5 Recommendations for the Mayor’s FDI Strategy
Source: Politico
Before the pandemic, it seemed that international business was booming in the U.S. and in New York City. Consider what opportunities there were for such investment in 2018:
New York City opened its doors to a beta version of B.NYC in Brooklyn, for example. It was the newest addition to international-focused accelerator programs and co-working places, and an example of significant foreign direct investment (FDI) into the City. However, it soon shut its doors.
The New York business association, Partnership for New York City (PFNYC), released a study about the importance of foreign direct investments in the city to encourage more investment in that area, but that investment never came.
The Mayor’s Office for International Affairs conducted a survey among European firms on New York City as a business location; the study was never released.
In their annual business outlook survey, the American German Chamber of Commerce found that 100 percent of respondents intended to increase their investments in the U.S. – which is the highest number since the Chamber started the survey in 2014.
The chamber’s 2022 study results provide an optimistic outlook for investment, but nothing compared to the level of enthusiasm in 2018.
The question back then was: Will these international investments come to New York City, or go somewhere else in the U.S.? The question now is: how can any significant investment, national or international, come back to NYC?
Here are five recommendations for the Mayor’s FDI strategy to restart the engine for international investment in the City.
Stop the “level playing field” thinking. Unlike many other cities, New York City never had an FDI strategy. The two city agencies in charge of international business, the NYCEDC and the Mayor’s Office for International Affairs, never made any serious attempt at creating such a strategy, nor were the agencies equipped to push to advocate for international businesses to locate in the City. The reason often cited for this was the “level playing field” approach, which basically means that every company – foreign, national, or local – is treated the same, and there is no public assistance for locating a business in NYC. This approach resulted in a lack of actions and resources, including resources even to explain why New York City would be an attractive business location.
Update New York City’s image for foreign investors. Granted the 1970’s image of New York City being literally on fire is long gone--especially among the business community. However, in our talks, we find that a surprisingly large number of international investors are not aware that New York City is the center of “Hyphen-Tech,” meaning that New York City showcases many of the latest applied technologies across many industries. The inside view among the city’s tech ecosystem and the outside view is still very different. It is time to close that gap.
Partnership models – a way for the future City agencies are increasingly entering collaboration agreements on innovation with other countries and cities: France, Italy, Berlin and Montreal, to name a few. The efforts should continue and be supported by resources to build platforms for private sector collaboration. Public-private partnership models (PPP), in which both sectors join forces to promote the city’s business profile, are one way of achieving this. PPP-trade promotion agencies like London Partner or Berlin Partner have shown significant returns on their investments. The time is now to the rethink the structure of all business promotion agencies.
Partnership 2.0. As a “brand city,” New York is in a unique position. The city does not need to spend marketing dollars to put itself on the map for the business community. But times are changing, and “New York City is resting on its reputation”, as it was stated in the 2018 PFNYC study by a partner of a U.S. law firm. The city can leverage its exciting international activities and encourage a new kind of partnership by taking multilateral agreements to the next level - initiating an international hub dedicated to city investments, innovation, business, and learning. At today’s costs, it makes little sense to ask an international manager with a family to build a U.S. presence out of New York City; no brand can overcome the current hurdles.
Low-hanging fruit for the new mayor. Such an international agenda is an opportunity for Mayor Adams - he has built the necessary relationships already as Brooklyn Borough President, and he has demonstrated priorities and commitment. For him a push for international businesses seems like low-hanging fruit.