Direct Foreign Investment: A Wisconsin Perspective

Transcription

1 Direct Foreign Investment: A Wisconsin Perspective Wausau, WI September 27, 2011 Dr. David J. Ward CEO and Founder NorthStar Economics, Inc. September 12, 2006 DIRECT FOREIGN DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 1 1 Copyright 2011, 2006, NorthStar Economics, Inc. All rights reserved. 1

2 Presentation Outline I. Global Economic Overview II. Background on DFI US/WI III. The UW Task Force on International Economic Development IV. The DFI Opportunity Curve V. Questions & Discussions DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 2 2

3 The Global Economy World Population B U.S. Population M World Economy (GDP) 2010 $65.0T U.S. GDP 2010 $14.5T EU GDP 2010 $16.2T China GDP 2010 $ 6.0T DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 3 3

4 U.S. Share of Global GDP % % % US GDP has steadily risen from Higher growth rates in emerging countries have grown the global GDP pie and marketplace. DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 4 4

5 The Global Middle Class: Where the Markets Are Source: Brookings Size of the Global Middle Class 2011 Table 1: Size of the Middle Class, Regions (millions of people and global share) North America % % 322 7% Europe % % % Central & South America % 251 8% 313 6% Asia Pacific % 1,740 54% 3,228 66% Sub-Saharan Africa 32 2% 57 2% 107 2% Middle East & North Africa 105 6% 165 5% 234 5% World 1, % 3, % 4, % DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 5 5

6 Key Markets for World Middle Class Food protein meat, fish, dairy Feed China now has 700M pigs and has become a major buyer of US corn Fiber clothing, packaging, personal care products Fuel oil, gas, alternative fuels DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 6 6

7 US Economic Opportunity in The Global Economy Exports Another slide show in itself Direct Foreign Investment what we are talking about tonight DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 7 7

8 The US Economy is Global US Exports in 2010 US Imports in 2010 DFI in the US in 2008 DFI stock in the US in 2008 $1.28 T $1.91 T $ 325 B $ 2.1 T DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 8 8

9 The Wisconsin Economy is Global Exports in 2010 $19.8 B Foreign Firm Operations Major Foreign Investments by WI Firms Schneider Transport - China Manitowoc Corp. - China DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 9 9

10 US Direct Foreign Investment Time Period DFI Inflow DFI Outflow Net Inflow $42.2B $5.1 B +$37.1B $206.3B $329.2B -$ $2,950B $2,704B +$246B DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 10 10

11 US DFI Statistics Stock of DFI in US 2008 DFI in US $2.1Trillion $325Billion DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 111

12 Types of DFI in US Reinvestment of earnings of foreign owned business Acquisition of US assets land, buildings Invest and Build US Subsidiary Acquire US company or division DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 12 12

13 Fears and Concerns about DFI in the US Economy Foreign countries will steal our technology Foreign countries will influence our government and politics Foreign firms will control the economy Fears are highlighted by the Japanese real estate investment in US assets in the 1990s and current Chinese ownership of US debt DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 13 13

14 Foreign-Owned Operations Source: Wisconsin Department of Commerce Economic Assets

15 Foreign-Owned Operations Economic Assets 470 statewide 27 countries represented Operations are located in 51 of 72 (71%) Wisconsin counties Total employment is Source: Wisconsin Department of Commerce 60,000+ DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 15 15

16 Employment in Foreign-Owned Operations by Industry Economic Assets Retail Trade Wholesale Trade Other Manufacturing Services Transportation, Communications, Electric, Gas, & Sanitary Services Wholesale Trade Finance, Insurance, & Real Estate Manufacturing SIC Codes Source: Wisconsin Department of Commerce, SIC Codes DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 16 16

17 Origin of Foreign-Owned Operations in Wisconsin Source: Wisconsin Department of Commerce Economic Relationships

18 Examples of DFI in Wisconsin Alliance Laundry Systems $375M IPO turns into $450M DFI as Ontario Teachers Retirement buys the company Fincantieri acquires marine assets of Manitowoc Corp 2009 for $120M Seda International Packaging locates factory and North American HQ in Kenosha 2011 for $76M DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 18 18

19 Examples of DFI in Wisconsin Simonswerk Group sets up office and distribution center in Whitewater Decision Insight Information group selects New Berlin as its new HQ site Thomas Magnete GmbH to open manufacturing plant in Brookfield 2011 $3 M investment DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 19 19

