MCALLEN, RGV – An economic development leader in the Rio Grande Valley flew to Germany on Thursday to attend the Hannover Fair and strengthen relationships with European site selectors.
Matt Ruszczak, executive director of Rio South Texas Economic Council, flew from McAllen to Houston and then got an intercontinental flight to Frankfurt, Germany.
A couple of months ago, he and RSTEC invited five site selectors from Germany to tour the Valley. The clients of the site selectors were European manufacturing firms interested in investing in the U.S.
Language issues will not be a problem for Ruszczak in Germany. He was born in Poland, raised in Germany, and speaks five languages.
“I am excited about visiting Germany to see the site selectors again. It is all about building relationships. We are looking to secure more European investment in the Valley,” Ruszczak told the Rio Grande Guardian, before flying out.
Asked how the visit by the five site selectors went, Ruszczak said: “I think they were impressed with how investment-ready our region is, and how truly active our international trade is. The Fam (Familiarization)Tour was the first step in a process. Now I am going to visit with these specific site selectors in Germany, visit some of their clients and attend a few trade shows. The Hannover Messe (Fair) is the largest manufacturing show in the world.”
In an RGG LIVE event on Facebook, Ruszczak pointed out that direct foreign investment from Europe is huge for the United States but that, historically, the Valley has not focused on capturing much of it. Citing 2015 statistics from Select USA, Ruszczak said foreign direct investment was worth $57 billion and approximately seven million jobs in the U.S.
“Foreign direct investment contributes heavily to innovation. These foreign companies contribute heavily to U.S. exports,” Ruszczak said.
He noted that Texas is a key destination for many foreign companies.
“There are approximately 600,000 jobs associated with foreign direct investment in Texas. As a state we are already a destination for foreign direct investment, and we strongly believe the Rio South Texas region can become one of the best destinations for that investment.”
Foreign direct investment can come from all over the world, Asia, Africa, Latin America, etc. Asked why the focus on European foreign direct investment, Ruszczak said: “”Well, look at the statistics. Out of the top 15 countries for foreign direct investment, nine of them are European.”
In fact, Ruszczak said, U.K. companies contribute $600 billion in foreign direct investment. That represents 16.1 percent of the total. “Combined, Europe contributes 56 percent of direct investment. Europe has by far the largest share. It is a really big space with wide opportunities.”
By comparison, Asia makes up only around 16 percent of foreign direct investment, the RSTEC leader said.
“So, while investment from China, Korea and Japan is significant and very relevant to many areas in the U.S., including ours, the big piece of the pie lies in Europe. We believe there is an opportunity for the Rio Grande Valley, which has only seen limited investment from Europe, to grow that investment, and get a bigger piece of that economic development pie,” Ruszczak said.
“The goal for the Rio South Texas Economic Council is to compete and to attract more foreign direct investment from Europe. They make up the lion’s share of investment but only a small percentage of the investment in our region. We are looking to rectify the discrepancy and strengthen the region’s economy by attracting some of these European investors.”
All five of the site selectors that visited the Valley are associated with the European American Investment Council, a group that specifically assists European manufacturing companies to expand in or relocate to the United States.
“This is why we brought these site selectors to our region. We brought them here to put our region on the map,” Ruszczak said. “When you look at economic development, it is a long term process. It all starts with the first handshake and it ends with a ribbon-cutting when the facility gets opened. That timeline can quite long, anywhere from a couple to ten years.”
Ruszczak said RSTEC plans to host another “Fam Tour” with different site selectors early next year.