What Have We learned?

        When it comes to FDI there are lots of facts and opinions out there on both sides of the argument about whether or not it is a good thing but  I would like to look at what we have discussed throughout the semester and give a quick look at a few of the points.
        Some of the positives that come out of FDI in wisconsin's example with Foxconn are things like job creation, investment, and new development. looking at other examples of FDI for example the one in Vietnam had mostly positive results with an increase in income and they were exceeding the predicted numbers for that year and they still had a month left. Along with this increased income came lot's of job creation and new development. On the other hand some companies that try to practice FDI have a track record of not following up on these promises leaving countries disappointed and lost because they were promised investment and job creation and got neither. FDI can also create unfair trading because a country can invest elsewhere and produce in that market and sort of take over the market and destroy the other "native" companies chances at being successful in their own market. 

FDI - Milwaukee 7

M7 regularly markets the region to European prospects in Spain, Germany, France, and Great Britain due to 60% of foreign direct investment coming from Europe.The efforts are paying off because M7 has facilitated 10 European FDI wins and thus expected to employ 800 workers in the region.

One example is Spain-based Ingeteam, a manufacturer of generators and inverters for the wind and solar energy markets, which selected Milwaukee for the firm's first U.S. manufacturing facility. M7 led the regional response, persuading Ingeteam to select Milwaukee from more than 100 other sites in 10 U.S. regions.

The Ingeteam attraction project generated direct benefits for southeastern Wisconsin: 275 high-paying manufacturing jobs and millions of dollars in capital investment.

To find out more about M7, check out the link below!

http://www.mke7.com/index.phpsubmenu=foreignDirectInvestment&src=gendocs&ref=ForeignDirectInvestment&category=businessExpansion 

Aviv Ezra and Scott Walker: Wisconsin, Israel work together to bolster water technology hubs

The Governor of Wisconsin and the consul General of Israel have been working on water technology. Israel is strong in desalination technology while Wisconsin is the leader in freshwater technology. This collaboration is leading to a strong relationship. For both of Wisconsin and Israel, their goals for this collaboration are the following: We aimed to enhance academic affiliations, foster business connectivity, cement strategic partnerships and increase exports. The continued foreign investment in Wisconsin has encourage more collaborations between Israeli and Wisconsin water technology organization. To learn more about the relationship between Israeli and Wisconsin click on the link.

Why Foreign Direct Investment in Wisconsin

            There are many questions when it comes to investment in general but even more so when it come to foreign direct investment. One of the biggest's questions is why should we do it. There are many driving forces behind the new investment in Wisconsin ranging from income, job creation, development and many other things but some people believe that one of the driving forces behind this new push for Foxconn's investment in Wisconsin is the fact that our governor promised a lot of job creation and has yet to reach the goal that he sort of pledged in his campaign and that this would help him to reach this job goal. 

Invest.InWisconsin.com

Over the past decade, FDI has been responsible for more than $7.8 billion in capital expenditures and the creation of more than 13,000 jobs in WI. Just recently, in an effort to draw additional investment to WI, the Wisconsin Economic Development Corporation has launched a new website and bimonthly letter to make the case for global companies seeking to expand or relocate to come to Wisconsin.

Invest.InWisconsin.com is a website that can be used as a resource for international businesses considering WI for investment and job creation. In the past year, the primary role of the international development team at WEDC was to assist WI companies with exporting, but the new strategy recognizes the role of FDI.

The website also includes information about Wisconsin's key industries, the website also includes details about it's workforce, statewide incentives and the benefits of its central location.

http://invest.inwisconsin.com/en/
http://inwisconsin.com/insource-newsletter/new-website-supports-fdi-strategy-in-wisconsin/

Importance of FDI to the economy

Foreign Direct Investment (FDI) made by companies helps to establish new business operations and acquire new relationships and assets in a new country. According to FDI Confidence Index, a global business executive survey, the US remains the top-ranked FDI destination for 4 year in a row. The United States economy is showing resilient to the risks that other countries are facing, including other first world countries. Companies look for the following before deciding where to place their next investment, Labor availability and wage rats, complexity of tax codes, effectiveness of political systems, strength of public education, and conditions of infrastructure and ongoing commitment to maintain. These companies strive for a friendly-business environment. Companies that find an area that meet these criteria are more likely to build a new part of their company there, therefore will help that cities economy and in the long run help the US economy.

http://www.areadevelopment.com/LocationUSA/2017-US-inward-investment-guide/importance-of-FDI-to-US-economy.shtml

Other Examples of Foreign Direct Investment

Vietnam's Foreign Direct Investment:

Vietnam was predicted to have a total of $28 billion in FDI this year and have already surpassed that number recently reaching a total of $28.24 billion and there are speculations that they might be able to reach a total of nearly $30 billion by the years end. Roughly $16 billion of this capital is newly registered-capital and about $5 billion has come from M&A activities (mergers and acquisitions). This is a good example of how FDI can work in a countries favor, although much of Vietnam's investments have been a result of M&A activities it is still bringing more money into the country than without these investments. There are many examples of FDI working out exactly as everyone would hope and being profitable and positive for all parties involved but unfortunately when it comes to Foxconn as a company they seem to have a hit and miss track record when it comes to following through with their contracts and promises.

