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When President Kennedy challenged America in 1961 to land a man on the moon before that decade ended, he left his successors with a tough act to follow in the presidential legacy sweepstakes. Kennedy’s bold target raised the bar for national goal-setting to unprecedented, out-of-this world heights. NASA’s success in accomplishing its mission within the deadline was a transformative triumph of U.S. technological and industrial might.
Last week, President Obama established a new national goal–and he wants this one completed in half the time it took us to get to the moon. At SelectUSA’s first Investment Summit, held at the Marriott Wardman Park Hotel in Washington D.C., Obama gave the newly created national economic development initiative its marching orders: attract $1 trillion in new foreign direct investment to the United States during the next five years. Obama’s mission for SelectUSA isn’t as awe-inspiring as space travel, but it could have the same transformative effect in terms of economic impact. And the good news is we won’t have to build a Saturn V rocket from scratch to get there–the U.S. already has most of what it needs to reach the finish line.
That was the overriding message the president, a bevy of his Cabinet secretaries and the CEOs of several U.S. industry giants delivered at the booked-to-capacity Investment Summit, which featured dozens of state and local economic development agencies pitching hundreds of potential foreign investors, including a huge delegation from China.
Addressing the Summit, President Obama pledged an across-the-board effort by the federal government to back SelectUSA’s push for foreign investment, with the Commerce and State Departments working in tandem with the White House to coordinate the program. Obama has ordered U.S. embassies around the world, usually geared strictly toward promoting U.S. exports, to make increasing FDI a core economic priority.
“Officials at the highest levels, up to and including me, are going to do even more to make the case for investing in America,” the president said.
Obama said SelectUSA will provide research and analysis services to city, state and regional economic development agencies to help them attract foreign investors. The national initiative also will help coordinate workforce training programs.
U.S. Commerce Sec. Penny Pritzker, who hosted the Investment Summit, said SelectUSA will be a “one-stop shop” for foreign investors, eliminating red tape and facilitating contacts between investors and U.S. businesses. The 32 nations that account for about 90 of FDI will now be courted by “one team,” she said.
“There will be unprecedented coordination, and that’s not just an empty phrase,” Pritzker said. “For the first time ever there will be an organized effort led by ambassadors who will work with one team of State and Commerce officials. There will be one place to go to get answers to visa issues, regulatory issues, and state, local and federal issues.”
Pritzker also announced that SelectUSA is planning to exhibit at major overseas trade shows in Europe and Asia in coming months, adding that the initiative is willing to sponsor regional economic development conferences in the U.S. Treasury Secretary Jack Lew said government reviews of foreign investments would be limited to national security concerns. He pledged that these security reviews would not take more than three months to complete.
Speaker after speaker told the gathering that the essentials needed to spark a tsunami of foreign investment in America are now perfectly aligned as never before. The key ingredients for the impending FDI feast can be summed up in the “three E’s”–energy, education and equity–which, combined with the world’s largest consumer market give the U.S. a compelling case for attracting FDI.
The dramatic expansion of domestic oil and gas resources made possible by breakthroughs in horizontal drilling techniques has put the U.S. on track to achieve energy independence by the end of this decade. The widespread availability of low-cost natural gas has fueled a revival of American manufacturing, with tech giant Apple and automotive power Ford recently announcing they’re relocating overseas plants to the U.S.
“We have affordable and abundant energy,” Pritzker said. “The U.S. now imports less than half of the oil we consume and our jump in natural gas production in the last five years has produced a 60 percent decline in [energy] prices.” She added, “We have the wind at our back. The U.S. may be at its most competitive position of the past two decades. It’s a moment of opportunity.”
Larry Fink, CEO of BlackRock, the largest capital investment fund for owners of equities worldwide, told the Summit that quick action to stabilize the U.S. financial system after the global fiscal collapse of 2008 has made the U.S. a safe haven for foreign investors. “European banks are going through their third round of stress tests, something we did four years ago. Our banking system is stronger than ever,” he said.
Fink said low energy costs were a major factor in his firm’s recent decision to place a new global data center in Buffalo, NY instead of overseas. “Our cost is 3.5 cents per kilowatt, compared to 18 cents per kilowatt in Europe,” he noted.
Walmart U.S. CEO Bill Simon said the retail giant has committed to increase its U.S. purchases by $250 billion over the next 10 years. “The time to invest in the U.S. is now,” he said.
The huge advantage the U.S. traditionally has enjoyed in world-class institutions of higher education and innovative R&D were cited by several speakers as core assets that will fuel a surge in FDI. Andrew Liveris, chairman and CEO of Dow Chemical, said U.S. R&D resources are “unbeatable,” with 70 percent of manufacturing R&D taking place in the United States.
SelectUSA will have its work cut out for it in meeting Obama’s goal of $1 trillion in new foreign investments. FDI in the U.S. fell to $160 billion last year, down from a peak of $321 billion in 2000.