BEAM Global Trade & Investment Plan · 2018. 6. 18. · 1 BEAM Global Trade & Investment...
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1 BEAM Global Trade & Investment Plan Implementing What We’ve Learned
BEAM Global Trade & Investment Plan · 2018. 6. 18. · 1 BEAM Global Trade & Investment Plan Implementing What We’ve Learned . 22 county region. \爀屲\爀倀爀漀搀甀挀攀
BEAM Global Trade & Investment Plan Implementing What We’ve Learned
Presenter
Presentation Notes
22 county region. Produce ½ of exports, ½ jobs, ½ of GDP, approx 2 million people --nearly ½ the population. Concentration of activity of the state’s top sectors
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The Top 100 Cities Across the U.S…
Produce 75% exports
Host 74% FDIFDI produces
24% U.S. exports
Presenter
Presentation Notes
FDI: inputs in R&D, capital investment,productivity growth, comensation, employment, value added
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f
Kentucky’s Record-Breaking Exports
BEAMRegion
Kentucky
Source: Brookings Export Data 2016
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Presentation Notes
Greatest concentrations of these firms is un urban areas. BEAM performance important to KY and to the US BEAM Region 46% KY Exports 2016 (14% Lex, 32% Lou) 26,000 direct export-supported jobs 65,000 indirect export-supported jobs
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• $10 million and up in revenue
• Engines of sustainable job creation
• Innovative, adaptive, agile
• Upotential in exports performance, market reach
Middle Market Companies
Presenter
Presentation Notes
FDI: inputs in R&D, capital investment,productivity growth, comensation, employment, value added
Created regional trade partnership
Launched export grant Designed export
training for econ dev colleagues
Released regional export
plan
Developed MBA international
commerce course
Funded thought leaders for region’s top
events
Conducted targeted company outreach
Convened sector-specific
company briefings
BEAM Brookings Export PlanIncrease Export Successes by 50% in 5 Years
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Presentation Notes
BEAM completed export planning process in collaboration with Brookings in 2013 Launched plan at end of 2013 to address companies’: Risk aversion Primary focus on domestic markets Uneven awareness of trade resources Limited supply of export-ready small companies
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FDI In Major Metropolitan Areas
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BEAM Region FDI Compared to Peers
• Large greenfield investments have become less common everywhere
• More dependent than our peers on older FDI
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Presentation Notes
FDI concentrates in manufacturing Bedrock of BEAM economic activity is manufacturing Region has vulnerabilities when it comes to FDI Lou-lags peers in share of private sector employment from FOEs Lex—leads but is highly dependent on pre 1991 Toyota investment. Largest Toyota plant outside Japan M&A accounts for 56% of the region’s FDI. Recent large acquisitions have heightened attention to M&A. Louisville and Lexington are land constrained but can still grow through M&A Greenfields rare Of the region’s 10 largest firms, 6 located before 1991, 3 represent M&A post 1991, and only 1 is a post-1991 greenfield. Large greenfield investments are powerful but rare catalysts. New data. Need analysis of current practices and assumptions in economic development, redoubling our most effective efforts and examining those that may be less effective/data-based.
Dense Clusters
Attract FDI
Exporting Middle Market
Companies Help Cluster
Density
Middle market export growth
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Inter-Related Goals
Wages Specialization Market Reach Adaptability
Presenter
Presentation Notes
Exports and FDI focus heavily on manufacturing . FDI accounts for 24% US exports 1600 SMEs manufacturers in the region account for 75% of manuf employment MM and pre-middle market companies have the most ground to gain in export performance MM grow through exports. Intl reach, risk orientation, and market reach build strong clusters. These qualities make them attractive to FDI EDO resources serves middle market –have most influence here Facilitates repeated expansions exporting fuels eventual next stage growth, including M&A Exporting firms are attractive to M&A because of demonstrated growth, agility, and diversification
Repeated, Incremental
Growth = Healthy
Economy
Planning for the Next Chapter
EDOs Have Greatest
Impact on Middle Market
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Middle Market Essential to Healthy Economy
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Presentation Notes
Exports & M&A Crossover: 150 SME firms identified from this list from SME manuf list This same group reports interest & inquiries in M&A 1000 MM firms in the region—many of this 150 are part of that group Mighty Middle: 1% of firms create 72% of all net new jobs. These jobs are concentrated among firms with fewer than 100 employees. Plan to Prosper: Middle market firms are not adequately investing in succession planning Lots of baby boomers Need long time horizon EDOs Matter to the Middle Market: Economic developers’ resources & relationships matters most to MM Want assistance in m&A work Ability to expand repeatedly is common characteristic among this 1% EDO knowledge gap about M&A, complicated by the difficulty of tracking with current metrics
New JPMorgan Chase Grant: $220,000$170,000: Awarded ~$5600 to 30 companies
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BEAM Export Promotion Program
trade shows
oveseas meetings
USCS or WTCServicesother
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Presentation Notes
JPMorgan had never given grants for this purpose before they awarded us our first grant in 2014. Our grant design/structure has become the model for JPMorgan Chase in markets across the country. Grants nearly evenly split with about half of awarded companies having under $10M in annual revenue, and about 1//2 between $10.1- $30M.
• Holistic approach to company scaling, growth, longevity– New questions – More data tracking– More proactive referrals
• Focus on succession planning– Training for BEAM region organizations – New partnerships for company education
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Revamped Approach:Business Retention & Expansion
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Presentation Notes
Partnership SBDC & ARGI Support companies to ascend into and within the MM. Repeated, incremental growth is crucial. Foster communication among stakeholders throughout the region Strengthen the MM from all sides: expansion, exports, acquisition, new generation Act to address signs of stagnation & decline Help economic developers be aware and prepared
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Middle Market Succession & Exit Planning
• Strong companies have good options about how to grow:
• Transition within the family• Acquisition by larger firm• Sale to PE• ESOP
• If a company wants to sell: • Sell strong.• Stay here. • Grow here.
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Presentation Notes
One of outcomes of FDI plan was realization of importance of M&A. Prevalence in FDI. Importance in life cycle of many companies. Increasingly important as generation of baby boomer owned companies come to decision points about the future of their companies. Foundational requirements are the same for selling, for passing to the next generation, for a successful ESOP. We want companies prepared to have the luxury of good options when the time comes to open the next chapter in that company’s lifespan. Support companies to ascend into and within the MM. Foster communication among stakeholders throughout the region Strengthen the MM from all sides: expansion, exports, acquisition, new generation Act to address signs of stagnation & decline Help economic developers be aware and prepared Make the case to acquiring companies to stay and grow here. Help company locations make the case to HQ.
• UK, Netherlands, Canada
• Fostering Performance in Established and Emerging Industry Sectors
• Metropolitan leadership to maximize contribution to Kentucky’s overall performance
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Targeted Focus on Key International Markets
Presenter
Presentation Notes
Partnership SBDC & ARGI Support companies to ascend into and within the MM. Repeated, incremental growth is crucial. Foster communication among stakeholders throughout the region Strengthen the MM from all sides: expansion, exports, acquisition, new generation Act to address signs of stagnation & decline Help economic developers be aware and prepared
