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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.”

social.media

Man Brings Social Media Business to Chandler

The front of his business card reads, “Poet, world traveler, human being.”

The smell of old books and antique belongings emanate throughout Patrick Smith’s apartment. A bottle of prohibition Whiskey sits on display next to an ancient looking hieroglyphic stone.

After many years of traveling internationally, Smith, a Chandler resident, has decided to bring his business, BiBoBu, to Arizona.

“There is something that spiritually connects me to the mountains in the desert,” Smith said. “This is where I want to live permanently.”

He relates his love of the desert to the same landscape of Israel, where he lived for seven years. For over a decade, Smith traveled to more than 15 countries including Greece, Egypt, Israel, Spain, Morocco, and France. For work, he owned and managed restaurants, nightclubs, and cafés in those countries.

While living in Israel, Smith experienced discrimination as an American in a foreign country where the population was primarily Jewish. Many landlords didn’t want to rent him a home or hire him because he wasn’t Jewish.

For a short period, he fell on hard times and was forced to live in a cave where he read books, wrote poetry, and studied the Hebrew language. Practically penniless, and living off the little money his father was sending, he could barely afford food. Smith eventually found a job at a café in Tel Aviv, and later managed restaurants and eventually owned a nightclub.

Now, Smith owns a marketing company and website, BiBoBu, which uses social media sites — such as Facebook and Twitter — for companies to help advertise their products. BiBoBu is a marketing tool that companies can use to tailor their advertising campaigns in order to fit their customer base. It groups all of the social media sites together in one place, making it easier for companies to utilize. College campuses such as Northern Illinois University use BiBoBu to recruit students, spread the word about alumni fundraisers, and engage students in campus events.

Smith’s people skills from working in the hospitality industry abroad and in the U.S. for so many years seem to be what sparked his interest in social media outlets and the business world. “Communication is key in working with people, and that’s what I’ve learned,” Smith said. “This is the generation of social media.”

Smith said he met many different people throughout his travels, and one day he wants to write a book.

Now settled in Arizona, Smith runs his business from a place he can finally call home.