Seeing the diversity of places and economic visions competing for investor attention at MIPIM earlier this month, against a backdrop of an increasingly hostile and protectionist US, made me think that there must be a case for a European FDI attraction strategy. After the financial crash in 2008 and during and post pandemic, the European Commission did introduce policies around data protection and sharing, and many member states reconsidered what they regarded at strategic industries, expanding protection of energy and defence sectors to include infrastructure, medicines, water, food and PPE as many felt exposed and over-reliant on China.
The Commission also introduced screening regulation in 2020 to assess risks to national security and public order covering non-EU investors similar to the Committee for Foreign Investment in the US (CFIUS).
First introduced during the Obama presidency in 2007, the US Department of Commerce stood up a federal investment agency (Select USA) to act as a single point of contact and information for foreign companies interested in establishing anywhere in the country. This federal body amplifies and extends the FDI reach of the individual States, many of whom have their own business attraction teams. As well as running a series of international roadshows, Select USA hosts an annual June conference in Washington DC that attracts thousands of foreign companies who can meet federal agencies in addition to many of the leading States who participate, exhibit and pitch their location offer. Of course, each State independently competes to win the investment, but the event offers a powerful international platform to communicate that the US is open for business and offers foreign investors an efficient and cost effective way to compare what is on offer in terms of clusters, sites, skills and incentives in an increasingly specialised world.
My contention is that European member States who offer rich and highly diverse business environments and unique sector strengths need to come together to promote Europe under a common umbrella, and position the regions attractiveness and openness to FDI in a much more coherent and assertive way. This is in part to counteract misinformation as well as full blooded competition from other countries, not just the US but Asia and Middle East. This initiative should in no way impede or distract from the efforts of individual member States to stand up agencies to promote and compete for FDI but rather amplify the overall attractiveness of a 500m market that is stable, well-regulated, highly innovative, and worth $20tn GDP, 6th largest economy in the world.
For the foreseeable future international trade and FDI attraction are likely to get dirtier and Europe needs to meet fire with fire.
The writer, author of The Great FDI Hustle (available on Amazon), welcomes your support. If there is enough interest, he may take this discussion further by engaging with the European Commission through MEP channels.
