Tag Archives: foreign direct investment

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Phoenix eyes Mexico City Trade Office

The Phoenix City Council on Tuesday unanimously voted to move forward with plans to partner with the Arizona Commerce Authority to open an Arizona Trade Office in Mexico City.

“Phoenix is taking the right steps to become a global city, and we’re ready to open our first trade office in Mexico City,” said Mayor Greg Stanton. “This partnership with the Arizona Commerce Authority demonstrates that we’re all committed to increasing exports, and that we know we can be more effective if we work together.”

The City, ACA and other regional partners plan to collaborate in the same office space in Mexico City. The partnership will better leverage the City’s investment and lower overall costs.

The City Council also voted to authorize the firm Molera Alvarez to represent and advance the City of Phoenix’s efforts with Mexico, specifically in the areas of trade, promotion, foreign direct investment and tourism.

Funding Startup Companies Jumpstart Economy

GPEC boosts state’s economy by attracting more foreign direct investment

The Greater Phoenix Economic Council’s California 50 program — which aimed to fly 50 Golden State CEOs to Phoenix for an opportunity to tour and explore the region’s business-friendly environment — proved to be so popular that they expanded it to 100 a week after its launch.

But it may be GPEC’s pitch to CEOs even farther away that makes the biggest impact on Arizona’s economy.

“GPEC is focused on a specific region in China, defined by Shanghai and 10 other cities connected by high-speed rail,” says Ron Butler, managing partner at Ernst & Young in Phoenix and co-chair of GPEC’s International Leadership Council. “This region (known as the ‘Z Corridor’) features China’s largest concentration of industries, including solar, medical device, IT, pharmaceuticals, high-tech manufacturing and chemicals. GPEC has made tremendous strides over the past several years in China, particularly with solar and renewable energy companies. Now, the organization is looking to leverage those relationships and expand into other, capital-intensive industries.”

GPEC’s effort is significant, Butler says, because export industries and foreign direct investment (FDI) drive economic growth, create wealth within the region, and tend to be capital-intensive operations that pay higher-than-average wages. Currently, FDI accounts for 73,000 jobs in Arizona and the state saw a 235 percent increase in FDI from 2005-2010, from just over $270 million to more than $904 million.

“By focusing on the Z corridor, a zone known for its solar, high-tech, bio-medical, and chemical industries, GPEC has identified a region that can appreciate what Arizona and — more importantly Arizona workers — can do well,” says Ilya A. Iussa, assistant professor of law at Phoenix School of Law.

But it’s not just investment from China that is giving Arizona an economic boost within the solar and renewable energy industries. In addition to China’s Suntech, the region has seen investments from Spain’s Rioglass and Abengoa, England’s Faist, Germany’s Solon, France’s Saint-Gobain, and Canada’s Cosma International.

“GPEC smartly targets the regions and countries that represent significant growth opportunities, like Canada, China and Western Europe, and works these markets with effective marketing and business development strategies,” Butler says. “Now, with a more concentrated effort underway in China and successful positioning as both a leader in the U.S. solar market and an on-the-record supporter of expanded free trade with China, the Greater Phoenix region is poised for amplified growth in FDI, particularly from China.”

Despite its success, experts says Arizona still has some work to do.

“Our neighboring states and biggest competitors far outrank us in national FDI and export-trade rankings,” Butler says. “California is first for FDI and second for exports, while Texas is second for FDI and first for exports. As such, we must continue evaluating our market for additional FDI and export industry opportunities, and look for ways to increase our competitiveness in these areas.”

Lawmakers have identified one area that needs to be addressed to gain a competitive edge on other states.

“One of the first things we should do is focus on developing a highly educated workforce that will attract companies and businesses looking to move their headquarters,” says Rep. Matt Salmon, R-5. “In addition, it is equally important for us to create a pro-business environment and that comes by reducing harmful regulations that hamper economic growth. Both would increase Arizona’s role in the global economy.”

In order to be increase its global presence and become more competitive with neighboring states like California and Texas, Butler says Arizona must increase the number of export industries operating in the state.

“We can increase our competitiveness for these types of investments,” he says, “with a targeted economic development program for export industries, similar to the Renewable Energy Tax Incentive Program (SB1403), which has brought significant investments to the region and the Qualified Facilities Tax Credit (HB2815), which expanded the successful renewable energy program to include qualified, export-based investments.”

Globe, International Business Growth in Arizona

New Group Aims To Boost International Business Growth In Arizona

Most Arizona legislators and business leaders now recognize the value of international commerce to the state. It hasn’t always been that way, but today there is broad agreement that exports from Arizona and foreign direct investment into Arizona from around the world create jobs and community growth. After all, 95 percent of the world’s population is outside the U.S., along with 70 percent of the world’s purchasing power. Why not tap into that power?

