Investing in the United States Tazeem Pasha

Investing in the United States Tazeem Pasha Embassy of Spain and ICEX Seminar on Financing Opportunities forspanish Companies and Projects in the United States By Tazeem Pasha Monday, 19 March 2012 Washington, DC SelectUSA.gov

About SelectUSA SelectUSA was created by the Executive Order of the President of the United States in June 2011. The Executive Order outlines: 1. The Administration s policy on business investment 2. The establishment and functions of the SelectUSA initiative SelectUSA.gov 2

SelectUSA.gov 3

U.S. FDI Trends Top 10 FDI Stock Positions, 2010 10% $238.2b 21% $497.5b 11% $257.2b 9% $209b 11% $263.2b 5% $118b 3% $61.6b 3% $61.5b 2% $52.2b Rank 2010 FDI Position in the United States Billion USD 1 United Kingdom 497.5 2 Japan 263.2 3 Germany 257.2 4 Canada 238.1 5 France 209.6 6 Netherlands 118 7 Ireland 61.7 8 Switzerland 61.6 9 Australia 52.9 10 Belgium 52.2 2% $52.8b Source: Department of Commerce, Bureau of Economic Analysis FDI by Ultimate Beneficiary Owner

U.S. FDI Trends Top 10 FDI Growth Markets, 2010 33% $52.2b 38% $61.6b 35% $33.9b Fastest Growing Sources of FDI in the United States, by Compound Annual Growth Rate (2005-2010) Rank Country Growth Rate Billion USD 1 China 53% 5.8 2 Singapore 44% 21.3 3 Ireland 38% 61.7 4 New Zealand 37.8% 3.3 5 U.A.E. 37% 2.6 6 Spain 36.9% 44.2 7 Mexico 35% 5.5 8 India 34% 2.3 9 Belgium 33% 2.4 10 Brazil 26% 3.8 36% $44.2b 26% $15.4b 37% $13.3b 53% $5.8b 34% $7.1b 44% $21.2b 37% $3.3b Note: Numbers denote 5 year compound annual growth rate (2005-2010) of the stock FDI position and the total stock of FDI in the United States Source: Department of Commerce, Bureau of Economic Analysis FDI by Ultimate Beneficiary Owner

U.S. FDI Trends Industry breakdown of total U.S. FDI stock ($2.3 trillion) Source: Bureau of Economic Analysis

FDI and the U.S. Economy.gov Top 10 FDI Growth Sectors in the United States (Compound annual growth rate in FDI position between 2005 and 2010 and dollars in Primary and Fabricated Metals 2010 on a historical cost basis) 13.54% Total Stock in 2010 $51.266 billion Computers and Electronic Products Electrical equipment, appliances, and components Machinery Finance and Insurance Other Manufacturing Professional, Scientific, and Technical Services Information Other Industries Chemicals 12.64% 11.7% 11.32% 10.7% 10.49% 9% 8.82% 7.26% 7.22% Source: Bureau of Economic Analysis $56.76 billion $19.296 billion $79.388 billion $356.781 billion $231.264 billion $79.258 billion $156.518 billion $470.767 billion $175.394 billion

U.S. FDI Trends European Direct Investment the United States Luxembourg 8% Ireland 2% Sweden 3% FDI Positions by Stock Spain 3% Belgium 2% Other 5% Italy 1% United Kingdom 27% 60% 50% 40% 30% Average Annual Growth Rate of FDI Positions by Stock Total: $1.4 Trillion Switzerland 11% France 11% Germany 13% Netherlands 14% 20% 10% 0% Source: Department of Commerce, Bureau of Economic Analysis FDI by Ultimate Beneficiary Owner SelectUSA.gov 8

FDI from Spain to the United States 6 th $44.2 billion 69,500 $77.0 million $2.8 billion $2.7 billion Spain is the sixth fastest growing source of FDI in the U.S. The total stock of FDI from Spain to the U.S. in 2010, the 11 th largest in the United States Employment by U.S. affiliates of Spanish Firms in 2009 R&D expenditures by U.S. affiliates of Spanish firms in 2009 Capital Investments by U.S. affiliates of Spanish Firms in 2009 Size of FDI Flows from Spain into the U.S. in 2010 (down from $4.8 billion in 2009) $1.1 billion Source: Bureau of Economic Analysis Value of exports by U.S. subsidiaries of Spanish firms in 2009

FDI from Spain to the United States Fastest Growing Sources of FDI in the United States, by Compound Annual Growth Rate (2005-2010) Rank Country Growth Rate Billion USD 1 China 53% 5.8 2 Singapore 44% 21.3 3 Ireland 38% 61.7 4 New Zealand 37.8% 3.3 5 U.A.E. 37% 2.6 6 Spain 36.9% 44.2 7 Mexico 35% 5.5 8 India 34% 2.3 9 Belgium 33% 2.4 10 Brazil 26% 3.8 Source: Bureau of Economic Analysis Source: fdimarkets.com

The U.S. Business Climate #1 IESE Business School s 2011 Venture Capital and Private Equity Index France: #17 Germany: #16 UK: #3 #4 World Bank s Ease of Doing Business 2012 ranking France: #29 Germany: #19 UK: #7 #4 AT Kearney s 2012 FDI Confidence Index France: # 17 Germany: #5 UK: #8 #5 World Economic Forum s 2011-2012 Global Competitiveness rankings France: #18 Germany: #6 UK: #10 11

