Foreign Direct Investment (FDI) in Canada: US trade megatrend and knowledge-based reality
May 9, 2013 By Nathan Rudyk
A Statistics Canada report released today, titled Foreign Direct Investment 2012, underlines why the market2world team spends a lot of time with our clients thinking about how our nation can tell a better story to attract more Foreign Direct Investment (FDI).
Consider Canada City Alliance Inc. trilingual Web site, messaging and PR campaign by market2world communications inc.
In the past few months we've publicized a Consider Canada City Alliance investment and trade mission to China, an Ontario Clean Technology Alliance mission to Germany, an Ontario Technology Corridor mission to Brazil, and an Ontario Food Cluster mission to France.
We also get to celebrate Canadian Foreign Direct Investment results including:
- Why world-leading digital media companies like Google, Electronic Arts, Gameloft and Arkadium have set up shop here, attracted by a unique Canadian blend of smart people, smart tax incentives and other smart, entrepreneurial companies
- A German pizza-making plant by Dr. Oetker that will create 120 full-time manufacturing jobs and contribute an estimated $26 million a year to the Ontario agri-food industry
- How the right combination of talent, vision and policy has convinced more than 30 renewable energy companies from around the globe to locate or expand in Ontario's 31,000-job, $27 billion (so far) clean technology sector
- An initial $10 million investment in an Ottawa technology incubation centre by China's $11 billion Zhongguancun Development Group (ZDG)
Today's Statscan report on FDI into Canada underlines two key trends:
1. "While the United States remains by far the largest foreign direct investor in Canada, the past decade has seen a gradual decline in that country's share of direct investment in Canada from 64.9% in 2002 to 51.5% in 2012."
In other words, the push to capture FDI dollars from countries beyond our powerful neighbour to the South is well placed. The megatrend is more globally diversified trade flows. For example, as we pointed out in our April 2013 press release for the Consider Canada City Alliance, with a 2012 total of $21.3 billion, Canada is now the lead country in the world for Chinese outward bound direct investment, outpacing the second place U.S. by $7 billion and more than double Chinese investment in Australia – the country widely perceived as the biggest beneficiary of Chinese investment flows. Oh Canada, not so anymore!
2. "The finance, insurance and management industries also accounted for a significant share of foreign direct investment in Canada with 32.6% of total investment in 2012. The manufacturing sector remained a significant destination of foreign direct investment in 2012 with a 28.7% share, while the mining and oil and gas extraction industry accounting for a further 19.0%."
In other words, while minerals, oil and gas, and other natural resources investments are important, it's our knowledge-based sectors, i.e. our people, not our rocks and bitumen deposits, that are attracting the lion's share of FDI into Canada.
As one our clients blogged recently, "The question remains, how do we take full value of the potential?" One way is to relentlessly, engagingly and thoroughly tell our story. In other words, market2world!
Nathan Rudyk is President and CEO with market2world communications inc., the public relations and marketing agency for global innovators.)
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