I ran a poll on LinkedIn to get some perspective on how globally competitive people believe Brand America actually is. The results are pretty interesting. A total of 103 people responded.
Poll Results suggest Brand America is competitive for global FDI
Overall – Top 2 box scores suggest 53% of respondents view Brand America as above average – among the best.
Company Size – Responders in enterprises (start-ups) were the most critical of Brand America’s competitiveness with 27% of respondents rating Brand America as below average – among the worst.
Job Function – Respondents engaged in Consulting and Sales rated Brand America’s competitiveness the strongest. Marketers and Academics were guarded in their assessment.
Age – Interestingly, older respondents tended to judge Brand America’s competitiveness more harshly than younger respondents based on the Top 2 box scores (age 18 – 24 score 80%; age 55+ score 57%).
But, are the poll results consistent with the quantitative FDI inflow trend data? It depends on the way you measure it.
When it come to understanding if a location is competitive or not, the key is to select the right measurement tool (or tools). Sometimes this is difficult because the data is either hard to find or overly expensive to obtain. But, without a working measure you are like a pilot flying blind through the clouds with no instruments. You never really know if you are flying into open air space or the side of a mountain. If you have the right measure(s) it can make all the difference in your understanding of how successful your location really is in competing for capital investment.
In the case of evaluating Brand America’s competitiveness, there are a number of measurements you could consider. In the paragraphs below, I am going to cover three.
- Absolute Inward FDI dollars. Absolute numbers are just that, a straightforward ranking of how much inward FDI a country attracts in a given year. Two sources to evaluate inward FDI data by country are UNCTAD and the CIA world factbook. Both provide a country-by-country ranking of FDI inflow dollars. Based on these data sources, and how the numbers are presented, Brand America is far and away the undisputed leader in global FDI attraction. But, is that the right conclusion?
I believe the presentation of the data may be misleading. I don’t think it makes sense to compare Brand America versus Brand Poland or Brand Afganistan. I think it makes more sense to compare Brand America’s competitiveness versus Brand European Union or the developing countries of Brand Asia. If you do this, you get a very different picture from the same set of data. In 2009, Brand America is just a bit more competitive than the developing economies of Brand South America.
- Share of Inward FDI dollars. Share is a favorite measure of marketers in business because it less dependant on macroenvironmental variables. It is a measure of relative performance between competitors. In the case of Brand America, the share data tell a slightly different story than the absolute dollar picture. In 2009, Brand America is still a distant third place performer, but you also see that the dollar gains between 2006 and 2008 did not translate into gaining ground on either Brand European Union or the developing countries of Brand Asia.
- Performance Index. This UNCTAD measurement attempts to eliminate the effect of market size in determining which market is doing the best relative job of attracting FDI dollars. Based on this measurement, Brand America is ranked #115 out of 141 economies measured. This is not a performance consistent with global market leading performance.
Why is evaluating Brand America’s competitiveness for Global FDI important?
Because it directly affects how aggressively additional FDI inflow dollars are pursued. If it is generally believed, as most publications that rely on a country-by-country absolute dollar comparison suggest, that Brand America is the global leader in FDI inflow attraction, then the political will to be more aggressive in competing for those dollars will be lacking. If instead, the belief is Brand America is losing the global competition for FDI capital attraction, there will be motivation to invest in finding ways of becoming more competitive. Measurement drives behavior. It doesn’t matter if we are talking about a company, a community, or a nation.
Invest in America is part of the U.S. Department of Commerce’s International Trade Administration and was created in 2007 to help make Brand America more competitive for FDI inflow investment. The resources of Invest in America are available to help your community become more competitive for FDI dollars. If every community, region and state within Brand America can become more competitive, then in aggregate Brand America will be. I encourage you to learn more about Invest in America and how it can help you be more successful in creating economic prosperity. And, as elected officials in Washington DC begin to grapple with the nation’s budget challenges, it will be important to ensure continued support for Invest in America. I am hoping you are as uncomfortable as I am with Brand America’s share of global FDI dollars being just slightly better than the developing economies of South America. It is time to change that picture.