Atlanta’s competitive advantages for attracting foreign direct investment, especially Hartsfield-Jackson Atlanta International Airport, have been evident for years. But the London-based fDi Magazine, which is published by a division of the Financial Times, also gives Charlotte and Greenville in North Carolina high marks for their abilities to attract foreign investment.
The magazine ranked the North Carolina cities among the top five cities in the Western Hemisphere in their respective population categories for their strategies to attract foreign-based companies. Atlanta ranked 7th in its category for FDI strategy.
As the Southeast generally has been a magnet for investment overseas, the study underscores the competitiveness Atlanta and Georgia face from surrounding states.
“Charlotte has always been a competitor,” Jorge Fernandez, vice president of global commerce for the Metro Atlanta Chamber, told GlobalAtlanta.
“But I would not say it is outcompeting Atlanta. It’s like comparing apples and oranges,” he said, noting that the biggest challenge in marketing Atlanta is that it must compete with the country’s largest “gateway” cities like New York, Los Angeles, Boston, Chicago and Miami for international investment. “Charlotte is not in the same category.”
Still, smaller cities like Charlotte and Greenville are increasingly attracting foreign investment. The 16-county Charlotte region – one of seven economic regional partnerships throughout the North Carolina – is already home to some 850 international companies and is becoming a magnet in the Southeast for foreign firms, according to David Swenson, senior vice president of economic development services for the Charlotte Regional Partnership, a public-private economic development organization.
One of the reasons Charlotte has done so well in luring international investment to the region has been the creation of the Charlotte International Cabinet, said its program director Alexis Gordon. A merger of the Mayor’s International Cabinet and Charlotte Sister Cities, the cabinet promotes Charlotte as an investment location and fosters international relationships, though it focuses on “retention more so than recruitment,” Ms. Gordon said.
“We work with foreign-owned companies once they are here. We don’t recruit as much [as other agencies]. But we keep an eye on different international organizations in town, from advocacy to business to arts and culture, so we have a pulse on what’s going on. And we can help raise visibility for international communities.”
Ms. Gordon said that the international cabinet concept is a good model for other cities to copy to help them retain, and thus attract, further international investment.
She added that she believes the cabinet’s work as a liaison between international companies and the local community has contributed to Charlotte’s high ranking on the fDi Magazine report because it has made Charlotte a friendlier place for international employees.
She also said that international companies settling in Charlotte previously did not want to be known as “foreign-owned,” but the Charlotte community is now very welcoming to foreign-owned businesses, in part because of the relationships the cabinet has fostered between those companies and locals. “It’s all about relationships and people. International companies won’t come here if their people aren’t happy.”
The cabinet encourages international companies to endear themselves to the local community by engaging in philanthropic activities, which is something that they would not necessarily do, Ms. Gordon added.
The group hosts a philanthropy awards ceremony for foreign-owned companies each year. Incidentally, Norberto Sanchez, chairman and CEO of Norsan Group Inc. that owns multiple Hispanic restaurants and food services companies in the Atlanta area and is vice-chairman of the Latin American Chamber of Commerce of Georgia, was presented with an award this year. Winners of the awards included Sweden-based Husqvarna AB, German company Pfaff Molds LP and Coats North America from the United Kingdom.
Ms. Gordon said that being a nonprofit advisory board to city and not a city department has advantages. “Our model works pretty well because we are able to keep elected officials involved in the needs of the international business community, but we are not confined by city bureaucracy. We can raise funds on our own for our own projects.”
She added this connection between private and public keeps the cabinet’s activities transparent.
Ms. Gordon sees the international cabinet model as a trend among cities that are looking for ways to be more “full-service” when it comes to international investment. “There are lots of opportunities to attract investment, not just giving tax breaks,” she said. She mentioned the recently inaugurated Greater Savannah International Alliance as being modeled after the Charlotte International Cabinet, as well as Austin, Texas, and Portland, Ore., as having similar organizations.
While the North Carolina Eastern Region does not have an international cabinet, it is also is a contender vying for international investment in the Southeast, having an extensive history of investment by foreign firms. The fDi study rated Greenville, N.C., located in that region, as the No. 4 “micro-city of the future” among cities with populations less than 100,000, as well as the micro-city with the fifth-best FDI strategy.
The eastern region currently hosts 46 foreign-based companies hailing from countries such as Belgium, Korea and Mexico, but those 46 attract attention from other potential foreign investors, according to Kelly Andrews, associate director of the Pitt County Development Commission. The commission is the economic development agency for the Greenville area, which is the hub of the 13-county region.
“We definitely use success stories to recruit, and our existing industry contacts help us create relationships so that manufacturers here can attract [foreign-based] suppliers,” Ms. Andrews told GlobalAtlanta. She noted that Pitt County, where Greenville is located, is home to a number of international companies’ headquarters, including Netherlands-based DSM Pharmaceuticals Inc.
Foreign firms operating in the Southeast tend to cluster around specific manufacturers or industries, said Robert West, current chairman of the Atlanta-based Brazilian-American Chamber of Commerce of the Southeast and partner in international business law firm Wasserman West LLC.
Mr. West was based for several years in Winston-Salem, N.C., several years ago as an attorney with Womble Carlyle Sandridge & Rice PLLC. North Carolina cities, including Charlotte and Greenville, have the advantage of being located near prominent auto manufacturers that attract additional foreign suppliers, he said.
“North Carolina has “at least five very interesting cities” for international investors, he added, listing Chapel Hill, Charlotte, Durham, High Point, Raleigh and Winston-Salem.
