Friday, June 24, 2011

New federal program to help state and local economic development offices

by Andrew Nelson

Subnational governments are no longer alone when it comes to attracting businesses to their jurisdictions.

On June 15, President Obama signed an executive order establishing SelectUSA, a new federal initiative to help local and state government economic development offices (EDOs) increase the amount of foreign direct investment, business expansion, and business retention within their borders.

Until the creation of SelectUSA, the United States was the only developed economy in the world that did not have a national trade promotion and advocacy arm to encourage foreign investment in America. The responsibility of attracting business into the United States was supported by the Commerce Department’s “Invest in America” program, but the bulk of advocacy work was performed by state and local governments.

SelectUSA’s executive director, Barry Johnson, came to Paris this week to promote the new initiative among EDOs that were present at the Paris Air Show.

"Communities need three things to grow: (1) entrepreneurs, (2) an innovative infrastructure, and (3) a support system," says Johnson. SelectUSA's team is designed to create the infrastructure and support system while at the same time helping innovative entrepreneurs navigate federal policies and procedures that have previously inhibited their entry to the U.S. market.

Johnson continued, "We all understand that investment spurs business growth and creates jobs. We also need to learn that investment - including foreign investment - will generate exports from the United States. It doesn't matter if it is a foreign-owned business... it counts as an American export." Additionally, Johnson claims that foreign-owned businesses often pay higher salaries than their American competitors and that although foreign companies account for only 10 percent of business in the United States, they also account for over 18 percent of exports.

SelectUSA is geographically neutral, meaning that the program will not advocate for one American city or region over another competing region. Rather, Johnson's group will provide the same level of support for all 50 states. However, when the choice falls between an American prospect and a foreign city, SelectUSA will step in and provide advocacy.

"At that point, the federal government will step in and say, 'The United States is a great place to do business'... We may have the Secretary of Commerce or even the President make a call to the business," says Johnson.

Johnson says that SelectUSA will act as an ombudsman for receiving feedback from both foreign and domestic enterprises. "Imagine you have an EPA permit that hasn't been processed or you are having trouble obtaining the appropriate visas... SelectUSA will have senior officials from every department, agency, and commission of the federal government to examine what is holding up business development and to see if trends are surfacing. This interagency investment working group will report to the President once a month to find answers to individual problems."

Johnson was also quick to point out, "We can't answer every question or solve every problem."

It is important to note that SelectUSA is not only for foreign companies. "We want to ensure that American businesses stay in America. Part of our goal is business expansion and retention within the United States from companies that are already located here," emphasized Johnson.

To learn more about federal resources available to your company or economic development office, visit


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