State Economic Development & International Investment: Virginia & Globalization

Abstract

The field of economic development has undergone a tidal shift, yet state organizations and strategies have not adjusted accordingly. Growth is not coming from the domestic economy. Future growth is in the global marketplace. Foreign firms and countries have significant liquidity. In the current global economic crisis, the optimum approach for state economic development is to focus on attracting foreign investment. Given the rise of actual or perceived protectionist barriers in the United States, foreign firms will want to avoid these risks. Today’s situation is similar to that in the 1980s, when Japanese and other foreign auto manufacturers began to locate throughout the southeastern United States. As a result of the global economic crisis, there is now a shift of greater economic power to Washington, which is helping to create a true global city with unprecedented commercial significance. Foreign firms will want to be close to this nexus of global economic and business power. A declining dollar is an additional incentive for foreign firms to establish operations. The Virginia Economic Development Partnership (VEDP) is the principal government entity in Virginia that is responsible for economic development. Through the International Division, the focus is on export promotion and foreign direct investment (attracting foreign firms to relocate to the Commonwealth).If Virginia intends to “embrace globalization,” the Commonwealth must reorganize its domestic efforts and formulate new strategies. It needs to take advantage of its local assets (universities and foreign students in the Commonwealth). For example, to have the Virginia universities to better cooperate among themselves and with the state government. Globalization will be embraced by leveraging local assets. Embracing globalization increases local transactions, economic development and jobs. There is a need to revitalize the Virginia Economic Development Partnership by making it a truly public-private partnership. This requires meaningful private sector participation, which would include finding new ways for the private sector to more deeply support and cooperate with the Commonwealth of Virginia.