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21 International Assets & Opportunities Scan Statewide Economic assets Human capital & culture Economic relationships University of Wisconsin System assets and relationships Growth opportunities

22 International Assets & Opportunities Scan Approach Initial high-level statewide scan and communication UW System assets and relationships Economic assets Internationally significant assets and economies statewide Human capital and culture Economic relationships Utilize New North as a Pilot Project Prepare compelling documentation of resources DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 222

23 International Assets & Opportunities Scan Purpose Take initial inventory of the UW System and State international expertise and assets Key questions What international relationships exist and where? What is the international expertise of the UW System and State? What are our globally significant assets? How do our assets and relationships align with emerging opportunities and growth regions? DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 23 23

24 Ethnic Heritage Source: The Atlas of Ethnic Diversity in Wisconsin, 1998 Human Capital & Culture

25 International Assets & Opportunities Scan Statewide Economic assets Human capital & culture Economic relationships University of Wisconsin System assets and relationships Growth opportunities

26 Wisconsin s Sister Cities/States & Trade Focus Source: Wisconsin Department of Commerce Economic Relationships

27 International Assets & Opportunities Scan Statewide Economic assets Human capital & culture Economic relationships University of Wisconsin System assets and relationships Growth opportunities

28 UW System Alumni Living Abroad Sources: UW Eau Claire, Green Bay, Madison, Milwaukee, Oshkosh, Platteville, and Stout UW System International Assets

29 UW System International Students Sources: UW Madison, Milwaukee, Stevens Point; UW System International Assets

30 UW System Students Study Abroad Destinations Sources: UW Madison, Milwaukee, La Crosse, Platteville, Whitewater; UW System International Assets

31 Where We Have the Greatest Existing Relationships & Focus Initial Synthesis Relationship Cultural Economic Countries Canada, Germany, Norway, France, United Kingdom Canada, China, Germany, Japan, Mexico Education University of Wisconsin System Students & Alumni Education University of Wisconsin System Faculty Canada, China & Hong Kong, India, and Taiwan To be analyzed DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 32 32

32 Key International Assets Initial Synthesis DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 333

33 International Assets & Opportunities Scan Statewide Economic assets Human capital & culture Economic relationships University of Wisconsin System assets and relationships Growth opportunities

34 Worldwide Top 30 GDP Source: World Bank, 2010 Growth Opportunities

35 Worldwide Top 30 GDP & Growth Rates ( ) Source: World Bank 2009 and 2010 Growth Opportunities

36 China UW & State Connections UW System UW-Madison China Initiative Babcock Institute / World Dairy Expo Chinese Champions Program UW-Eau Claire China Program UW-Platteville Confucius Institute UW System-wide Alumni branches Beijing, Hong Kong, Singapore, Taiwan Mandarin language instruction Study abroad / student exchange WARF (Wisconsin Alumni Research Foundation) WiSys Technology Foundation Private Sector Growth Opportunities Environmental Research & Technology Aquarius Systems Badger Meter Industry, Infrastructure, & Transportation Harley Davidson Oshkosh Trucks Johnson Controls Medical & Health Services TomoTherapy GE Medical Agriculture World Dairy Expo Ginseng Board of Wisconsin Business Associations Metro Milwaukee Association of Commerce China Council Madison International Trade Association New North (Green Bay / NE Wisconsin) DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 37 37

37 Some Key Issues and Questions Can Wisconsin globally compete and win more DFI? If so where is WI competitive advantage? What about arguments related to foreign control of our (US & WI) economy? Could the UW System play a role in building global contacts and attracting DFI? DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 38 38

38 Remember the Global Demands of the Global Middle Class Food Feed Fiber Fuel Will anyone be interested in the WI investment opportunity curve? Will we develop the global case for investing in Wisconsin? DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 39 39

39 Why a DFI Strategy for Wisconsin DFI investment creates jobs Fincantieri WI has a base of DFI to expand and grow 470+ firms and more choosing the state DFI often leads to exports Wisconsin is positioned to meet global middle class demand WI is often overlooked (fly over?) in VC and other domestic investment Much of the DFI creates jobs that match the skills of the unemployed in Wisconsin DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 40 40

40 Questions and Discussion DIRECT 7/30/2015 FOREIGN INVESTMENT: A WISCONSIN PERSPECTIVE 41 41

41 David J. Ward, Ph.D., President Phone: (608) Fax: (608) DIRECT 7/30/2015 FOREIGN 42 INVESTMENT: A WISCONSIN PERSPECTIVE 42 42