It has been almost three months since I have provided an update on the Journey. The main reason is because I have had no time, thanks to my exciting experience participating in a program known as SelectChicago, Chicagoland’s first SelectUSA spin-off event for Foreign Direct Investment.
Since graduating college, my career focus has been City Management. One that I continue to be deeply passionate about. I had obtained a Master in Public Administration, with an emphasis in Urban Management from one of the nation’s top rated universities for city management. I had been an intern in four municipalities and went on to serve in a municipality for 12 years, with most of that time as the Assistant City Manager. My ultimate career goal had been achieved when I was appointed as a City Manager. Up until 2017, my entire career had been focused at the local level. Local government management in the greater Chicago area is my speciality. I had not learned anything about international affairs and trade.
As a resident of the City of Waukegan, Illinois I had heard of the non-profit, economic development organization (EDO) known as the Greater Waukegan Development Coalition (GWDC). This organization performs many noble services for the residents and business community of Waukegan and the surrounding areas. Their organization is unique; an EDO which also provides commercial development, festival management, and job training services. Their entire organization was founded and managed by private sector developers, real estate professionals, architects, and other professions.
Through a mutual acquaintance, the GWDC heard of my background and invited me to meet with them for assistance in a program that they operate known as SelectChicago. Naturally, I was confused since Waukegan, Illinois is more than an hours drive north of the City of Chicago and is not even in the same county.
They explained that SelectChicago does not refer to Chicago as a City but as a region. That is, from the perspective of foreign investors, there are three markets: East Coast, West Coast, and Chicago. This region of Chicago includes suburbs such as Milwaukee, Detroit, Green Bay, St. Louis, Minneapolis, Tulsa, Akron, Ohio, etc. If you are a person from the Midwest, your initial reaction is laughter at the absurdity that Akron, Ohio is a suburb of Chicago which is 366 miles away. But if you adjust your mindset to be one someone that is from another country, with having never been to the United States, Chicago is the only recognizable name of anything between the coasts. Contrary to what some Americans might think, the rest of the world does not know US geography as well as we do.
The GWDC group proceeded to explain that SelectChicago was created to attract Foreign Direct Investment (FDI). Foreign Direct Investment is a program of the Department of Commerce of the United States which screens companies that are interested in doing business in the US. Technically, investment refers to ownership of a company by a foreign entity by at least 51%, but it is common that FDI will bring partial ownerships in as well. The bottom line is that this is a way to bring new dollars into the midwest.
Naturally, I was curious as to why one organization representing the Waukegan area would spent time and resources assisting an entire region. The reason is that although Waukegan boasts a population of just under 90,000, it is still small when competing on a global scale. Therefore, the goal of SelectChicago is to create a team of municipalities to band together in order to be able to compete on an international scale.
I also asked, “Why would municipalities get involved?” In most real estate transactions, the community is approached first, to find out what the zoning is and then last, to apply for zoning approval and permits. It’s the private sector developers and real estate brokers that go out looking for the deals. The people at GWDC informed me that in many countries, government is the first place a foreign investor goes to in order to invest in the country. Therefore, investors coming to the US will assume that municipalities are the ones that know where the investment opportunities are and will also be the ones that will have information on their community’s workforce, transportation, utilities, and quality of life; the items of greatest interest to foreign investors.
GWDC had even performed their own version of SelectChicago the year before in 2016. They first attended the US Department of Commerce event for FDI known as SelectUSA in Washington, D.C. At that event they made contact with groups of individuals from China who are interested in investing in the area. Then they scheduled a time for the individuals from China to visit. First, the GWDC showed them Chicago and its ammenities. Then they showed them Waukegan where the Chinese delegation was introduced to the Mayor of Waukegan and a chinese business that had been in operation in Waukegan. GWDC put together a promotional video to commemorate the occasion.
At the conclusion of their introduction about SelectChicago, the people at GWDC asked if I thought such a program would be of interest to the greater Chicagoland area (i.e. suburbs). I exclaimed positively with enthusiasm. In all my years of economic development I had never heard of such a thing as FDI and my ideas started to pour out. I thought of the “new dollars” of investment that could come into the area. I thought of all the communities and their numerous programs designed to learn about and reach out to their diverse communities. I thought about the impact of this would have on the public, which would allow for small communities to be able to work on an international scale, thus another way to put their tax dollars to work.
It was at this time that the GWDC appointed me Program Director of SelectChicago2018. Granted it was a Pro-Bono consulting gig, but it would be a great way for me to promote me, my consulting company, City Manager Insights, and grow my network. But I knew that I could not do this alone and like most leaders, I work best when I am in a team. So I contacted those individuals who I had previously expressed the most interest in this SelectChicago program which consisted of four economic development professional from reputable communities in Chicagoland. Later, two additional communities would join which created our six-member community steering committee, representing north, northwest, west, southwest, and south suburbs of Chicago, with two members of GWDC and me included on the committee. This steering committee was one of the best teams I have had the pleasure to work with in my career. They were all energized, motivated, and eager to learn. Some had extensive experience in FDI while others had zero experience (like me). But they all worked hard to achieve greatness.
