Editor’s note: This article was written by Amanda Shailendra, managing partner of The Pendleton Group, and is published as part of the firm’s annual sponsorship of Global Atlanta.
Nurturing strong business-to-business connections with the right partners in the right locations is the first step for any community looking to attract international trade and investment.
At The Pendleton Group, we see these business ties as the first “leg” of a community’s “three-legged stool” of international strategy. Along with government partnerships and educational exchanges, B2B connections are key to forming a holistic strategy for attracting international trade and investment.
It might seem obvious, but communities that capitalize on existing business relationships have a much greater chance of success attracting investment from abroad.
Business leaders currently living and working in a community may have links to potential partners in their sector – or even in unrelated sectors – in other parts of the world.
We encourage communities to grow their international investment strategies from personal, strategic relationships for lasting benefits.
Existing peer relationships
When we work with international companies that are considering opening operations in Georgia, we have always found it helpful to utilize existing peer relationships.
For example, when large corporations like Kia Motors are deciding where to locate their first U.S. manufacturing facility, they often already have sophisticated infrastructure and existing business ties to certain locations.
Small businesses, however, don’t necessarily have that type of infrastructure in place, so they are more reliant on personal relationships. Fortunately for many small- and medium-sized businesses seeking to do business with and in the United States, the State of Georgia has offices in multiple regions around the world that can help them navigate the U.S. market.
The first international company I worked with was a small German manufacturer providing a component part to the auto industry. The company needed a facility in the United States, but the process of making a major financial investment was overwhelming for the family-owned business. Fortunately, there were a few key factors that helped:
1) This company had for years been in communication with the State of Georgia’s European office. The head of this German company knew the Georgia team in Munich, so he felt comfortable asking questions and relying on the data and information they provided him.
2) It was also obvious that this business leader had called on many German business people he knew who had a facility in the U.S. to ask them for advice. They were able to tell him which banks, which law firms and which organizations would be most helpful for him when organizing his foreign investment plan.
3) Being able to trust local consultants in Georgia was also extremely important. Their expert advice, including from the State of Georgia’s office, was key for identifying the right location for the investment.
Especially for small businesses, being able to eliminate risk is a huge piece of their international investment decisions. For them, it’s less a process of selection than it is of elimination.
Eliminating some risk and concern through relationships they have with other companies and through local expert advice from state agencies and private consultants can help them find the most appropriate location for their investments.
That said, we have also seen where relying on personal or business relationships can go wrong.
Early in my career, when working for the state, our team lost a potential foreign investment to a town in Alabama because the investing company had an existing business relationship in that town. Unfortunately, the company did not stay open very long.
They found that the community was not the right fit; it was too small, and they couldn’t staff their labor needs — plus the cultural differences were too great.
It made sense on paper for the company to choose that town because they had an existing relationship there, but in the end, all of the factors did not add up to sustain a lasting investment.
Building new relationships
Connecting incoming international business leaders to peers in their new community is extremely important for a smooth transition and for forming lasting partnerships.
Working on the Mercedes-Benz USA headquarters relocation from New Jersey to Georgia, our team spent a lot of time making sure the company’s leaders were exposed to other Fortune 500 executives already in Atlanta.
With the Metro Atlanta Chamber of Commerce, we hosted a dinner for 8-10 people from entities in Atlanta, including Delta Air Lines Inc., Children’s Healthcare of Atlanta and other prominent Atlanta organizations to introduce them to the Mercedes executives.
It is important that newcomers get to know other business leaders in the community because these are going to be their peers, their fellow chamber of commerce members and those with whom they will work to address community issues.
For Mercedes, this was a unique idea that helped cement their relocation.
The State of Georgia does this same thing during trade missions; they invite business leaders from the community to meet the potential newcomers – because peer relationships are so vital.
Location, location, location
A host location’s logistical infrastructure and culture is extremely important for companies making foreign investment decisions.
In the Mercedes example, the company was making a domestic transition, but it was a major global company with many of its executives traveling back and forth to Germany. Hartsfield-Jackson Atlanta International Airport was, thus, a key factor in the decision.
Access to the airport and ease of international travel in general is a consideration for international businesses locating anywhere in the Southeast.
Companies must also determine whether the new community is a place that executives and their families will feel comfortable. Are there business chambers they can plug into? Are there appropriate places of worship? Do the schools have international baccalaureate programs? Are there desired types of cuisine? And, importantly, are there other foreigners already living there, or are the locals open to people from different cultures?
Setting up your strategy
At Pendleton Consulting Group, focusing on these relationships is one of the first actions we advise our clients take when building an international economic development strategy.
Ultimately, communities must learn how to highlight the features that make them unique and attractive to international investment.
In any instance, it’s all about relationships. Whether local, domestic, national or international, economic development and business development so often relies on building, nurturing and cultivating strong ties between people.
Contact us at Pendleton to create a unique strategy that can turn your relationships into investment opportunities.