CREC Project News and Updates

Foreign Direct Investment and Export Trade Promotion: Federal-State Economic Development Collaborations

December 9, 2015

Topic Overview

Foreign direct investment (FDI) represents the recruitment of a new company from outside the U.S., and it has long been an important policy priority for states. FDI is important for economic growth and well-being because it provides jobs, fuels innovation, and creates long term economic relationships between the U.S. and its trading partners. The United States is home to the largest amount of FDI in the world. This level of investment by U.S. affiliates of majority foreign-owned firms supports more than 5.7 million jobs across the country.

An alternative way to grow the economy and build a global presence is through exports of goods and services by existing U.S. firms. U.S. exports to foreign markets set a record in 2014, reaching $2.35 trillion.  U.S. exports are up more than $760 billion since 2009. Exports of U.S. goods and services to foreign countries provide tremendous economic benefits as well. Export trade promotion allows both the federal and state governments to enhance trade opportunities in foreign nations.

  • Federal Role & Priorities

The Federal government has played a very specific role for many years focused on promoting exports. Business recruitment and relocation efforts were not seen as a federal role until recently. Through the U.S. Export Assistance Centers and the foreign consulates, companies could access market intelligence, and states tapped these services to support trade missions and special events such as trade shows. The International Trade Administration (ITA), the federal agency involved in promoting U.S. exports has an extensive network of technical assistance providers through its Commercial Service. That network provides export and industry specialists in more than 100 U.S. cities and over 80 countries. The support includes counseling and a variety of products or services designed to help small and mid-sized business export.

ITA worked with industry groups and states through the Market Development Cooperator Program (MDCP). The program provides up to $300,000 for foreign market development projects. Each year, ITA makes several matching grant awards to industry groups to pursue projects that help U.S. companies export and create jobs.

  • Major Federal Programs & Activities

In 2010, ITA created its Strategic Partnership Program designed to leverage the resources of states as well as trade associations, chambers of commerce, local governments and private companies to work with U.S. businesses to take full advantage of global business opportunities. The goal is to build capacity beyond ITA to help U.S. companies create jobs from export sales.

For many years, foreign direct investment efforts were the exclusive purview of state economic development agencies. The U.S. government essentially did not participate in these activities. With Executive Order 13577 in June 2011, President Obama created the SelectUSA Initiative to coordinate U.S. trade and investment because the Administration pointed out that U.S. states and cities were competing against foreign national governments for business investment and felt that the U.S. needed SelectUSA as a centralized program to market the United States as a business/investment location, provide a one-stop messaging center, and help businesses address hurdles. The SelectUSA initiative also reports statistics on foreign direct investment (FDI) in the United States, along with separate fact sheets on the impact of FDI on jobs, exports, and innovation within each state (selectusa.commerce.gov/fact-sheets.html).

Supplementing ITA’s efforts have been investments by the Small Business Administration. SBA created the State Trade and Export Promotion (STEP) Grant Initiative in 2010. This pilot program offers matching-fund awards to states to assist small businesses enter and succeed in the international marketplace. The SBA awarded $17.4 million in FY 2015 to eligible small businesses.

  • State Role                       

SelectUSA acts as a marketing tool for U.S. business and a conduit through which states can leverage international investments. The initiative provides services to states and localities, including access to referrals to state programs as developed by the Council for Community and Economic Research (http://selectusa.stateincentives.org). SBA’s STEP Grant program is managed through the SBA Office of International Trade, but the states can design programs to meet their own specific needs. States are required to match the federal funding with 25% (35% for high export volume states) of the approved award monies.