While conducting bi-weekly meetings with the steering committee to plan our June 2018 event, we also recognized the importance of getting the word out to our municipal networks and educate them about FDI. We did this by presenting at local professional development meetings, conducting Foreign Direct Investment 101 and 201 seminars, and creating a weekly newsletter using Constant Contact.
One of the greatest achievements of SelectChicago is that we received special designation as a spin-off event of SelectUSA, the FDI conference hosted by the federal government.
SelectUSA is a U.S. government-wide program led by the U.S. Department of Commerce. Since its inception, SelectUSA has facilitated US$ 30.7 billion in investment, creating and/or retaining tens of thousands of U.S. jobs. Its mission is to facilitate job-creating business investment into the United States and raise awareness of the critical role that foreign direct investment (FDI) plays in the U.S. economy. With the SelectUSA designation we were able to not only attract more FDI prospects, but it also helped to legitimize our program for our regional audience.
I first attended SelectUSA last year representing SelectChicago with the GWDC. Now we attended proudly representing 25 communities that had joined SelectChicago since we started the program. I also had 17 meetings lined up with different individuals with investment interests in the region. I had meetings with people from Germany, Switzerland, Turkey, Ghana, Japan, China and others. Our booth was visited by even more countries. It was a whirlwind of an event this year as while I was working with the booth and meeting with investors Wednesday through Friday, I was then preparing for SelectChicago the following Monday!
Our event was a huge success. We have over 115 Chicagoland government, international, and local business owners, as well as chamber/trade/consul general representatives attended SelectChicago in June at the Westin-O’Hare in Rosemont, Illinois. The conference included several panels and speakers, showcase tours, a “Town Square,” and many networking opportunities. The showcase tours brought international representatives directly to the Chicago communities (suburbs) in order to see the sites that were available. We also worked with a local GIS firm, MGP Inc., to create an online investment portfolio, featuring over 150 development projects, so that investors could continue to see the projects after they depart. One of our greatest accomplishments is that we connected 25 communities with many international chambers of commerce and trade consulates in the area. The municipalities and these two international groups had not been made aware of each other on a level such as this and I foresee many opportunities in the future for this relationship to grow.
SelectChicago has been a journey in of itself, allowing me to continue to grow my network in both the public and private sector, create new networks in the international sector, all while sharpening my entrepreneurial, technological, and leadership skill sets.
So, what did I learn?
The rest of the world does not know the US like we do. To them, Chicago is a region, not a City.
There are many regional groups with different boundaries all working to help grow economic development in the Chicago region. The good news is that it provides many resources for investors. The downside is that they all do not share the same border and many have different interests, providing some challenges. Although nearly all of the groups we interacted with are eager to work together for a common goal.
Foreign investment economic development has no borders. Just as in local economic development, where retailers think in markets, not municipalities, in FDI, the investors think in very large areas. In SelectChicago we consider our region to be roughly 300 kilometers from O’Hare airport.
In FDI, development deals are not focused on incentives and tax rates as many economic development officials are used to at the local level. Foreign investors are looking at the long term and as such think about more macro ammenities: workforce, transportation, abundance of utilities (electricity, gas, water), and quality of life.
The Chicagoland as the greatest concentration of trade consulates in the United States. This is an untapped resource for municipalities.
Globalization is finally paying off for municipalities. Originally, it had been a major hindrance. Today, the US has the largest amount of FDI in the world. Municipalities can reap the benefits of globalization by participating in foreign direct investment. But in order to do that, municipalities must be willing to work together with other communities and celebrate each other’s FDI victories.
Not all FDI involves real estate development. There is a large number of M&A/J-V interests. The benefit of a foreign company acquiring or joining together with a domestic US company is that the foreign company accelerates their time-to-market much faster than if they were to build it on their own (i.e. overcoming such obstacles as learning local employment laws and converting from the metric system of measurement to the imperial system). I believe that with the help of SelectChicago municipalities are uniquely positioned to be the nexus of this marketplace and provide soft-landings for such companies.
When a municipality displays its demographic data on its website, it should display more than just the basic census data. It should dig deep to communicate its awareness and appreciate of different ethnic backgrounds. For example, instead of just indicating the number of people from Asia and their countries, the website should identify cultures and languages spoken.
Communities looking to invest in FDI, need to begin by determining which companies in their community are currently foreign-owned. The easiest way to do this is to go to the local library and look up the Dun & Bradstreet database. With this information the community will be able to make contact with the local firms and develop a relationship with them. It’s not uncommon for more than one company to have its origins from the same country, since people from the same country tend to enjoy doing business with each other. Therefore, municipalities can begin to craft their FDI strategy around attracting businesses from a specific country and become a funnel into the US for businesses of that country.
FDI is an industry onto itself. In every region there are numerous companies, independent consultants, accounting firms, legal firms, economic development organizations, cities, counties, states, and chambers of commerce, consulates, trade associations, and just about every other organization you can imagine, that are currently doing business in the FDI space. Most municipalities have a lot of catching up to do, but they can be successful only by pooling resources in a combined economic development effort.