In Washington, Republican legislative power is now only limited by not having quite enough votes to overcome a presidential veto. But, depending on the issue, a few Democrat defectors in Congress, especially those facing re-election in 2016, could tip the balance in support of some key Republican proposals. Some had hoped that president Barack Obama might copy former president Bill Clinton's approach. When confronted with ascending Republican power, Mr Clinton famously staked out a new position in a State of the Union speech, saying “the era of big government is over”. But a Clinton-esque pivot does not appear likely.

Regardless of what happens, or more importantly what does not happen in Washington, US direct investors, especially on the private equity front, have been busy. Private equity funds did more than 5000 deals in 2014, approaching $1000bn, and completed more than 1500 initial public offerings or sales to other investors, totalling $450bn. These are significant increases in volume, with exits at 40% more than in 2013, and deal flow at its highest levels for eight years. Now, these funds have about $750bn ready to deploy and more is likely to be raised.

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Two trends to look for:

The first is that the portfolio companies of private equity firms continue to wring out operating costs. This is a frequent driver of location consolidation, relocation, outsourcing and the acquisition of similar firms or integrating suppliers. The arithmetic is compelling. If a company commands a price/earnings ratio of 13, every $1m of additional profit yields $13m more in exit value.

The second trend is that young companies, especially those with innovative products or processes, are found in many places, but they are increasingly targets for portfolio company acquisition. Communities may celebrate substantial levels of entrepreneurial activity, but, given investor appetites and strategies, if these young companies are acquired, the locations for their subsequent expansions may be up for grabs. 

Daniel Malachuk works with business and government leaders on global direct investment strategies. He has advised many of the world's leading companies and served in the public sector as director of White House operations. Email: daniel.malachuk@gmail.com