PLATTSBURGH — The ability to attract foreign direct investment can be crucial to a region’s economic success, and Clinton County has a number of factors in its favor.
That was the message from CAI Global Group Vice President Marc Beauchamp during his recent lecture, Foreign Direct investment — An Economic Game Changer for the North Country, part of the Clinton Community College — The Development Corp. lecture series.
His firm has more than 25 years in consuwlting services for investments, site selection and business strategies.
Multinational corporations account for 25 percent of the global gross domestic product, about $16 trillion, Beauchamp said. U.S. subsidiaries of those firms spend an average of $43.4 billion on research and development a year and reinvest about $93.6 billion a year in their U.S. operations. Those subsidiaries account for 17 percent of American manufacturing jobs, he said.
The U.S. share of foreign direct investment has shifted from about 45 percent in the 1980s to 25 percent in the 1990s to about 15 percent at present. That’s because other countries continue to develop their economy, which makes them more attractive for investment, Beauchamp said.
Many foreign companies are starting to look at once again investing in U.S. operations, he said.
“There are reasons why these companies now invest in the U.S.”
The wage gap between U.S. and foreign labor, although still substantial, is expected to shrink in the coming years, Beauchamp said. Rising transport costs further reduce the advantage of manufacturing overseas.
An area needs to build its “value proposition,” he said, the things that make it attractive to a foreign investor.
“You have to make sure you present a complete picture of what you have to offer,” Beauchamp said. “This is now a global competition.”
Clinton County has a number of things that make it attractive to foreign investors, he said. That includes easy access to Canada, educational institutions such as Clinton Community College and SUNY Plattsburgh, rail and highway access, workforce availability, strong business incentives and investment readiness.
The presence of major multinational companies such as Bombardier, Nova Bus and Georgia-Pacific also helps. Investment in existing subsidiaries accounted for 82 percent of all foreign direct investment in 2008, Beauchamp said.
“When you have these foreign multinationals in your backyard, you have to take care of them,” he said.
The growth of Schluter Systems in the Town of Plattsburgh is a good example, Beauchamp said.
Based in Germany, the company expanded its Canadian presence to Plattsburgh in 1986. It had 12 employees here in 1990 and was up to 139 employees by 2010.
Schluter is presently seeking approval for a 73,343-square-foot expansion and now has 185 employees in Plattsburgh and 35 who travel North America to promote their products.
During a panel discussion following the presentation, Schluter Systems Chief Financial Officer Ed Martin said the company’s rapid success in Germany led to exploration of the North American market with offices in Montreal.
Plattsburgh came next because of its proximity to Montreal and the availability of enough property for future expansions.
Asked about workforce issues that face the region, North Country Chamber of Commerce Vice President for Economic Development Susan Matton said they are two-fold.
The first is to ensure the educational institutions continue to provide enough workers for companies when they first arrive. The second is to provide training opportunities to allow those workers to grow with the company.
Martin said acquiring skilled workers hasn’t been a problem, even with 60-70 jobs in administration.
“Over 15 years, I don’t think we’ve had to hire one employee outside of Clinton County,” he said.
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