So much analysis carried out for FDI purposes is sector specific. A generation ago this sector-specific work was largely focused on industries and services; today the bright new shiny sectors – largely tech in all its sub-divisions, and life sciences – take centre stage for FDI thought-leadership. But, in Chicago, FDI activities revolve around global collaborative initiatives ahead of sectors. Jo Murray asks Andrew Spinelli, Director Global Strategic Initiatives at World Business Chicago, what this means.
It is so easy for whole sectors to fall between the cracks when FDI strategies are sector-specific. Put resources behind biotech, fintech and artificial intelligence, and the huge employers of traditional industries are left to their own devices. How often in 2017 are engineering and manufacturing put centre stage?
World Business Chicago will not be drawn on sector-only planning – albeit that some initiatives are naturally sector-related. Chicago’s FDI strategy is all about global strategic initiatives that embrace all sectors, all company sizes, and new as well as established enterprises.
Andrew Spinelli traces this inclusive approach to the coming into office of Mayor Rahm Emanuel in 2011 and his subsequent re-election in 2015. The Brookings Institutions’ Global Cities Initiative has also been highly influential in forming Chicago’s FDI strategy. Participation in this initiative led, as a first step, to the signing of an economic partnership agreement between Chicago and Mexico City. A subsequent review of the City of Chicago’s assets was undertaken which revealed the extent of the city’s huge economic diversity.
Companies, sectors, universities and everything that goes with them were included in the review, and analysis was carried out to determine how a better business environment could be created by bringing all these elements together – and working in partnership with Mexico City. Barriers were broken down on both sides and three co-operative agreements have been signed by the two cities.
As part of that initiative, Mexico City led a 50-person delegation to Chicago where largely retail and technology achievements in the city were showcased; this was followed by a return delegation to Mexico City last year to visit incubators and build connections. “Success is coming from that initiative,” confirms Andrew. In fact, KidZania, located in Mexico City, is already setting up an operation in one Chicago’s suburbs – the first achievement of this exercise. KidZania is an interactive kids’ city combining fun, and learning through role-play for children. It is headquartered in Mexico City and is privately held.
The second initiative that exemplifies Chicago’s FDI strategy is the work the city is doing with the Chinese Ministry of Commerce. Mayor Emanuel, during a trip to Beijing, signed an agreement with the Chinese Ministry of Commerce to link the eight largest cities in China to Chicago. “This MoU has been incredibly successful,” says Andrew. “There has been a record-breaking number of investments since signing that agreement. The Ministry of Commerce has been a fantastic partner.”
In 2014, one year after signing the agreement, Chicago played host to the US-China Joint Commission on Commerce and Trade, aimed at boosting trade and investment between the countries and resolving trade disputes. A total of 300 attendees from China arrived in Chicago which had the effect of engaging Chicago’s business sector and not just local government.
Following the arrival of the delegation, China’s Wanda Group announced that it would invest $900 million in building Chicago’s third tallest building. The site is in the Lakeshore East development in downtown Chicago.
Further, Chicago Transport Authority (CTA) has accepted China’s CRRC Corp’s $1.3 billion bid to build 846 7000-series rail cars for the city. Chicago has placed a firm order for 400 cars, with options to buy the remainder in the future. A new $40 million factory will be built with a view to the first cars going into service in 2020. “This means there are 175 final assembly jobs coming to an area historically connected with rail cars,” says Andrew.
Further, Bank of China has increased its presence in Chicago and there are an increased number of China/Chicago flights departing and arriving at O’Hare.
The third initiative that illustrates Chicago’s FDI strategy is that between Chicago and London. London Mayor Sadiq Kahn and London & Partners have had much to do with this. Tech is booming in both London and Chicago, there is an abundance of incubators and accelerators in both cities, and events promoting tech’s sub-sectors are blossoming on both sides of the ocean. Another MoU has been signed and delegations have visited both cities. The collaboration and understanding between the two locations is already bearing fruit.
Just recently, Mayor Emanuel announced iam bank has named Chicago its global headquarters.
Founded by CEO Lee Travers, the currently London-based bank plans to grow to 35
employees in downtown Chicago over the next few months. iam bank is a new bank founded by Lee Travers, an Irish entrepreneur.
“Chicago’s unparalleled access to transportation and talent give growing companies like
iam bank the tools they need to thrive,” Mayor Emanuel said. “I welcome iam bank and look
forward to seeing them grow right here in their new home in the city of Chicago.”
By the same token, Trustwave, a Chicago-based cyber-security company, has set up its EMEA headquarters in London. The traffic is not all one way.
When asked about the competitive aspects about FDI work and the potential conflict that can occur between partnering and competing with other cities, Andrew says: “Collaboration and partnerships are valuable. Ultimately, companies will invest where they choose to do so. Meanwhile we all must make our cities as attractive as possible. We work in good faith with all partners so we can build trust and have partners we can call on in those cities.”
He observes that cities around the world are moving in this direction – relationships built out of respect are thriving. “Competition? Yes,” he says, “but we also make sure friendships are strong.”
Chicago has built a diverse economy which Andrew says is one of its strengths. “The sectoral approach can be narrow,” he adds. “When we work with China, we do not limit the opportunities. In London, it is natural to talk about tech but that does not preclude other conversations.”
Nevertheless, FDI success in Chicago is still measured along traditional lines: the number of jobs and projects generated; and the raising of the city’s profile. Ultimately, FDI work is still largely a numbers game and the greater the engagement the more likely it is that investment will follow.
“We have a really poignant story to tell,” says Andrew. “And telling that story around the world is making an impact.”