Arizona has made relatively slow progress with international trade compared to states such as California and Texas. Those states have each made greater per capita investments to encourage local companies to export and foreign companies to invest locally. Arizona is ranked in the bottom of U.S. states for foreign direct investment — No. 31 — according to the U.S. Department of Commerce. This creates an excellent opportunity for improvement.

With exports, the picture is a little better. Arizona businesses have done a reasonably good job of selling their products overseas. Exports from Arizona-based companies increased to $19.2 billion in 2007, contributing to good job and tax revenue growth. These figures rank Arizona as the 17th leading state for exports.

People all over the world know about the Grand Canyon, but few know about businesses within Arizona. Exports can help build global awareness of Arizona businesses, making the state a more viable candidate for foreign investment. That’s important because foreign companies investing in Arizona pay higher wages than local companies, and with today’s sputtering economy, the state’s economy needs all the help it can get.

According to the Greater Phoenix Economic Council (GPEC), if Arizona could increase foreign direct investment to be the 17th ranked state as it is with exports, it would attract 84,000 more jobs and $12.5 billion more in capital investment. How’s that for an economic shot in the arm?

“We need investment to capture strategic industry growth for Arizona, like Germany-based solar companies,” says Rod Miller, vice president of international economic development for GPEC. “In the current environment, increasing our investment in economic development initiatives will support a quicker and stronger economic recovery.”

Miller’s data shows a return in capital spending and taxes of as much as $110 for every dollar spent attracting companies to Arizona. GPEC is making progress despite Arizona’s low per capita investment. The good news is that many know what’s needed. The bad news is that Arizona, like other states, faces a challenging budget crisis.

It has been against this backdrop of both opportunity and challenge that the Arizona International Growth Group (AZIGG) was founded in 2007. AZIGG was created to provide a place for Arizona-based business owners to gain all the international information and connections they need to be successful overseas. Each of the existing business-support organizations has a piece of the international puzzle, but none has a full view of importing, exporting, international company attraction and international company retention. AZIGG brings it all together, including forums to attract and retain foreign companies.

AZIGG has quickly attracted more than 1,000 members from the Arizona business and business-support community. The group meets monthly to hear international business speakers and discuss ways to help Arizona-based businesses to export or to attract foreign direct investment.

AZIGG encourages cooperation between local international business and cultural groups, including the consulates, the Department of Commerce, GPEC, other city economic development resources, the Phoenix Committee on Foreign Relations, the World Affairs Council of Arizona, financial institutions working with the U.S. Export-Import Bank, trade associations such as the Arizona Technology Council, and international business service providers such as accounting, insurance, marketing and legal firms. AZIGG allows each resource to address the group monthly to keep business owners aware of the most recent ideas, news and opportunities.

In the same spirit of cooperation, the global law firm Squire, Sanders & Dempsey is stepping forward as the first business sponsor for AZIGG. This month, the firm is hosting the AZIGG International Business Fair at its law offices in Downtown Phoenix in order to make local businesses aware of all the services available for companies to grow internationally. Arizona and Arizona-based businesses need to be especially creative to compete against other states for opportunity dollars.

AZIGG encourages both government and private business actions to grow international development. Monthly meetings feature Arizona-based entrepreneurs such as Lee Knowlton of Kahala Corporation (which owns Cold Stone Creamery), Colin Christie of MX Secure and Omar Sayed of Succeed Corporation, all of whom are pioneers for Arizona in connecting their companies to the global market place. Similarly, global service firms such Squire, Sanders & Dempsey show leadership to help others succeed internationally.

Business owners now have more choices with less risk to grow their businesses internationally. Their success ultimately will result in a more balanced and sustainable economy for Arizona. Besides AZIGG, the U.S. Commercial Service’s Export Council and foreign consulates are available as resources to Arizona-based business owners. Additional resources are available on the AZIGG Web site, in AZIGG monthly meetings and as part ofthe AZIGG International Business Fair.

Besides international sales growth, there are other initiatives that all residents of Arizona can support to create a more level playing field for companies based in Arizona. They include:

  • More direct international flights to Sky Harbor International Airport.
  • Sending a clear message that Arizona is a state open to legal immigration.
  • Improving education from below average to above average in the U.S.
  • Providing tax incentives to attract capital-intensive industries.
  • Supporting international sales with education and infrastructure to increase exports.


Doug Bruhnke is president and founder of the Arizona International Growth Group (AZIGG) and CEO and founder of Growth Nation. For more information, visit www.azigg.com