If Your Job Is To Attract Investments Here, Then 'Brexit' Could Hurt
If you're on the economic development team for your state, you are happy — dancing-in-the-street happy — when you can attract foreign investments.
You see a globalized world, bursting with opportunities, and you want your state to win a slice of that big pie.
But this week, that expansive worldview is facing a test in the form of a referendum in the United Kingdom — the single largest foreign investor in the U.S. economy. Money from the U.K. makes up about 15 percent of all cumulative foreign direct investment holdings in this country.
In other words, what happens in the U.K. can make a difference here. If British companies — say BP, HSBC Bank, GlaxoSmithKline, Unilever and Prudential — are making lots of money, then they can afford to invest more here.
But the U.K.'s economic future may be changing, thanks to a decision coming on Thursday. Voters throughout the United Kingdom, including England, Wales, Scotland and Northern Ireland, will decide whether to stay in the European Union, a 28-member collection of countries with deep economic and regulatory ties.
If voters say it's time to leave, then Britain will begin the process of severing many bonds with the European continent. People have been calling that outcome "Brexit."
Overwhelmingly, U.S. business leaders are pulling for the U.K. to remain. They fear such a big change might derail the U.K. economy and unravel the EU. It's easier to do business with a single, large economic entity, rather than cope with 28 different sets of rules spread over a half-billion Europeans.
Such concerns were floating in the air this week in Washington, D.C., as British investors met with state economic teams attending the two-day SelectUSA Investment Summit, sponsored by the U.S. Commerce Department. The annual event works like a speed-dating party. Each state tries its best to catch the eye of potential foreign suitors strolling the exhibit floor of the Washington Hilton.
Americans working in those booths hand out brochures (and let's be honest: candy) to attract visitors, who represent 70 foreign markets. They have good reason to work hard. Last year, this country saw a record $348 billion in foreign direct investment.
So here is a sampling of Brexit thoughts from chats with state economic development officials attending SelectUSA:
The latest polls in Britain suggest Thursday's Brexit vote is still too close to call. And if you're the betting kind, then Ladbrokes' latest odds show 3 to 1 against exiting the EU. Maybe we should have checked in with the Nevada booth to place bets.
Copyright 2020 NPR. To see more, visit https://www.npr.org.