Business and Commerce Committee
FDI Report 2019 Announced
The 2019 edition of the Foreign Direct Investment (FDI) Report for Southern California was presented at the Select LA International Investment Summit on June 6th. JBA sponsored the preparation of this report again this year. In regards to direct investment, Japan once again ranked first in generating the greatest number of jobs, businesses, and wages.
Select LA Foreign Direct Investment Award goes to American Honda Corporation
World Trade Center Los Angeles (WTCLA), a subsidiary of one of JBA’s partner organizations, Los Angeles County Economic Development Corporation (LAEDC), hosted this year’s Select LA International Investment Summit in Downtown Los Angeles over the course of two days on June 5th and 6th. The event introduces trade trends in Southern California as well as direct investment opportunities and market trends in Los Angeles County, and many local and foreign business leaders attend every year. From JBA, Vice Chair of the Business and Commerce Committee Noriyuki Sakai, Committee Member Midori Morooka, and Executive Director Yoshinobu Fukushima attended.
On the second day of the event, the “Foreign Direct Investment in Southern California 2019” (FDI) Report was announced. The report is a summary of data on Southern California’s foreign investment and activities such as trade from 2018. In recognizing the importance of data showing the contribution level of Japanese companies to Southern California, JBA has been sponsoring the report’s preparation annually.
Also, at Select LA, the Foreign Direct Investment Award is presented to the company that made tremendous contribution in the Southern California region. This year’s winner was American Honda Corporation. In his acceptance speech, company spokesman Marcos Frommer said, “The history of Honda North America began as a small office in Los Angeles. We started with the sales of motorcycles which then led to cars and now we even handle jet planes. We express our gratitude to the Los Angeles region, which has been our company’s starting point, for the fact that a small business like ours was able to grow into such a large American dream with continued effort.”
Mayor Garcetti speaks fervently on the reason for investing in LA
Next up onstage, LA Mayor Eric Garcetti, marking his fifth year in a row to attend Select LA, spoke fervently on the superiority of LA as an investment destination. “LA isn’t just another American city, but an extremely global city. There are several factors that make LA a global city. First is the astounding achievement in terms of foreign direct investment as the numbers show. In 2018, foreign direct investment resulted in approximately 200,000 workers, approximately 500 companies, and $15.2 billion worth in wages. Next is the existence of the LA International Airport. LAX is one of the busiest airports in the nation in terms of the number of flights flying in and out, and ranks fourth in the world. Third is having the Port of LA, the nation’s busiest container port. Further, large scale construction projects are underway, mainly in the Downtown area, in preparation for the 2028 Olympics and Paralympics. Once construction of these projects is completed, we can expect the strength of the city to be further enhanced. Moreover, the Olympics are not just another sports tournament. It’s held with world peace as its mission. Likewise, it can be said that LA is a city that represents world peace and mutual understanding. With people of various races and cultural backgrounds gathered from all over the world, LA is a place where anyone can feel like they are part of the community. A Korean food truck serves a fusion of Korean and Mexican food, which is enjoyed by customers of various backgrounds. This is the LA-scene. Business is to be done here in LA.”
Foreign direct investment in Southern California
Japan ranks first in all categories 4 years in a row
The FDI Report was introduced by the publisher of Los Angeles Business Journal Anna Magzanyan. The report collects data from activities of foreign businesses in 6 Southern California counties (Los Angeles, Orange County, San Bernardino County, Riverside, Ventura, and San Diego) in terms of employment numbers, number of companies, and wages. With 81,751 people employed, 2,407 companies, and over 6 billion 186 million dollars generated, Japan placed first in all three categories for the fourth year in a row. However, these numbers show a 6.3% decrease in employment numbers and 2.4% decrease in numbers of company compared to before. The chart on the next page shows the top 10 countries in regards to employment numbers. Canada, which ranked 4th last year, switched places with France to become 3rd. Furthermore, Taiwan, did not make the top 10 last year, ranked 10th, and the Netherlands, which placed 10th last year, dropped to 13th.
Although the number of employment and companies have slightly declined, results show that Japanese companies still lead far ahead of 2nd place England in all categories.
