Transcript Document

Eastern NC Foreign Direct
Investment Project
Brent Lane, Director
UNC Center for Competitive Economies
Kenan Institute of Private Enterprise
University of North Carolina
Kenan-Flagler Business School
Applied scholarship to strengthen local, regional and
state economic development strategies
The Carolina Center for Competitive Economies (C3E)
Kenan Institute for Private Enterprise
Eastern NC Foreign Direct
Investment Prospects
Project Summary:
Identify foreign direct investment (FDI)
opportunities in the region’s targeted industrial
clusters
Key Assumption:
ENC can build FDI advantage by establishing
relationships in Emerging Economies
Project Tasks
Task One: NCER Targeted Industry Clusters
Characterization
Task Two: Targeted Clusters’ FDI Pattern
Assessment
Task Three: Targeted Clusters FDI Prospect
Identification
Task Four: Identify Specific Country/Cluster Thought
Leaders
Key Research Issues





Extent of Foreign Direct Investment (FDI) in
NCER’s targeted cluster
Established FDI relationships/patterns
Leading emerging foreign companies for target
cluster
Countries where emerging FDI prospects are
concentrated
“Thought leaders” guiding future FDI decisions
in those countries
Research Team
Principal Investigator:
 Brent Lane, UNC Kenan Flagler Business School
Senior Research Advisor:
 Michael Luger, Dean, Manchester School of
Business
Strategic Analysts:
 Poi-Jui Lung, UNC MBA student
 Swami Shanmugasundaram, UNC MBA student
 Amit Sahai, UNC MBA student
 Leonid Okneanski, UNC MBA student
The Carolina Center for Competitive Economies (C3E)
Kenan Institute for Private Enterprise
Core Concepts
Industry Clusters
Foreign Direct Investment
Emerging vs. Developed Economies
Capital Markets in Economic Development
Industry Cluster
A cluster is a theoretical network of interdependent
buyers and suppliers
Industry clusters consist of industry sectors (NAICS)
that exhibit significant input-output linkages
C3E uses a defined set of 43 national industry clusters
as a means of studying a regional economy’s strengths
“Advanced Manufacturing”
Cluster Definition





Constituent Industry Sectors
Metalworking Machinery
Special Industry Machinery
General Industrial Machinery And Equip
Electrical Equipment & Supplies
Measuring & Controlling Devices
Using Clusters in
Economic Development
Identify “Targets of Opportunity”
Clusters suggest regional comparative advantage
Denser clusters offer greater value proposition
 Emerging growth companies
 Expansion of existing firms
 Focused recruitment based on defined advantage
Foreign Direct Investment
FDI can take many forms….
 Physical facility/subsidiary in another country
 Acquisition of US firm
 Investment in US firm
 Joint venture/strategic alliance with US firm
 Intellectual property license
FDI Motives
Transplanted home-bases:
 top management, R&D, and production
Scanning units:

R&D units with limited development capability
Market-seeking units:

access customer concentration
Resource-seeking units:

access specialized inputs
FDI Drivers






Company maturity/scale
Export orientation
Geographic relevance
Resource advantage
Exchange rate
Cluster value proposition
Emerging vs. Developed
Economies
No fixed definitions; often politically motivated
“Economist” magazine:
Argentina
Colombia
Hungary
Jordan
Pakistan
Russia
S.Korea
Brazil
Czech Rep.
India
Malaysia
Peru
Saudi Arabia
Taiwan
Chile
Egypt
Indonesia
Mexico
Philippines
Singapore
Thailand
China
Hong Kong
Israel
Morocco
Poland
South Africa
Turkey
Advanced Manufacturing
Where are they now?
 1,355 advanced
manufacturing firms in EUS
Where are they from?
 178 of these are FDI
EUS
Austria
Bermuda
Canada
China
Denmark
Finland
France
Germany
Ireland
Israel
Italy
Japan
Luxembourg
Netherlands
Scotland
Sweden
Switzerland
England
Parent
1
4
15
1
3
1
9
52
1
6
4
18
2
2
4
9
15
31
112
4
37
579
49
81
378
1916
32
50
918
2145
3
74
28
124
186
491
FDI Prospect Criteria
Where are the next ones?





