In June, a delegation representing more than 100 Canadian businesses descended on Washington. The management teams of each of those companies had an interest in investing in the U.S. and the company representatives were there by invitation of a unique federal body — SelectUSA — which is a one-stop shop for would-be foreign direct investors.
SelectUSA was founded by President Barack Obama in 2011 with the goal of promoting investment across the U.S. Historically, this kind of work was done at the state and territorial level. Obama created SelectUSA to augment local efforts to promote investment at the federal level.
The reason? Foreign direct investment is good for the country. Statistics show that the types of employment that foreign companies create is always high-quality. On average, employees working for foreign companies in the U.S. make $80,000 a year in salary — significantly higher than the national average — said Vinai Thummalapally, executive director of SelectUSA.
“We wanted a place in Washington that could be seen as a one-stop shop that potential investors can tap into regardless of what sector they’re in or their size,” Thummalapally said. “We serve companies of all sizes and we find that the inquiries coming in weigh heavily toward SMEs.”
SelectUSA’s three key services fall under the categories of information-sharing, networking and advocating.
Under the information rubric, SelectUSA has easy access to valuable business intelligence of all kinds, including demographic statistics, cost of living analysis and regulatory information about all sectors.
“There are a billion bits of information they’re looking for in the due diligence phase,” Thummalapally said. “A lot of this information is available on the respective federal agency websites, but it’s somewhat daunting for SMEs to know where to go.”
When it comes to networking, it’s all about making connections for the potential investors.
“Often companies don’t have easy ways to find contacts at the local level,” Thummalapally said. “We don’t suggest locations because we have to be neutral, but investors will often say, ‘Here are three locations where we’re looking for introductions.’ We can do that. Boston, Silicon Valley and Austin, Texas — bam! We make those connections for them.”
Finally, SelectUSA acts as a kind of ombudsman for investors.
“They lean on us to be able to tap into our ability to access all federal agencies,” Thummalapally said. “If they need additional information or don’t hear back from an agency they’ve contacted, we will follow up. We aren’t an adjudicator, but we are sort of a partner for the investor.”
Two Canadian companies SelectUSA has helped:
Kirchhoff Van-Rob Inc. is an automotive parts manufacturer. It recently made a $20 million investment in Lansing, Michigan. “It’s a very competitive company from Canada,” Thummalapally said.
Clearpath Robotics, of Kitchener, Ontario is a mobile robotics solutions provider. Its leaders wanted to go to the U.S. and settled in Silicon Valley, one of the most expensive places in the U.S. to do business. It was the right choice: the company grew from 80 employees in 2009 to 137 in 2013. The Silicon Valley location helped Clearpath to access the eco-system of talent there, Thummalapally said.