Why Use Foreign Direct Investment (FDI) to augment a Business Retention and Expansion (BRE) program?
How Innovative Hubs are Sustaining the Biotech Industry Boom
With most Economic Development Organizations (EDOs) jumping on the bandwagon to leverage Foreign Direct Investments (FDIs) as part of their Business Retention and Expansion strategy, today’s corporate stakeholders are now utilizing them as a sort of secret weapon that can transform an outdated business model from ‘winner takes all,’ to a ‘let’s grow this pie together’ approach.
The current trend of FDIs is to take on a proactive tactic in which the outcome is to establish a sustainable business acumen amidst the economy’s ever changing tides. Look at it this way – think of FDIs as part of an eternal game. On the contrary to a 1-dimensional set up where the course is transactional in nature, two players are traditionally pitted against each other to determine a winner or loser and the winner is declared on the basis of some sort of quantifiable result. But according to Simon Sinek’s book, The Infinite Game, FDIs function as the infinite chess piece – there are no winners or losers because progress is too challenging to measure. The goal is not to beat its competition, but alas – outlast the competition by keeping ahead of the game.
Sinek concludes this is how we should look at economic development – from the perspective of an infinite game in which FDIs interconnects the community to grow a sustainable and inclusive economically resilient community, all from a regional context.
The Foxconn Case Study: What Type of Game was It?
Although Foxconn is not popular in Illinois, it’s a great example of how we see FDIs make a positive, economic impact on the Midwest region. The Foxconn vision was hardly ever about LCD technology. To sum, it was about developing a viable regional technological ecosystem in the Midwest.
There’s been talk in the media on how the failure to attract moderately skilled laborers in assembly positions have negatively impacted the manufacturing industry. Christopher Mims’ article entitled, “This Thriving City—and Many Others—Could Soon Be Disrupted by Robots,” suggests that these type of positions present a unique challenge to this generational workforce; the new “precariat” (the precariously employed in a low-wage workforce where benefits or protections are low) experiences role changes frequently as technology transforms the nature of work.
Foxconn successfully averted that challenge by pivoting their focus to building innovation hub stations across Wisconsin. Over time, Foxconn will be able to develop and nurture a regional pipeline of innovators and engineers to fill a 1,000-acre industrial park with agile companies that fit within their supply chain.
Coupled with “The Commons” project to interconnect 28 Wisconsin colleges and universities that promote a culture of entrepreneurial spirit, and you’ll have a forward thinking “Start-up Community” ecosystem capable of attracting, retaining and training the next generation of talent.
Why Does this Matter to Illinois?
I hold a firm belief that environmental concerns for the development of a 1,000-acre site can be overcome by sound engineering. To this, Lake County, IL has the most to benefit from Foxconn.
With an existing underutilized and seasoned workforce of mid- to senior manufacturing management talent, a healthy pipeline of teenagers pursuing skills at the Lake County Technical High School Campus as well as thousands attending the College of Lake County, Lake County can already reinforce this fledgling network.
Furthermore, as Illinois continues to shed 53 percent of high school seniors attending college to other states, it’s important to note that an emerging fifth generation regional economy will encourage them to return home to start families and to establish careers.
To be clear, FDI is not a quick fix. On the contrary, it needs to be a part of a long-range, detailed plan. The current method of poaching from one area of the region to benefit another is a net zero sum game. FDI can be leveraged to bring fresh capital (money, talent, and other intangible assets) and resources to a region which allows for additional players to be bought into the “eternal” game. Everything else is like rearranging chairs on the Titanic – through attrition, we are all sunk.
|Michael Edgar, President GWDC
GWDC is an independent 501c3 Economic Development Corporation. Michael Edgar is the President & Board Chair of the Greater Waukegan Redevelopment Corporation. In addition to leading the GWDC executive team, Michael is also President a local architectural firm with over 900 projects completed in the GWDC service area.
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