United States – The Revival of a Future Manufacturing Powerhouse

United States – The Revival of a Future Manufacturing Powerhouse

It is now two years ago when we successfully launched our location benchmarking tool LocationSelector at a number of events and institutions around the world. Our audience largely consisted of corporate senior management and economic developers. During our presentation we presented the competitiveness for Foreign Direct Investment (FDI) of emerging markets versus Europe and North America. The results were not very surprising, with the usual suspects and some new hotspots in South East Asia and some in Sub-Saharan Africa. However, as a young innovative strategic advisory firm we challenged the established view by posing that the United States could be re-invented by investors as a favorable location for manufacturing processes as well as some outsourcing activities. Currently, we increasingly see our pioneering view become reality.

Since then numerous corporate executives asked our advisors “whether their companies were missing out on any competitive opportunities to locate their business activities”. In most cases we responded: “perhaps the solution to what you are looking for is close to home than you think or may or may perceive”. The United States has a well educated workforce, a large number of the best universities and business schools in the world, an excellent infrastructure for IT, a dynamic entrepreneurial economy, attractive grants and (tax) incentive packages at state and federal level (please see our ICAincentives deal database), is host to some of the most promising new companies that dominate the international landscape of IT and social media, a lot of experience in manufacturing, good infrastructure and given the exchange rate of the US dollar a very cost competitive business environment. Labor costs in some US States are becoming very competitive versus those in some emerging markets, especially if we filter productivity into the equation. I am sure the above unique selling points for the United States can be strongly emphasized by the recently launched national IPA of the United States Select USA, in which Invest America will be incorporated and integrated in the investment promotion strategies of many US States.

This is the first of a series of FDI Blogs on the competitiveness of the US. The FDI Blogs that will be posted over the next two months will cover some of our research results on the same topic. The overall research project will be presented at the annual IEDC 2011 event in Charlotte, North Carolina. Topics that will be addressed are: how competitive is the United States really? Benchmarking the FDI competitiveness of the United States versus Emerging Markets. What drives this competitiveness? Incentive packages supporting the revival.

I encourage you to discuss and challenge the views and analyses that we will publish. You can follow us on our corporate FDI BlogTwitter FDIexecutive and LinkedInGroup FDIexecutive as well as our upcoming webinar organized by our US strategic partner Atlas Advertising.

Dr. Douglas van den Berghe

CEO Investment Consulting Associates – ICA