Go Global, Grow Local: Positioning the DC Metro Area to Tap the Global Aspiration Economy
June 18, 2012
By The 2030 Group
Hdeel Abdelhady is the founder of MassPoint Legal and Strategy Advisory PLLC, a Washington, D.C. boutique legal and strategy firm focused on international business and emerging markets in the Middle East and Africa.
As the United States monitors the continuing Eurozone financial crisis and its potentially detrimental consequences for the U.S. economy, our concern underscores a reality that presents both risk and opportunity. The world is truly globalized.
With interconnected financial markets, active cross-border trade, easily traversed borders, and confluences of regulation, global horizons are expanding. As the financial crises of the past five years have made abundantly clear, the impact of globalization is far reaching and at times unpleasant, to say the least. But on the reward side, globalization presents opportunities that are as vast as the world is wide.
From manufacturers to law firms, American enterprises are turning to foreign markets for business, both in response to domestic downturns and foreign economic growth. The DC Metro Area is teeming with law firms, but relative to other American jurisdictions, the region is not known for its industrial output. So how does the DC Metro Area fit into the global puzzle?
According to the International Trade Administration (ITA), Maryland’s and Virginia’s merchandise exports in 2011 totaled $10.9 billion and $18.9 billion respectively. Both states’ largest single export market was Canada (which is neither surprising nor unlike the export flows of other U.S. states). On the inbound investment side, according to one measure, Maryland and Virginia performed equally, with foreign investment accounting for 5.1% of each state’s total private employment in 2009. Of course the ITA summaries are snapshots of a larger and more complex national and international trade and investment picture, but there is plenty of room to improve the Metro Area’s performance on the international scene.
Beyond just traditional overseas consumer and wholesale export markets, and importantly, the DC Metro Area is well-positioned to capture opportunities created by the global aspiration economy. Emerging markets, for example, have become increasingly committed to transitioning from mere quantitative growth to true human and national development. The result is greater demand for and interest in the products, services, and know-how needed to tackle pressing developmental issues, including improvement of healthcare, telecommunications, education, and food security.
For example, India’s government recently announced that it would nearly double government spending on healthcare over the next five years. In the Middle East, oil exporting nations (and their sought after sovereign wealth funds) and others are increasing public spending on domestic development. The focus of these governments and their investment arms has shifted from purely profit driven, high profile overseas investments to financing development aspirations at home. This shift in focus creates clear opportunities for producers and exporters of knowledge-based products and services, which we have in abundance in the DC Metro Area.
On the inbound investment side, the same knowledge-based industry strengths should be leveraged to attract foreign investment in local enterprises engaged in Internet-related, telecommunications, biotech, healthcare, and other knowledge-based innovation. To state the obvious, local firms need investment and financing to succeed. And our region’s growth requires their success.
Without question, as a region and as individual jurisdictions, Maryland, Virginia and the District of Columbia possess valuable assets that should be more aggressively leveraged to create and seize opportunities created by global trends. Domestically, the region has been recognized as a leading science and technology hub, but the same recognition has not extended significantly beyond interested observers in the United States.
As a lawyer and consultant, I regularly work with U.S.- and foreign-based parties on the legal and commercial aspects of international transactions. Having lived and practiced law abroad (in Dubai, an international crossroads) and being in frequent contact with diverse parties in various time zones, I have always been struck by how little is known about the DC Metro Area. Not surprisingly, foreign interest in the DC Metro Area tends to be limited to our federal government and national monuments. This can and should change, for the benefit of regional economic growth. Global demand fueled by development aspirations presents unparalleled opportunities for the DC Metro Area.
Public officials in our region have taken steps to expand our region’s international reach, as evidenced by recent separate high level trade missions to India and Qatar by Governors O’Malley and McDonnell. These trips signal that international outreach entails more than traditional markets like Canada and the United Kingdom. Indeed, our regional vision must include key jurisdictions in the Middle East, Asia (in addition to China and Japan), Africa, and Latin America.
Beyond that, our public officials and private enterprises should consider coordinated strategies for more aggressively marketing the region overseas, to let the right parties know that the DC Metro Area offers much more than tourism and is open for responsible business and collaboration across borders. The region has the prestige, infrastructure, human and intellectual capital, and geographic positioning that can be readily harvested for local growth. It should not be a hard sell.