For more information on Vietnam's FDI situation:\

http://english.vietnamnet.vn/fms/business/189352/vietnam-expects--30-billion-fdi-by-year-end.html

Foreign Direct Investment – Helping Wisconsin’s Economy

Katie Sinnott (Vice President of international business development at the Wisconsin Economic Development Corporation) claims that in terms of international business development, many people think that exporting and foreign direct investment are two separate things. She argues that they are more related than we realize.

Katie’s goal is to help Wisconsin’s economy grow through increased exports, as well as increase foreign direct investment. She says that FDI benefits not only the company that is making the investment, but also the local company that’s being invested in and the company’s local suppliers.

WEDC (Wisconsin Economic Development Corporation) is working with the Global Cities Initiative (GCI) to help the perceptions of FDI grow. GCI is a joint project of the Brookings Institution and JPMorgan Chase which try to boost exports and FDI.

Here in Wisconsin, there is a core team, including WEDC that engage with the Brookings to help with FDI strategies, specifically in Milwaukee. This core team is working to help with exports and the growth of FDI, as well as come up with strategies to improve FDI in Wisconsin.

Find out more about our Core Team by clicking the link below!

http://inwisconsin.com/insource-newsletter/foreign-direct-investment-holds-untapped-potential/

Is the deal with Foxconn unconstitutional?

According to some, the GOP lawmakers and Gov. Scott Walker have gone to far in dictating how courts should handle any potential litigation over new companies. The Wisconsin Legislative Council have found several provisions of the legislation to be unconstitutional. This law that was passed by Walker changes how environmental challenges and legal cases over the factory would be handled. Any legal matters that happen regarding Foxconn will now have special requirements that will allow the matter to quickly move to the Supreme Court. By giving the courts a certain way to handle any Foxconn issue, Foxconn will be able to do unlawful things easier because the courts will look the other way. 

http://www.jsonline.com/story/news/politics/2017/09/20/provisions-wisconsins-foxconn-law-could-unconstitutional-legislatures-attornonpartisan-analysis-find/684418001/

Foxconn: Is it Worth it?

       Some people have reservations when looking into the Foxconn deal and their history when it comes to making these promises of investment and job creation. Although bringing Foxconn to Wisconsin might bring jobs it also might bring disappointment. Foxconn has a history of promising investment and job creation and not following through. In Wisconsin's case we have promised tax cuts, assistance, and other things but all of this investment from the people of Wisconsin will take 25 years to break even on and that's if they actually follow through with their promises of job creation and investment. 

       In places like Brazil, Pennsylvania, Jakarta, and India Foxconn has negotiated deals and investment to build production facilities and create jobs, sometimes promising upwards of fifty thousand jobs, and not even breaking ground on a new facility. Brazil was promised a 12 billion dollar investment in 2011 that has yet to materialized. In fact the location that they were going to build on has been completely abandoned. Foxconn has recently downsized some of their operations drawing suspicions to their promise of creating jobs. India was told they would receive a 5 billion dollar investment and possible job creation of up to 50,000 jobs that still hasn't happened. 

      One of the issues that Foxconn will face when coming to America will be changing their typical operations, a very young work force working for very little wages, to meet the standards and regulations that we have here in America. This is something that could really impact how they are able to operate because on top of training new people they will almost have to retrain themselves to operate under new standards. 

For more Information:

http://money.cnn.com/2017/09/18/news/scott-walker-signs-foxconn-deal/index.html

https://www.nytimes.com/2017/09/20/business/foxconn-trump-wisconsin.html

Foxconn Deal – is it a go?

Last week Governor Scott Walker approved the new Foxconn plant in Wisconsin. Foxconn is investing $10 billion dollars to build a factory that makes LCD screens. This is expected to create around 3,000 to 13,000 new jobs.

How much will this cost?

The state of Wisconsin will be paying around $15,000 to $19,000 dollars per job year.

Is it worth it?

Incentives:

•           $1.5 billion in state income tax credits for job creation
•           Up to $1.35 billion in state income tax credits for capital investment
•           Up $150 million for sales and use tax exemption

Although Walker is being slammed by this deal, he is holding his head up high and continuing with the deal. In August, Walker's spokesman stated " This is a once-in-a-lifetime opportunity that brings high-tech manufacturing back to America, right here in Wisconsin. The Company's investment is $10 billion, which is $6.70 of private investment for every $1 of pubic funds. This is an excellent investment for our entire state."

Want more info? – Check out the links below!

• http://money.cnn.com/2017/09/18/news/scott-walker-signs-foxconn-deal/index.html
• http://www.chicagotribune.com/business/ct-foxconn-wisconsin-handwritten-deal-20170831-story.html
• http://www.latimes.com/business/la-fi-foxconn-wisconsin-20170918-story.html

Throughout he next couple of weeks we will be talking about the FDI in Wisconsin. FDI stands for Foreign Direct Investment. We will be looking at what types of foreign companies are investing in Wisconsin, what the trends are and the impact of FDI has on the state. -Taylor R.