World Forum for Foreign Direct Investment in Philadelphia Means Business

Andrea Van Grinsven, for GPA -- From June 16 to 18, Philadelphia hosted the 11th Annual World Forum for Foreign Direct Investment, the first to be held in North America. Since 2003, the forum has attracted corporate investors, international delegates and economists as a platform to network and discuss global location decisions amongst Foreign Direct Investment (FDI) dealmakers.

Participants in the forum gathered at the Philadelphia Union League for educational panels, seminars and networking events. Delegates also had the opportunity to join excursions highlighting development projects in Philadelphia, the Lehigh Valley, Malvern and Chester County.

“The trend into cities is global and pronounced,” stated Dan Fishbein of CIT Group during the forum’s “Making Brownfield Greenfield: Suburbs Versus Inner City” panel. By hosting the FDI forum and the accompanying regional site visits, Philadelphia had the opportunity to highlight itself as a city ripe for investment and corporate expansion. In discussing factors that drive FDI site selections, many panelists mentioned the way in which Philadelphia satisfies FDI decision makers’ requisites.

During the “Making Brownfield Greenfield” panel, Fishbein and fellow panelists Erik Stockglausner, Ray Milora and Don Ingerson agreed that the presence of amenities, such as infrastructure, a major airport and tax incentives, is an important factor in deciding where to invest.

Milora, head of design and change management at Glaxo SmithKline (GSK), used the shuttle service for Philadelphia’s Navy Yard as an example of an amenity that made the area an attractive location when the company was looking to move from Center City. Since December 2012, the Navy Yard has offered a free Loop shuttle service between SEPTA’s AT&T Station and stops throughout the Navy Yard and an express shuttle that runs directly from Center City to the Navy Yard. GSK, which has been a part of the Philadelphia community since it opened its first pharmacy in 1830, moved its Philadelphia location, one of two U.S. corporate headquarters it maintains, to the Navy Yard in April 2013.

The forum also engages FDI leaders with the opportunity to discuss new challenges arising as their businesses become increasingly global. At this year’s event, cyber security was a hot topic, discussed by Christopher Furlow, Freidhelm Peplowski and George Do in the final panel, moderated by Andreas Dressler.

“FDI is all about borders - from point A to B - but this has no borders,” said Dressler, summarizing a key difference between traditional foreign markets and cyberspace. Although advances in technology help facilitate data exchange in an international environment by erasing borders, they also complicate security issues surrounding corporations’ information. Therefore, concerns about cyber security have consequential implications for FDI. Differing technological capacities and security regulations by country either attract or repel the investor.

“We go where our customers are, the big metros,” shared Do, director of global information security at Equinox. Aside from the level of customer presence, panelists agreed that the most capital-intensive markets for investment are those with competitive power facilities, green energy and low risk for natural disasters.

Even if a potential location hosts attractive technological capabilities, investors are unlikely to overlook the legal factors influencing data security. Dressler asked the panelists to weigh in, asking if stringent laws make a location more attractive.

In answering this question, panelists chose to discuss Europe’s competitiveness in attracting FDI in light of the European Commission’s recent data protection reform. The consensus among the panelists was that strict data laws do not make locations less attractive. Do pointed out that in the case of firms dealing heavily in intellectual property, a location with tight data laws in place is advantageous. For this reason, countries like Uruguay, Chile and Singapore are trying to bolster their data security laws. However, Peplowski of ARTEC reminded the group that the idea of privacy itself varies across borders since the U.S. and European countries have different definitions of what constitutes “corporate property.”

Cyber security continues to grow as an industry in its own right. “We’re working to recruit people while they’re young and curious. We want to sway them to the good side versus the bad side,” shared Do, recommending that companies work to have the best defense in the form of a good offense.

Despite the heavy recruitment concentrated in the Silicon Valley, New York and Los Angeles, the demand for people trained in cyber security is exceeding the amount of programs in place to adequately train them. Panelists expressed frustration with the few offerings for specialized higher education in the cyber security field.

“It’s important to focus on certifications. We need standards, now that cyber security is a hot topic,” stressed Christopher Furlow, president of Ridge Global. According to Furlow and the other panelists, creating a uniform curriculum is the key to producing students with meaningful degrees and advancing the cyber security industry.

As was clear from the sheer volume of FDI-related topics over the three-day conference, security is simply one factor influencing FDI decision makers. “There are different pieces to attracting investment: the tax piece, the security piece and the environment piece,” Furlow said.

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