About This Project

DDAA Rural Broadband and EDA CARES Act Funding Peer Best Practices Research Report
Start Date: Oct 2020 — End Date: May 2021

The Development District Association of Appalachia contracted with CREC to gain insights about local development district efforts to improve their respective regions – specifically, to better understand local development district uses of CARES funding as well as to gain insights on best practices in promoting rural broadband.  The project will provide DDAA members with best […]

Early Childhood Education Pre-Apprenticeship Model Project
Start Date: Jan 2020 — End Date: Dec 2020

This report on the Early Childhood Education Pre-Apprenticeship Model was prepared for the Philadelphia Hospital and Health Care District 1199C Training and Upgrading Fund by the Center for Regional Economic Competitiveness and Center for Urban and Regional Studies at UNC-Chapel Hill with support from the Pennsylvania Key and the Pennsylvania Office of Child Development & […]

Community Indicators Consortium
Start Date: Jan 2021 — End Date: Dec 2021

The Community Indicators Consortium (CIC) is a global network that supports efforts to use community data to improve quality of life. CIC provides resources and tools to help communities and practitioners advance the practice and effective use of community indicators. The includes increasing the use of indicators for monitoring community conditions and advancing sustainability, promoting […]

Texas Research Differentiation Report, 2021
Start Date: Jan 2021 — End Date: Jun 2021

CREC is working with the Austin Technology Incubator, Texas Foundation for Innovative Communities, The Academy of Medicine, Engineering & Science of Texas (TAMEST), and University of Texas at Austin to identify and document the state’s advantages in academic and applied research, including promising late-stage research relative to global innovation leaders. With this information, the project […]

Delta Workforce Program
Start Date: Jan 2021 — End Date: Oct 2021

The Delta Regional Authority’s Delta Workforce Program faces the dual challenge of developing new talent for the region’s leading industries while also supporting the retraining and reskilling of displaced and underutilized workers in distressed communities. With this Labor Market and Workforce Report, CREC aims to advance the Program’s goals of building a more prosperous Delta […]

Strategy Guidance Note on the Promotion of Public Sector Data Sharing
Start Date: Dec 2020 — End Date: Jan 2021

CREC developed a Strategy Guidance Note and related global case studies on data sharing as a principle of sound policymaking which can contribute to strengthening the effectiveness of institutions. The United Nations Committee of Experts on Public Administration (CEPA) has developed a set of principles of effective governance for sustainable development to provide practical, expert […]

Developing a Community Empowerment Scorecard
Start Date: Apr 2020 — End Date: Mar 2021

CREC is assisting the Colorado Workforce Development Council (CWDC) in promoting economic mobility among the individuals that are receiving employment assistance.  CREC is developing a community empowerment scorecard to help CWDC monitor the various factors that contribute to jobseeker mobility.  The scorecard will focus on examining career pathways and partnerships in the retail sector that […]

Assisting College Leaders In Using Labor Market Data to Drive Education and Training Curriculum
Start Date: Feb 2020 — End Date: Oct 2020

CREC worked with FTCC leadership and staff to translate data about labor market trends into more demand-driven curriculum plans that recognize key labor market opportunities as an important criterion in allocating limited college resources. Through this effort, CREC reviewed how FTCC used data in its curriculum planning process and facilitated working sessions with the Board, senior staff, […]

Counting U.S. Secondary and Postsecondary Credentials, Phase III
Start Date: Jan 2020 — End Date: Nov 2020

CREC proposed to continue its work in counting credentials, but we also sought to generate a more thorough understanding of the accessibility of credentials for Americans by counting the number of credentials by state, examining the types of credentials offered, and better understanding what organizations offer these credentials.  In addition, CREC conducted preliminary research on […]

Developing Regional Ecosystems to Support Recovery-to-Work
Start Date: Nov 2019 — End Date: Apr 2021

CREC is providing technical assistance and generating lessons learned from the experience in local development districts (LDDs) in how to help businesses and individuals succeed in their recovery from substance abuse disorder.  Providing staff support to the Development District Association of Appalachia (DDAA), CREC is helping four LDDs through a year-long process of articulating the […]

About the Client

Appalachian Regional Commission

The Appalachian Regional Commission (ARC) is a regional economic development agency that represents a partnership of federal, state, and local government. Established by an act of Congress in 1965, ARC is composed of the governors of the 13 Appalachian states and a federal co-chair, who is appointed by the president. Local participation is provided through multi-county local development districts.