LOS ANGELES -- The more Manitoba companies export south of the border, the more they should consider investing in bricks and mortar there to get closer to their clients, according to the U.S. Department of Commerce.
Figuring out how much to commit to foreign direct investment is a bit of an inexact science, said Aaron Brickman, Washington-based deputy executive director with SelectUSA, but he believes once a company has 20 per cent of its exports heading to a particular country, it's time to build a plant or base a sales and distribution operation there.
"It becomes vital to understand your client needs. (You want) to be closer to your customers and slim down the supply chains and your time to market. The best (trading) relationships are ones where there is a deep knowledge of the market," he said.
SelectUSA is a division of the U.S. Department of Commerce International Trade Administration.
Brickman admits promoting foreign direct investment has an obvious benefit to the U.S. with job creation and economic growth, but it's hardly a one-way street.
"It creates a win-win situation. The company that invests abroad will have to staff up at its headquarters to manage that new expansion," he said.
"The U.S. has 317 million people. There are reasons to be here to service the market. We're the only OECD country with a growing population," he said.
Ferdinando Guerra, international economist with the Los Angeles County Economic Development Corporation, believes Manitoba and Canadian companies can use the southern California region as a springboard to the lucrative Asian markets of China, South Korea, Japan and Taiwan.
For starters, Los Angeles County with its 10 million people would be the eighth-largest state in the U.S. and the state as a whole, with a population of 38 million, and is the ninth-largest economy in the world. Los Angeles also has the two largest ports in the Western hemisphere.
"You could kill two birds with one stone in terms of going global from here. Los Angeles has become a gateway to Asia over the last 10 years. You can also leverage (operations) here to enter Latin American markets," he said.
Brickman said SuccessUSA offers a wide variety of services to Canadian companies to help them understand the investment process and make introductions to cities and states that would love to hear from them.
Few countries are as easy to invest in as the U.S. as it treats international companies in the same way it treats domestic firms, he said.
"The welcome mat is very large for Canadian companies looking to expand to the U.S.," he said.
Geoff Kirbyson is touring America as part of a U.S. government program called U.S.-Canada: Partners in Economic Development.