For the past two decades, North American Investment Promotion Agencies (IPAs) have cast their nets far and wide. With a particular focus on Asia and the Middle East, US and Canadian states and provinces have been scouring the globe for Foreign Direct Investment (FDI). They've established dozens of subnational international offices, including many in China, and led a continuous procession of governors and premiers aiming to attract investment, solidifying hundreds of MoUs while navigating unfamiliar cultures and local liquors.
Today, that all appears to be just a hazy memory and not just because of the Baijiu shots. Increasing geopolitical tensions, the COVID-19 pandemic, and worldwide conflicts have shifted the international economic landscape. Protectionist policies have become more prevalent, fracturing global trade into blocs. According to data analyzed by the International Monetary Fund (IMF), new restrictions on goods, services, and investment surged by 14% in 2022, surpassing 2,600 measures. Notably, investment restrictions experienced a fourfold increase, reaching a total of 239 measures in 2022. The fallout is clear: for businesses with an international strategy and regions aiming to attract investment, uncertainty has become a constant.
So, where does that leave Investment Promotion Agencies? It's imperative to stay engaged in global markets, but the current reality accentuates the need for robust, stable partnerships. And one of the most enduring and fruitful relationships remains underexplored: that between the US and Canada.
While these (mostly) friendly neighbors already boast a thriving economic relationship, certain gaps remain. A startling statistic from the Boston Consulting Group serves to illustrate this: only 1% of Vancouver’s LinkedIn members have connections to members in Greater Seattle, and vice versa. Despite their geographical proximity, shared focus on tech industries, and mutual love for coffee shops and scenic sea-side strolls, these two cities remain surprisingly disconnected.
In fact there are tremendous opportunities for mutual growth between US states and Canadian provinces willing to put in the effort.
Atlantic Canada and Oregon are both leaders in the burgeoning blue economy and maritime tech sector. By sharing knowledge and resources, they could innovate and implement sustainable marine practices, generate job growth, and strengthen their global position in the maritime industry.
Another compelling partnership is between Alberta and Texas. While Texas has traditionally viewed Alberta through an oil and gas lens, Alberta's dynamic agri-food sector, burgeoning clean technology industry, and vibrant startup scene hint at vast untapped potential. Texas businesses could unlock new avenues for collaboration and diversify their economic interactions beyond the energy sector.
Lastly, take the potential synergy between the agricultural-led economies of Saskatchewan and Missouri. Although Saskatchewan has established offices in global hubs like Dubai and Shanghai, it may find there’s greater synergy between St. Louis and Saskatoon. Missouri, one of the leading agtech hubs globally, could present Saskatchewan with a long list of company expansion and FDI targets. In turn, Missouri could benefit from Saskatchewan's innovative farming practices and growing plant-based protein expertise.
However, these US-Canada pairs are only the beginning. The potential for beneficial partnerships extends beyond these borders and into Central America, the Caribbean, and South America.
Costa Rica, for example, is thriving with MedTech investment from the US, showing how mutual engagement can foster growth and innovation in the health tech sector. Meanwhile, the US Virgin Islands offer major tax incentives for US companies seeking software talent. This initiative has created an attractive environment for tech startups and established firms alike.
Mexico's Guadalajara is another city that comes up frequently in discussions about emerging tech hubs. This metropolis, bolstered by favorable demographics and cost structures, coupled with California's established tech sector, could form a new tech powerhouse on the North American continent.
Venturing even further south, we find Chile's ambitious plan to public-private partnership (PPP) their lithium supply. This initiative aligns well with British Columbia's advanced mining tech and lithium batteries industry, opening avenues for potential collaboration.
These examples demonstrate that our next door neighbor could be our most promising partner. Instead of seeking out unpredictable, far-flung relationships, a renewed focus on familiar ground could be the way forward. By enhancing connections in the Americas, we could further stabilize our economic landscape, drive growth in key sectors, and foster relationships that could weather the vagaries of the global political climate.
In the end, the most rewarding partnerships may be found not across oceans but across borders. They might be closer than we think, waiting to be discovered over a shared cup of locally roasted coffee, and proving that, indeed, sometimes, the grass is greener on our own side of the fence.