WTCLA Stephen Cheung “Japanese companies should increase their communication power”
During a break, Business and Commerce Committee Vice Chair Sakai conducted a one on one interview with WTCLA President Cheung. His first question was “Even though Japanese companies are making the biggest contributions to Southern California, local people and politicians have not grasped the fact. How could we get this fact acknowledged?” To this Cheung replied, “It’s important to increase communication power. The impact will be stronger if it comes from a 3rd party rather than yourself. We already understand the importance of contributions made by Japanese companies from the FDI Report. These figures should be utilized. At the same time, this fact should be acknowledged from within the Japanese American community and then communicated outwardly. I think the accumulation of such efforts will lead to politicians recognizing the impact Japanese companies have on LA and Southern California.”
When asked, “For Japanese companies interested in opening a new business base in or moving to LA, what are appealing factors the area has to offer?” Cheung replied, “I can think of two. One is the variety of opportunities. Not only are numerous industries already blooming in LA, simultaneously, there are new opportunities for growth in the transportation sector as well as gaming, sports and entertainment. Second is the diversity of people. In U.S. history, there are bad things happening along with the good. The world must feel that America has become less open to those born in foreign countries. However, LA is an international land. As Mayor Garcetti stated ‘our culture is your culture.’ It is assumed that people bring their family and colleagues from their motherland when they come to do business in LA from foreign countries. Here, we welcome you as a member of the local business world. There is no need to feel alienated here.”
Lastly, Cheung delivered the following message to Japanese companies: “Currently, LA is entering a period of economic recovery. However, there isn’t enough supply locally to fulfill the demand. That’s why foreign investments are crucial. Let’s achieve our goals together. $122 billion transit project is underway. The latest technology is needed for building the new LA Rams stadium. We’d like Japanese companies to actively participate in these projects. This period won’t last forever. We hope Japanese companies seize the opportunity to penetrate the LA market.”
“Want to raise awareness of the existence of Japanese companies” Business and Commerce Committee Vice Chair Sakai
The announcement of this year’s FDI Report has once again revealed the height of the level of contribution Japanese companies make to Southern California. Based on these results, Business and Commerce Committee Vice Chair Sakai spoke on the importance of LA to Japanese companies in the following way: “Japanese companies are able to do business today thanks to the achievements of our predecessors and their descendants. With the Port of LA, Port of Long Beach, and LA International Airport, it is a gateway for the flow of goods and people, and thus significant as a functional base for Japanese companies to expand overseas. Additionally, Greater LA is a place of living for 18.7 million consumers and makes it possible to do business among a diverse population. Furthermore, it is a place where high level talent can we easily acquired, such as from Caltech, and with Silicon Valley to the north and Silicon Beach to the south, is on the verge of becoming the center of a Fourth Industrial Revolution that will be brought about by IoT and AI. New technological innovation will be created out of the fusion of industrial revolution and existing industries, with new business models being formed one after another, I feel that the region will continue to be an important location for Japanese companies.”
Also, just as he had asked in his question to Cheung, he spoke in regards to how to transmit to society the great economic contribution Japanese companies make to Southern California, “I feel that it is important to work with local partners such as WTC and LAEDC to communicate in an objective and specific manner Japanese companies’ regional contribution and business presence, including the number of companies, employment, and examples of solving local issues. I also believe that it will be important not only to contribute economically but also to focus on activities that give back to the local community as a member of that community.” He concluded that he would like to deepen friendly relations with local economic, political, educational and cultural organizations such as WTC and LAEDC.
This year’s winning company was American Honda Corporation. . “Honda America started in LA” stated Frommer.
“LA is a diverse place. Our culture is your culture,” spoke Mayor Garcetti in his speech
Group photo of JBA participants with WTCLA President Stephen Cheung at center
Consul General in Los Angeles Akira Chiba participated in a panel discussion with Consul Generals from Canada and Germany (second from left)
SOUTHERN CALIFORNIA: FOREIGN-OWNED ENTERPRISES (FOEs)
|Rank||Country||Jobs||% of all
|Firms||Est. Wages ($millions)|
(Data: WTCLA “Foreign Direct Investment in Southern California 2019”)