International investors in the Charlotte region hail from across the globe, such as Neutrik USA Inc., a Liechtenstein-based manufacturer of audio, video and data connectors that announced a distribution hub and headquarters in the Charlotte area this year.
Mitsubishi Nuclear Energy Systems, a U.S. subsidiary of Japan-based Mitsubishi Heavy Industries Ltd., announced it will locate an $4.1 million engineering center in Charlotte. Stockholm, Sweden-based AB Electrolux’s U.S. subsidiary, Electrolux Home Products Inc., plans to consolidate positions from U.S. locations to Charlotte, and Austria-based Steinbauer Tuning Technologies Corp. has moved its U.S. subsidiary from Chicago to Charlotte.
German firms comprise the largest foreign national group in the Charlotte region, with more than 190. The German support network, which includes the North Carolina chapter of the Atlanta-based German-American Chamber of Commerce of the Southern United States, is strong in the 16-county Charlotte region, according to Mr. Swenson.
German Consul General in Atlanta Lutz Goergens and representatives from the Atlanta office of the chamber of commerce, were recently in Charlotte to meet with a business delegation visiting from Germany, he mentioned.
He added that having a German church, German school, German honorary consulate and direct flights from Charlotte to Germany helps draw German companies to the region and keep them there. Siemens Energy, for example, announced in 2010 an expansion of its facility in Charlotte that increased employment from 800 to 1,800.
The Greenville area also has a concentration of German companies, but Brazilian investment is a current target growth area, according to Ms. Andrews.
The Pitt County Development Commission participated in a business mission to Brazil last year to promote the region as an investment location. One Brazilian company, Ioto USA LLC, is currently operating in Pitt County, and several local companies are providing services to Brazil, she noted. The Brazilian-American chamber in Atlanta helped connect Ms. Andrews’ organization with some North Carolina chamber members to discuss Brazilian trade issues, she said.
Erich Schmid, who is helping to operate the North Carolina chapter of the chamber, told GlobalAtlanta that Brazilian companies are increasingly locating in that state, although the economic downturn has hurt investment over the past several years.
Still, Brazilian Consul General Adalnio Ganem, who opened the Brazilian Consulate General in Atlanta in 2008, encouraged Brazilian Chamber President Lucia Jennings to open chapters of the chamber in other southeastern states, including North Carolina.
There are six Brazilian companies in the Charlotte region, including auto parts supplier Sabo USA Inc., where Reinaldo Panico Peres, co-organizer of the Brazilian chamber’s North Carolina chapter, is executive vice president. He and Mr. Schmid are hoping to drum up more interest for North Carolina companies to do business with Brazil and for Brazilian companies to invest in the region.
Brazilian companies are opening operations in North Carolina and Georgia because Brazil’s economy is currently very strong, and those Southeastern states have been “particularly proactive,” Mr. West said.
He reiterated, however, that Atlanta cannot be compared with Charlotte or Greenville because “the cities are in different growth stages. Atlanta is just much, much bigger and much more advanced,” with its extensive consular system, customs facilities, research laboratories and the busiest airport in the world, he said.
But international companies might choose Charlotte or Greenville over Atlanta if the incentive package, utilities grid or other factors, including the existing industry cluster, were a good fit, Mr. West said.
“There are a huge number of foreign companies we’ve never heard of surrounding the auto industry, for example, that are going to small towns like Lincolnton, N.C.” Some companies find a specific adviser who guides them to invest in a certain location, and then they bring other companies with them, he added. “Each foreign direct investment case is individual, but all of the Southeast is a terrific target.”
The American Cities of the Future 2011/12 report ranked 405 cities in the Americas according to their economic potential, cost effectiveness, human resources, quality of life, infrastructure, business friendliness and foreign direct investment promotion strategy.
Atlanta ranked No. 7 in foreign-investment strategy and No. 5 overall among major cities. Charlotte ranked No. 2 in FDI strategy and No. 3 overall among large cities with populations of 250,000-750,000. Greenville, N.C., ranked No. 4 overall and No. 5 in FDI strategy among micro-cities of less than 100,000.
The fDi Magazine study’s rankings were based on information provided by the participating cities, and judging was done by an independent panel.
Houston was the top-ranked major city for FDI strategy; Victoria, British Columbia, was the No. 1 large city for FDI; Huntsville, Ala., won the top slot among small cities’ FDI strategies, and Fredericton, New Brunswick, was the No. 1 micro-city for FDI promotion. Not to be confused with Greenville, N.C., Greenville, S.C., was listed above Greenville, N.C., No.3 versus No. 4, in the micro-city category.
Criteria for FDI promotion strategy rankings included cities’ staff training programs and the number of staff dedicated to promoting inward investment, current FDI initiatives, availability of information on high-growth sectors’ inward investment potential, incentives for investors, infrastructure and planning projects, and the city’s vision for achieving its full FDI potential and becoming a “city of the future.”
For more information go to www.charlotteusa.com; www.locateincarolina.com; Alexis Gordon, Charlotte International Cabinet, 704.336.2174, http://charmeck.org/city/charlotte/; Jorge Fernandez: 404.880.9000, firstname.lastname@example.org; Robert West: 404.202.9808, email@example.com; David Swenson, Charlotte Regional Partnership: 704 347-8942, firstname.lastname@example.org; Kelly Andrews, Pitt County-Greenville Development Commission: 252 758-1989, email@example.com