implementation. Each city was selected after an extensive application process.

Like Seattle, San Diego's leaders see the city’s strengths as being linked with its strong ties to international markets, high‐growth industries and its culture of innovation. “We have the necessary ingredients to attract FDI to the region,” says San Diego mayor Kevin Faulconer.

Forging ties

Portland also enjoys strong international ties. Chris Harder, economic development director for the Portland Development Commission (PDC), emphasises the relationships and connections made while promoting Portland's export markets, which he says translate into FDI opportunities. “We are doing outbound trips, taking firms overseas, connecting businesses with other businesses and creating sales opportunities and joint-venture relationships,” says Mr Harder. “We found that while promoting Oregon exports overseas, we were creating relations with companies that were also interested in investing in our region. The FDI initiative highlights new tools and approaches on how we can do this.” 

Already the PDC takes a slightly different approach to trade promotion by focusing on four key strategies. The first is concentrating on its leading export industry, computer electronics, which is anchored primarily by Intel. The second is highlighting companies across many industries that have sold their products or services to other markets, either by chance or via companies around world that have sought them out. The third is increasing the number of small to medium-sized businesses that are thinking about exporting, and accessing existing export opportunities via resources in the Portland region such as the Port of Portland. The fourth is underscoring branding and marketing.

“We are known worldwide, particularly for green development and clean tech,” says Mr Harder. “We have found that when Portland leaders travel around the world, they are often asked how Portland does this and achieves high sustainability. They want to learn from us.”

Modernising policies

Brad McDearman, a fellow and the director of the Metropolitan Export Initiative with the Metropolitan Policy Programme at the Brookings Institution, strongly believes that cities that are engaged in export promotion can also attract substantial FDI. “The goal of the project is to help leaders in US metropolitan areas reorient their economies toward greater engagement in world markets through trade and expanded FDI opportunities,” he says.

Yet while instigating Brookings’ export promotion pilot with 28 metropolitan locations around the US, Mr McDearman found that participants claimed they did not promote exports well but believed their communities were “good” at promoting their locations for FDI. After writing up their export promotion plans, these locations realised they needed work on their FDI promotion as well. “What they found was that a governor might go one place, a mayor another, and a chamber of commerce member yet another. Meanwhile, the federal government might be engaging in an entirely different promotion programme,” says Mr McDearman.

Consequently, Brookings and partner JPMorgan Chase, which has a history of helping businesses connect to global markets, are now involved in the pilot programme to help cities implement a strong FDI promotion plan. That effort includes working with regional economic groups, chambers, governor’s offices, mayor’s offices, surrounding counties and even special industry sector groups to define the FDI section of their promotion programmes and engage more purposefully about their global future. 

“The rationale is so clear,” says Mr McDearman. “We arguably have not done this the way it’s been done in Germany or South Korea. Exports and FDI have not been advertised in a coordinated and aggressive way. In piloting the FDI piece, we are trying to figure out what it means to put together an FDI plan at the metro-area level that pulls together the federal, state and local effort.” In other words, how does each metropolitan location differentiate itself and how does it define FDI?

A forward impetus

Historically, metropolitan areas have left FDI promotion to the state or the federal government, “but metros know their clusters,” says Mr McDearman. “And their goal should be to generate a bigger pipeline of companies that should be interested in those clusters.” Consequently, the pilot is looking at everything from greenfield investment to mergers and acquisitions. “We are asking the metros with which we are working to take a position so that they know what buttons they want to push,” says Mr McDearman.

In short, the FDI initiative advocates a strong focus on innovation and engagement in the global economy by all parties. “Metros need to have a much broader economic development approach if they want to be successful in the 21st Century,” he states. “Global engagement is one big piece of that.” The goal is to have the first six pilot programmes released in either December 2014 or January 2015, then put out an application for another round.