Achieving Long-term Competitive Advantage

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Achieving Long-term Competitive Advantage
Presented to Regional Border Economic
Development Forum San Diego, CA
Lorna H. Wallace, Research Fellow
Regional Economics [phone] www.milkeninst
itute.org February 24, 2006
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Determinants of Inbound Foreign Direct Investment
(FDI)
1. Market Access
2. Labor availability and quality (not simply
low labor costs)
3. Infrastructure
4. Regulatory Environment
5. Incentives
6. Information Availability
7. Quality of Life
8. Clusters of Firm Activities
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Foreign Direct Investment in the U.S. Top 10
States by Employment, 2003
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Foreign Direct Investment in California
Employment, 1999-2003
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Origin of FDI Baja California
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California Exports to Mexico 1997-2003
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California Exports to Top 10 Countries Ranked
by 2004 Value, US Billions
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Most Attractive Global Business Locations
Responses from Multinational Enterprise Executives
1. China (87)
2. India (51)
3. United States (51)
4. Russian Federation (33)
5. Brazil (20)
6. Mexico (16)
7. Germany (13)
8. United Kingdom (13)
9. Thailand (11)
10. Canada (7)
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Internationalization of RD

• In 1993, Motorola established the 1st
  foreign-owned RD lab in China

• The Indian RD activities of General Electric
  employs some 2,400 workers

• In the Baja California Electronics and Automotive
  Manufacturing Cluster

• More than 25 of the plants surveyed were engaged
  in RD

• 1/5th did product design

• More than 1/10th had developed a patent

• More than 1/3rd had ISO 9002 Certification

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In Conclusion
In conclusion, the issue of competitiveness is
very much en vogue.
Is northern Mexico/southern California a
desirable global platform?
How does the Border Region measure up re 8
Determinants of fdi?
Isabela Project innovative sources of financing
for small business owners.
Increasingly economic development means the
ability to attract and retain high-quality jobs
in high-tech growth industries all of which
demand well-trained human capital.