Any conversation about FDI with the Washington State Department of Commerce has to be led by that huge FDI magnet: the aerospace sector. However, Allison Clark, Managing Director for Business Development and FDI, is emphatic that there are all sorts of great FDI initiatives thriving alongside the aerospace industry in her state. Jo Murray speaks to her.
Not many locations can brag a company like Boeing located in their back yard. Call it a manufacturer, a technology company, a service company or simply top tier of a supply chain, The Boeing Company is a huge determiner of the Washington state economy. Based in Renton, where much of the local narrow-body production takes place, Boeing also has a wide-body facility in Everett, also in Washington. More than 40,000 employees, customers and suppliers visit Boeing’s Everett manufacturing site daily. The factory is home to the 747-8, 767, 777, 787 Dreamliner, the KC-46 Tanker and several derivative programs. Building renovations and new construction tell a tale of continuous improvement and transformation – including the 1.3 million square foot (120,800 square meter) Composite Wing Center.
There is so much going on at Boeing it is hard to know where to start. The 777 MAX, 737 MAX and the 787-10 Dreamliner are where most of the technological advancements are at; but there is also a new phase to the Boeing story kicking off with the announcement that maintenance, repair and overhaul will be increasingly on the Boeing agenda going forward.
“Around 90% of Boeing manufacture is in Washington,” points out Allison, “and we continue to attract companies to this supply chain.” There are around 1,400 aerospace-related companies located in the state and around the same number of aircraft and UAVs produced annually. A total of 136,100 skilled aerospace workers are engaged in Washington state, working on aero-structures, avionics, tooling, composites and the like.
“But we have fingers in lots of pies,” says Allison. “Space is a huge and growing market for us. Lots of space companies have a footprint here.” And, of course, there is a large crossover between sectors and sub-sectors. For example, space, aviation, defense and most of the other sectors present in Washington interact with the technology sector, all feeding off each other and bringing new solutions to the market. There is also a crossover between aerospace and cleantech – in terms of the investigation into biofuels, and the manufacture of composites and their recycling. In fact, a total of 100+ clean technology companies operate in the state, employing 92,000. And, let’s not forget, today, a massive 73% of Washington state power comes from renewable energy.
Advanced materials manufacturing is also a mainstay of the state’s economy and feeds into a number of sectors – aerospace, defence, automotive, cleantech, and others. There are 90 companies specialising in advanced materials and composites in the state, producing a total of $3.3 billion annual revenue and employing 230 materials scientists. SGL Automotive Carbon Fibres stands out as an anchor company in this sector. It opened in 2010 and is already undergoing its third expansion. It is the world’s largest carbon fiber manufacturing site and produces carbon fiber reinforced plastics for BMW’s family of i-electric and plug-in hybrid cars.
Further cluster-based sectors are vital to the local economy, such as agriculture and food manufacturing. “We are a top producer of apples, hay, wine, barley and potatoes,” Allison confirms. “Two significant value-added agriculture companies in Washington include Lamb Weston and JR Simplot. Lamb Weston recently underwent a very large expansion in the state, and JR Simplot has the existing and original contract to supply McDonald’s with their frozen French fries worldwide.”
Forest products are another key industry; and so is the maritime sector. “A large fishing fleet is housed here,” says Allison. “We also have a robust boat-building industry.” The maritime industry has spawned its own renewables, cleantech and ICT industries, including the production of electric boats, R&D into renewable fuels and the development of sonar technology.
Information and Communication Technology interacts with all the other sectors but also exists on its own merits. “Large ICT corporates such as Microsoft, Amazon and Expedia started here,” she says, “and they have attracted others. We are the second largest tech market after Silicon Valley and we shine across the board: software, engineering, hardware, wearable devices, amongst other specialisms.”
She continues: “Tech companies such as Google, Facebook, Alibaba and Best Buy have to have a presence here in order for them to compete and tap into the workforce.”
Amongst all this tech there is also a life sciences and global health research base – including the Bill and Melinda Gates Foundation – and a medical devices industry. The life sciences and global health sector boasts 800+ organisations located in the state, employing 36,000 skilled workers and attracting $904.8 million in NIH grants.
FDI into Washington comes largely from the same locations as FDI into the US generally. Canada, Japan and the UK lead the pack (in terms of investment into Washington), followed by France, Germany, Switzerland, Sweden, the Netherlands and Australia. The Washington State Department of Commerce attributes this investment to a strong diverse economy, access to ports, and equidistance from European and Asian markets.
“We have a robust business recruitment pipeline. We are currently working on 109 active projects representing the possibility of 13,000 new jobs and $6.19 billion of capital investment. Of these, 55 are FDI projects representing 5,000 possible new jobs and upwards of $2.86 billion in capital investment for the state,” says Allison.
Foreign companies employ a total of 112,700 workers – which represents 4.1% of the state’s private sector workforce. A total of 32% of these jobs are in manufacturing. Workforce development is an ongoing theme in any conversation with the Washington State Department of Commerce; with universities, R&D centres and a vibrant community college all contributing to the talent pool.
Coming through loud and clear is that Washington state’s economy sings out across the US and internationally. The state’s products have propelled passengers and freight across the world, it has quenched the world’s thirst through the Starbucks brand; and it has kept us in a plethora of computer code. It is also at the forefront of research into global health, renewables, clean technology and maritime technology. Those big corporate names occur time and again…this is a location with a lot of brand value.