Advanced manufacturing cluster sector
Headquarters or sole location
Annual revenues > $10 million
12,150 worldwide
Emerging vs. Developed economies
Findings
Advanced Manufacturing is predominantly a
developed economy industry cluster


majority (6,537) of AM companies are in
Developed Economy countries
sizable minority (816) of AM companies are in
Emerging Economy countries
Findings
But not all Developed Economies have established
AM FDI patterns in EUS
 Germany, England, Japan and Switzerland lead
AM FDI in Eastern US
 Italy, France, Spain, Portugal not yet active in FDI
in the cluster
Findings
Minimal AM FDI from Emerging Economies to date
 816 prospect companies in 18 countries
 only 7 AM EUS FDI locations from Emerging
Economies
 only Israel has been source of more than one
Findings
Both Emerging and Developed Economies
have substantial populations of Advanced
Manufacturing FDI prospects without
established patterns of Eastern US location
preferences
AM FDI strategy should address both certain
Developed and Emerging economies
Emerging Economies
Most FDI prospects with least established FDI
patterns in the Advanced Manufacturing cluster:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
China
South Korea
India
Malaysia
Brazil
Singapore
Hungary
Taiwan
Poland
Czech Republic
11.
12.
13.
14.
15.
16.
17.
Mexico
Russia
Hong Kong
Saudi Arabia
Slovakia
Argentina
Turkey
Developed Economies
Most FDI prospects with least established
FDI patterns in the Advanced
Manufacturing cluster:
1.
2.
3.
4.
Italy
France
Spain
Finland
5.
6.
7.
8.
9.
Netherlands
Australia
Norway
Ireland
Portugal
FDI Prospects
SINGAPORE
Company
Energizer Singapore Pte
Qioptiq Singapore Pte
Ltd
Aem Singapore Pte Ltd
Salcon Pte Ltd
Stelop Pte Ltd
Mentor Media Ltd
Applera Holding
Kulicke & Soffa Pte Ltd
Sunningdale Tech Ltd
Deldhi Automative
Systems
Pelmec Industries
Limited
Tuner Division-Philips
Dorma Production Gmbh
Leica Geosystems
Disk Precision Industries
Hongguan Technologies
Trend Singapore West
Hamworthy Pte Ltd
3com Technologies
Revenues
Employees Business
$167,724,944.00
600 Dry cell batteries, single or multiple cell
$ 56,854,499.00
$ 45,782,299.00
$ 44,815,640.00
$ 23,775,780.00
$155,222,439.00
$141,173,920.00
$116,498,764.00
$116,201,890.00
$ 77,659,725.00
$
$
$
$
$
$
$
$
$
64,173,778.00
61,212,792.00
44,221,501.00
34,845,153.00
30,581,104.00
30,391,833.00
27,712,953.00
25,192,828.00
24,061,505.00
650 Optical instruments and lenses
321 Semiconductor manufacturing machinery
72 Pumps and pumping equipment
90 Optical instruments and apparatus
600 Computer software tape and disks
200 Laboratory apparatus and furniture
300 Semiconductor manufacturing machinery
300 Jigs and fixtures
2000 Engine electrical equipment
550 Ball bearings and parts
800 Instruments to measure electricity
274 Electrical equipment and supplies, nec
110 Surveying instruments and accessories
300 Power transmission equipment, nec
80 Metalworking machinery, nec
400 Precision tools, machinists'
145 Pumps and pumping equipment
300 Process control instruments
Capital Market Actors
SINGAPORE
Company
3V SourceOne Capital Pte Ltd
Abacus
Asian Direct Capital Management
Bioveda Capital
H&Q Asia Pacific Singapore
iAsia Alliance Capital
iGlobe Partners
JAIC Asia Capital
OCBC Wearnes & Walden
PPM Capital
PrimePartners Asset Management
SembCorp Industries Ventures
Springboard Harper
Standard Chartered Private Equity
Star Acquisition
UOB Venture Management Pte Ltd.
WorldView Technology Partners
Type
VC
PE/Fund
PE
PE
PE
PE
VC
PE
PE/VC
PE
PE
VC
VC
PE
VC
VC
PE
Focus
Life sciences
Information technologies
Manufacturing
Healthcare
Advanced manufacturing
Media and information technology
Life sciences
Media and information technology
Healthcare and Financial Services
Diverse
Financial services
Advanced manufacturing
Technology
Information technologies
Life sciences and manufacturing
Pharma
Information technologies
Next Steps




Specific prospect identification and qualification
Market “thought leaders” targeting
Capital market “gate keepers” identification
Additional clusters application