The race to attract foreign direct investment from international companies has become an intense economic development competition among towns, cities and states across the country.
Now Greater Hartford is looking to step up its efforts.
The MetroHartford Alliance is fine tuning its international recruitment strategy to focus on three western European trading partners plus Israel.
The goal, officials said, is to attract more international companies from France, Germany, Israel and the United Kingdom, to set up shop in the Nutmeg State, creating new jobs in the region and opening the doors to business opportunities for local companies.
“These are the countries we believe we have synergies with,” said Sandra Johnson, vice president and director of international and domestic business development for the MetroHartford Alliance.
Johnson said France, Germany, Israel and the UK were chosen as recruitment targets because they are some of the largest trading partners with Connecticut. But the goal is to move beyond a simple export-import relationship and actually get foreign companies to open their U.S. headquarters or some type of presence in Connecticut.
It’s an area where the state has had some success. There are over 800 foreign-owned companies operating in Connecticut with over 120 from Germany and 100 from the U.K. They employ about 7 percent of the state’s total workforce, or about 104,600 people, according to the state Department of Economic and Community Development.
Some prominent foreign-owned companies with a presence in Connecticut include Ahlstrom, ING, Eppendorf, and Trumpf Inc.
But there’s a consensus that many more opportunities exist.
Johnson said one of the key recruitment strategies is marketing the region’s positive characteristics, which hasn’t always been easy with the limited resources that have been available on the state and local level.
Connecticut’s anti-business reputation doesn’t help either.
But doing a better job of promoting Greater Hartford’s strategic location between Boston and New York, high quality of life, educated workforce and diversified economy would create more attention and spark interest from foreign companies, Johnson said.
The recruitment efforts are being organized through the MetroHartford Alliance International Business Council, which is chaired by Leslie Robertson, the senior vice president and senior client manager of foreign direct investment at Bank of America in Hartford.
Meanwhile, four local lawyers and businessmen are leading committees that focus on a particular country:
Robinson & Cole partner William Sellay is focusing on the UK;
Brad N. Mondschein of Pullman & Comley is working on Israel; Dana Bucin of Updike, Kelly & Spellacy and Peter Holland of Bartram & Cochran are co-chairing the France committee; And James Kask, of the accounting and consulting firm J.H. Cohn, is focusing on Germany.
Johnson said networking, seminars, trade missions, and business visitations are some of the key strategies being implemented to woo foreign companies. But leveraging local connections is just as important.
Bucin, who is targeting the French business community, said there is a cultural affinity between Connecticut and France that should work to the state’s advantage. Connecticut companies shipped $2.2 billion in goods to France in 2010, making it the state’s largest export destination.
Bucin said she recently organized a focus group of French executives, who praised the state’s educated labor force and high standards of living. But they also raised concerns about the state lacking a strong organization for the French business community, something that Bucin is now hoping to establish.
“We need to make sure that when a French company expresses interest in Connecticut, they can come here and meet other French companies,” Bucin said, adding that common industries between the two countries include precision manufacturing, chemical products and medical devices. Bucin said attracting more foreign direct investment could also create the critical mass needed to bring back a direct flight to Europe from Bradley International Airport. The airport, and the new enterprise development zone around it, can also be a major selling point, officials said.
Kask, of J.H. Cohn, said Connecticut should leverage the strong relationships it already has with the close to 200 German companies currently operating in the state. Connecticut companies shipped $1.2 billion in exports to Germany in 2010.
Companies like Trumpf Inc., a privately owned German machine tool manufacturer in Farmington, and Eppendorf, an Enfield-based manufacturer of medical products, have shown a strong commitment to the region and even expanded recently. Eppendorf, for example, expects to complete construction of a $20 million addition to its Enfield plant this year and could add dozens of jobs there.
Kask said the state has also been able to develop a nurturing relationship with the consulate general of the Federal Republic of Germany.
“The decision makers in Germany are comfortable doing business in the state of Connecticut, and they know we have a great talent pool,” Kask said.
In terms of the Israeli connection, Johnson said, there are strong ties in life sciences, security and defense. The MetroHartford Alliance International Business Council recently held a Connecticut-Israel Technology Summit, in which 100 New England-based and Israeli companies met at Goodwin College to discuss business opportunities. Among those in attendance was Israel’s economic minister to North America, Yair Shiran.
Johnson said further cultivation may include a trade mission and continued outreach and facilitation.
Daniel Gundersen, a board member of the International Economic Development Council in Washington D.C. and an economic development official in Baltimore, Maryland, said efforts to attract foreign direct investment require serious resources, including sophisticated research analysis, relationship building and even hiring people to represent your region or state in a particular country.
He said about half of U.S. state’s focus on international trade, but even fewer have sophisticated foreign direct investment initiatives.
And some states or regions put more resources toward it then others. Gundersen said the state of Pennsylvania at one point spent $35 million on economic development initiatives related solely to attracting foreign direct investment, and had an international network that reached 50 different countries.
“Foreign direct investment can really fuel regional growth,” Gundersen said. “But you have to be in it for the long haul.”
And while competition is fierce, the resources that are being put toward recruitment efforts are getting scarcer because of budget deficits hitting many local and state governments.
“There has been a trend toward cutting economic development staffs,” Gundersen said. “It’s been getting tighter.”