The U.S. Business Climate Strategic Market & FTAs Population of U.S. and FTAs is 695 million; U.S. 42% of Global Consumer Goods Market 1 Center for Global Innovation and Entrepreneurship U.S. Responsible for 36% of Total World R&D Expenditures (EU-27 accounted for 24%); Average 558,000 new businesses created per month in 2009 2 Strong Intellectual Property Right Protections 50.1%of the Patents Granted in 2009 by the U.S. Patent Office Originated from a Foreign Country 3 A Leader in Higher Education 15 of the top 20 universities in the World (Europe has 4 of the top 20) 4 Productive Workforce U.S. labor productivity grew 2.3% in 2009 (France: -1%, Germany: -2.3%, UK: -2.5%) 5 Open to People, Cultures, and Ideas U.S. has more Irish than Ireland, Filipinos than Manila, Chinese than Hangzhou* and Poles than Warsaw 6 1. Office of the U.S. Trade Representative; Central Intelligence Agency The World Factbook; and Credit Suisse survey; 2 National Science Foundation Science and Engineering Indicators 2010; Kauffman Index of Entrepreneurial Activity 1996-2009; 3. U.S. Patent and Trademark Office; 4. The Times Higher Education Report 2010-2011 (U.K.); 5. OECD Labor Productivity Statistics; 6. U.S. Census Bureau, *Hangzhou city proper 12

Strategic Market & FTAs Source: http://blog.iese.edu/vcpeindex/files/2011/05/iese_vcpe_index_annual_2011.pdf

Strategic Market & FTAs The United States has Implemented or Entered into Force 20 Free Trade Agreements With a Combined Population of Over 695 Million Consumers and a Combined GDP of $7 Trillion Dollars Source: USTR; CIA Factbook Free Trade Agreement Bilateral Investment Treaty Both

Innovation and Entrepreneurship More Nobel prize winners completed their winning research in the U.S. than in all other countries combined. In 2009... Other U.S. 41.2% 41.2% of all R&D in developed countries took place in the United States The U.S. received more patent applications (456,106) than any other country, more than half were from non-residents. China: 314,573 Euro. Patent Office: 134,580 Japan: 348,596 U.S. researchers published over 270,000 articles, more than anywhere else in the world. Sources: OECD, www.nobelprize.org, WIPO

Entrepreneurship and Opportunities The U.S. ranks 5 th in entrepreneurship and opportunities. A strong entrepreneurial climate in which citizens can pursue new ideas and opportunities for improving their lives can lead to higher levels of income and well-being. Source: The 2011 Legatum Prosperity Index

U.S. Ranks #1 in Global Talent Index Source: Heidrick & Struggles and the Economist Intelligence Unit

Resources: Business Investment In the United States Sample Resources for Federal Assistance: SelectUSA.gov-SelectUSA Database of Federal Programs and Incentives for Business Grants.gov a Government-wide database of grant programs GSA.gov The U.S. General Services Administration (GSA) procures services on behalf of the U.S. Government SBA.gov The Small Business Administration (SBA) offers a Loans and Grants Search Tool for Federal assistance programs for SMEs. SelectUSA.gov 18

Resources: Business Investment In the United States Sample Resources for State and Local Assistance - SelectUSA.gov-SelectUSA Interactive Map to Economic Development Organizations and Contacts for all U.S. States and Territories - Business.gov/States -Small Business Administration (SBA) guide to starting and registering a business, public finance, and other information - State and Local Economic Development Organizations SelectUSA.gov 19

Resources: Business Investment In the United States Sample Non-Government Resources for Information Free Publications KPMG Study: 2012 Competitive Alternatives (competitivealternatives.com) Location Directory on Business Facilities Magazine (businessfacilities.com) Site Selection Magazine 2010 Guide to State Incentives (siteselection.com) Area Development Magazine (areadevelopmentonline.com) Subscriptions Consulting Services Other Resources SelectUSA.gov 20

SelectUSA Can Help Our mission is to encourage, facilitate, and accelerate businessinvestment to create jobs, spur economic growth, and promote American competitiveness Geographically neutral in the United States Engage in international and domestic business investment What we do: 1. Facilitate Business Inquiries 2. Act as Ombudsman and Advocate 3. Connect Investors with State/Local EDOs and Provide Guidance to EDOs 4. Conduct Investor Outreach and Educate Investors 5. Lead and Coordinate an Interagency Working Group SelectUSA.gov 21

SelectUSA Services: Information Clearinghouse SelectUSA provides actionable information to foreign firms to help them Incorporate a business in the U.S. Understand basic U.S. tax and legal concepts Learn about incentives available to businesses in the U.S. Connect with U.S. state, city, or regional economic development offices to learn about investment opportunities Apply for a business-related visa Foreign investors can communicate with SelectUSA by phone or email in Washington, DC, or meet with members of the U.S. Foreign Commercial Service around the world.

SelectUSA Services: Ombudsman Assistance

SelectUSA Services: Ombudsman Assistance SelectUSA works across the federal government on a case-bycase basis to: Address foreign investor concerns and issues Connect with a federal agency/ office to seek insight into a specific case Offer direct communication between the relevant federal agency and the client Identify federal regulations or processes to U.S. policy makers, that may negatively impact the U.S. business climate The SelectUSA Ombudsman function is considered business sensitive and administered strictly by the SelectUSA HQ: SelectUSA does not share company information SelectUSA may report on the types of federal regulations, countries, industry sectors and other aggregate information about cases to determine the efficacy of its ombudsman function

My Administration is committed to ensuring that the United States continues to be the most attractive place for businesses to locate, invest, grow, and create jobs. We encourage and support business investment from sources both at home and abroad. - President Barack Obama, June 20, 2011 Source: The White House Press Office, Statement by the President on United States Commitment to Open Investment Policy www.whitehouse.gov SelectUSA.gov 25

Thank You Tazeem Pasha SelectUSA U.S. Department of Commerce Washington, DC Tel: 202-482-0648 SelectUSA.gov tpasha@doc.gov 26