This October, the Governor’s Office of Economic Development, EDCUtah and World Trade Center Utah will host a prominent Israeli venture capitalist and his team of scientists and financial advisors. They will be here to investigate an opportunity to relocate or open an American office in Utah for a recent investment.
GOED Managing Director Vincent Mikolay says the two-day visit is the direct result of the April trade mission Gov. Gary Herbert led to Israel and the West Bank. While in the Beehive State, the delegation will meet with government, business and education leaders to talk about Utah’s IT industry and the universities supporting it through computer science and other degrees.
“We believe if we are successful in helping him open an office in Utah, it may be the beginning of more companies from Israel showing an interest in Utah,” Mikolay says. “Establishing a network on the ground is essential to foreign companies looking to relocate or invest here. They want an ally, someone on the ground they know and trust.”
The need for that network is why GOED is leading an effort to establish Utah-Israeli and Utah-Mexico Chambers of Commerce. As Mikolay’s team from GOED’s International Trade and Diplomacy Office followed up on the trade mission to Israel, they realized there was no follow-up mechanism in place for Israeli companies to investigate Utah.
“A number of companies showed interest in Utah but had no knowledge of the state until the trade mission,” he says. “As we followed up, we heard hesitation from these companies about wanting to visit Utah and came to realize they were looking for people on the ground here that they could talk to. Naturally, they want to do business with people they know and trust.”
An Ally on the Ground
Mikolay notes that foreign companies often want one of their own to help with due diligence. They want someone they trust to help them answer questions about state tax laws, investment laws, the business climate and the state’s culture. A Chamber of Commerce, he says, would give potential investors an ally physically located in Utah and someone who could help them follow up and answer their questions.
“The chambers would not be state agencies providing them with the information, but one of their own,” he says, pointing to a prominent and successful California-Israeli Chamber of Commerce as an example.
On Oct. 24, during the Mexico Business Conference at Utah Valley University, GOED and local leaders will announce the creation of the Utah Chapter of the U.S.-Mexico Chamber of Commerce. World Trade Center Utah CEO Lew Cramer says Al Zapanta, CEO of the U.S.- Mexico Chamber of Commerce, will be on hand for the event, which World Trade Center Utah is co-sponsoring along with several other entities interested in international issues.
GOED is also looking for leadership in the community and private industry to help establish the Utah-Israeli Chamber of Commerce. If the Chambers of Commerce are successful more will follow. “Developing a Chamber of Commerce will be one of the first things we look to establish before going into a country on a trade mission,” Mikolay says. “But establishing and sustaining the Chambers will be difficult so we are looking to the private sector for help.”
Foreign trade missions are one component of a larger international strategy within GOED. So far this year, the state has conducted five trade missions. A Utah delegation is currently on a trade mission in China and another delegation is leaving this week for Brazil. Other trade missions have included Israel and the West Bank, the Philippines, Peru and the United Kingdom. Mikolay says his team generally tries to establish four trade missions per year, or quarterly, but this year was unique because of industry interest in adding trade missions to Brazil and the Philippines. The increase in trade missions this year was also fueled by the Small Business Administration’s Small Business Trade and Export Program (STEP), a grant program that funds up to 75 percent of travel costs for qualifying businesses to attend foreign trade shows or trade missions.
“Our typical strategy is to identify regions of the world where we have the greatest opportunity to either increase exports or attract foreign direct investment,” Mikolay adds, “but we also respond to industry desires to go to certain locations and help them with their exporting, client activities or manufacturing interests.” GOED typically requires at least 10 companies interested in a specific region before engaging in a trade mission.
“When we have enough interest from an industry, we will work with the U.S. Department of Commerce’s Foreign Commercial Service Gold Key program,” says Mikolay. “We tell the Foreign Commercial Service what our companies want to do and what their goals are, and the Foreign Commercial Service will work with its local offices in the region to identify companies, manufacturers and clients that our Utah companies should meet with. When we go on the trade mission we have preset meetings with those companies so it is a productive visit for our Utah companies and they make valuable contacts.”
Because the STEP grant is such a valuable tool, GOED has arranged with the SBA to allow Mikolay’s team to administer the STEP program without having to lead a trade mission to every region of interest. The end result is that Utah businesses that qualify for a grant can attend a trade show overseas or take advantage of other foreign business opportunities without GOED having to line up enough Utah businesses to make a trade mission viable.
“With this arrangement, we can support the export or foreign business needs of Utah businesses while still focusing on our core strategy, which is to conduct trade missions to the regions of the world where we can have the greatest success in building relationships politically and economically to help businesses increase exports and increase foreign direct investment in Utah,” he explains. “As a state, our agenda is to help businesses increase exports, investigate venture capital opportunities and draw interest in Utah as a viable place to invest in businesses. We also have tourism and educational components of our trade missions.”
Mikolay says encouraging Utah’s foreign trading partners to visit Utah and to establish connections with Utah’s universities is also part of each trade mission’s objective.
Resources to Help
GOED’s international team has a number of resources available to help Utah companies determine how they can grow their businesses through exports and international trade, Mikolay notes. He encourages the business community to contact the International Trade and Diplomacy Office to take advantage of those resources and points to World Trade Center Utah as an invaluable partner in assisting Utah businesses with their international trade goals. To provide one-stop service, GOED, World Trade Center Utah, USTAR and the Governor’s Office of Energy Development are all co-located in downtown Salt Lake City at the World Trade Center at City Creek building.
“World Trade Center Utah co-sponsors our trade missions and is a fantastic partner. The seminars, training and consultation work they also provide Utah businesses is invaluable,” he notes. “A lot of our trade mission activity consists of educating and sharing information with businesses interested in a particular region. All of that is supported by our partners at World Trade Center Utah, EDCUtah and our private sponsors. Our activities would not be successful without these groups.”
Mikolay also says GOED’s international trade efforts would not be possible without Gov. Herbert and GOED Executive Director Spencer Eccles’ strong leadership. “We are fortunate to be led by Gov. Herbert and benefit from his encouragement and vision for our international strategy.”