Where, in all of America, should I invest?

The Federal Government has launched a new website to help entice foreign direct investment to America’s shores. Called SelectUSA, the site serves as a portal to the investment promotion sites of the fifty states, five territories and the District of Columbia. It also offers an exhaustive, but too confusing directory of federal incentives available to business. I can’t imagine how a middling-size foreign company is going to navigate their way through the Byzantine set of choices, except to assure themselves that there is gold in there somewhere and keep digging.

SelectUSA will improve and the site will grow. The story here is that it represents a profound change in policy for Washington and for federal agencies. Seeking investment has always been the province of the states and their sub-entities: regions, counties, cities and towns. During my career with the U.S. Commercial Service, commercial officers overseas were strictly enjoined from giving advice to potential investors that might discriminate between the states. Even if it was obvious that only certain states or cities made sense for an investment by a firm in the aviation industry, we weren’t supposed to tell them that. Attracting foreign investment was a states’ rights issue, and federal agencies were to stay far away. The result was that many states spent good money on having their own investment promotion offices overseas – and U.S. embassies were officially speechless on the subject, merely referring inquiries to the states. Some states do an excellent job (North Carolina comes to mind), others (most?) don’t even get into the game.

Of course, that conflicted with what our competitors were doing. Everybody else was offering one-stop shopping to attract investment to their country. If an auto parts supplier approached an Italian commercial officer, for instance, that officer would direct them straight to the major cities for the auto industry and provide cogent arguments why Torino might be better or worse for the investor than, say, Modena. For our competition, it is all about figuring out what the investor needs and then helping him to the part of your country that best meets those needs. We weren’t supposed to do that, a real handicap when representing a confusing market the size of a continent. (Though really good commercial officers often managed to have off-the-record discussions or offer extraordinarily broad hints.)

We played this game in spades in Germany when Daimler-Benz was making up its mind where to put a Mercedes plant in the United States. Mercedes is pretty smart and knew from the beginning which states were likely candidates. But that didn’t stop probably the majority of states and many cities sending their leaders on pilgrimages to Stuttgart to woo the Daimler board. We had to keep pleading for meetings even if it was clear the state in question didn’t have a prayer (nor do state governors like to hear that). But we had to play the states’ rights game. And we could not sit down with Mercedes and dispassionately discuss where it might make sense to invest.

I hear through the grapevine that the commercial officers have more leeway now to work with potential foreign investors. And SelectUSA is at least a beginning at getting comprehensive information out there. Though it still plays at being even-handed among the states, it is a beginning to actually helping potential investors to make up their minds. The next stop should be to unleash our commercial officers to actually help a foreign investor figure out which U.S. state or city best meets their needs. Of course, if that ever happens, we can expect a slew of complaints to Congress by states and cities not chosen. Some things never change.