GLOBAL TRADE SUPPORTING ARIZONA GROWTH
February 27, 2018
CEO/Founder, Global Chamber®
With 85 percent of business growth happening outside of the U.S., and 99.7 percent of new business outside Arizona, more companies and communities are understanding the opportunity shifts and accessing new global opportunities.
In January 2018, Jeanine Jerkovic, Director of Economic Development for the City of Surprise, delivered the International Report Card for Metro Phoenix as part of the International State of the Metro by Global Chamber Phoenix. Jeanine shared good news: more regional businesses are taking advantage of global business opportunities in our state – and growing.
Arizona has come a long way. Historically, Arizona has made slower progress with international trade compared to most coastal states and other regions, including Colorado and Illinois. Those states along with Florida, New York, Texas and California have higher exports per capita and foreign direct investment (FDI). Exports and FDI currently support approximately 190,000 jobs in Arizona. If our state delivered global business opportunities like the other states noted, another 100,000 jobs could be created. There is no doubt there are direct employment benefits when looking outside of our state’s borders
Many regional businesses see the opportunity of tapping into the global pool and they are now bringing money back to Metro Phoenix in export dollars, foreign direct investment and tourism. As a result, Arizona’s recent trade report card of B+ improved from four years ago when the region was at best a B-.
Exports from Metro Phoenix have grown to $12.8 billion per year, with top export markets in Mexico, Canada, China, the U.K., Germany, Singapore, Japan and Thailand. Some regional export success stories that are directly creating Arizona jobs include BioHumaNetics which is growing aggressively in Latin America, Wisdom Natural Brands, a recent winner of a national U.S. export award and GlobalMed Telemedicine, a company gaining significant international contracts.
Foreign direct investments are on the rise in Metro Phoenix including IRIS USA from Japan in Surprise and in Phoenix, Scientex from Malaysia as well as Zummit Plastics from Mexico. These international companies are making a significant impact on promoting further regional foreign investment growth for Arizona. Some cities such as Surprise, Phoenix and Tempe have global programs in place to increase exposure to foreign investors, while Valley leaders continue to meet with other countries to foster future growth and success.
At the same time, commercial real estate companies are working with local businesses on expansion that have a global component. Recent examples include the 618,000 sq. ft. deal signed by UPS as a distribution hub for e-commerce, as well as McKesson Corporation expanding to a new Scottsdale location increasing their presence in the local market, driven by global growth. As our global presence becomes more prominent, the culture of transactions and the commercial world is changing. Forward thinking developers and contractors will benefit from adapting to new economic imperatives.
The recent announcement of Bill Gates’ development of the new City of Belmont near Buckeye will have major global implications. The new city will identify Greater Phoenix as a cutting-edge place to build a city of the future and our ability to support this kind of growth that can revolutionize developments across the country as well as globally.
Tapping into global opportunities is making a difference in the Metro Phoenix economy and future growth of the area – impacting the job and housing markets. According to the National Association of Realtors home sales in the U.S. skyrocketed in 2017 and Arizona is highlighted as one of the top 5 states for foreign buyers with Florida, Texas, California and New Jersey. Total sales of $153 billion, a 49 percent increase from 2016, with top investment groups from China, Canada, UK, Mexico and India.
Our state has more work to do with export and foreign investments, but the efforts already underway by most mayors and businesses in changing culture, fostering a welcoming business environment and a focused approach to expanding our global presence to gain access to new opporutunities will foster growth for years to come.
Note: Commetaries from Rod Beach, Principal of Cresa, Renee Ervanian of Hieple Travers Realty, Paul Blum of West USA Commercial, Anita Verma-Lallian of Vermaland and Maha Kapageridis of Berkshire Hathaway Homeservices Arizona were used for real estate information.
Doug Bruhnke is the CEO and founder of Global Chamber, a growing and collaborating community of CEOs, executives and leaders in 525 metro regions around the world, helping companies and communities gain access to global growth opportunities. Global Chamber is headquartered in Greater Phoenix. Doug can be reached at email@example.com.