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The US – It’s Really 50 Different Economies

Written by Mark Sutherland, CMO of Missouri Partnership

One of the top concepts that British companies need to understand at the beginning of an expansion or market entry process – is that in the U.S. there are 50 states and each state has its own individual economy that “trades” with all the other states and countries around the world. California, for example, has an economy comparable to the entire UK, and Missouri has an economy equal to adding up Scotland, Wales, and Northern Ireland.

Each state is different in taxes, regulations, insurance rules, banking rules, costs of doing business, talent availability, support structure in the communities, and regionally, and in many other ways. Missouri, for example, is separated from Kansas by a street, and from Illinois by a river. But the business environments between them vary significantly.

Tax Rates and Regulations Vary Wildly Across the US

Missouri has a corporate income tax rate of 4 percent, making it the second-lowest rate in the U.S. among states that collect corporate income tax. Other states might not have corporate income tax, while others have much higher rates. But states might also have higher costs in other areas or the infrastructure in place might be great or awful for your business.

And Missouri is one of the most economically diverse states in the U.S., with a AAA bond rating for more than 50 years. Beyond agri-tech, financial services and advanced manufacturing (including building the Boeing F/A-18, F-15, and 776,000 vans and trucks each year), Missouri is a global leader in geospatial analysis, health data solutions and pure human and animal health research, energy storage development, and fintech innovation, to name just a few.

Find Out Which State Has the Strengths Your Company Needs

For example, Missouri has every Class 1 railroad in America coming to it, and the Mississippi River provides ice-free, lock-and-dam-free access to the Gulf of Mexico year-round. Missouri is at the center of America and leads in global industries such as agri-tech, financial services and advanced manufacturing.

Last year, the state jumped from 23rd most attractive U.S. business climate to 14th, with additional jumps expected this year. But if you’re looking for a state that is going to incentivize solar, then another state might be better unless of course you are looking to develop energy storage. Missouri, thanks to companies like Eagle Picher, is powering the International Space Station and every Mars mission.

The Right Landing Spot Can Mean Success. The Wrong One…

Making the right choice on a location is probably the most important decision you will make if you are investing and starting up a new facility across the Pond. A friend at Scottish Development International nailed it. “Each state is different from the next,” he said. “Each government has different priorities, regulations, and laws, which in turn affect what industries and/or products will thrive in that given region.”

Where Can I Find Companies Like Mine Who Are Succeeding?

Everywhere. Across the US, there are companies like yours who are successful today. The ones that are in Missouri that you may be familiar with might surprise you. Those with global headquarters here include iconic companies such as Anheuser-Busch, Bass Pro Shops, Centene, Cerner, EaglePicher, Edward Jones, Emerson, Enterprise, H&R Block, Nestle Purina PetCare, Rabo Agrifinance, RGA, Stifel, and Wells Fargo Advisors. Many others have their North American or U.S. headquarters in the state, such as AB Mauri, Bayer Crop Science, Bunge North America, Caparo Group, Hartmann, KWS, and Mallinckrodt.

Other major corporations have extensive operations in Missouri, including Boeing, Boehringer Ingelheim, Bunzl, General Motors, GKN Aerospace, GSK, Ford, Nucor, Square, Unilever and WPP.

But Are There People to Hire?

Every state in the US has great people and great talent. In Missouri, we have a population of more than 6 million, and a workforce of more than 3 million. But you will want to locate in a state where your industry is already strong so that you know there are trained people to hire. And Missouri has created new programs to ensure companies’ talent pipelines are full. Every state has the challenge of filling the talent needs of their companies, and Missouri is taking huge steps forward to be the best in the Midwest for talent development and attraction.

The Missouri One Start program is making the state a top contender in workforce development, leveraging a coordinated statewide network of colleges and training centers to design and deliver customized pre-employment screening, employment marketing and job-specific training. Combined with other programs, such as Fast Track and the A+ program that offers free community college across the state, along with work-training programs for released offenders and internationally ranked universities, Missouri is meeting the talent supply demands of innovative companies across the state.

And the state is working to increase its already robust apprenticeship programs, using UK apprenticeship programs as a model.

Help Me!

So where to start? Who can help?

I highly recommend meeting, virtually, with both the UK’s Department for International Trade and the U.S. Embassy. They can help you connect with state level organizations and help you understand where the various industry clusters are located around the U.S. They will connect you with organizations like Missouri Partnership, who you can also connect with virtually, who work with companies to find the customized location, talent, and other solutions needed to ensure your U.S. plans are successful.

The SelectUSA Investment Summit is also a great place to meet numerous state level and regional organizations over the course of a few days, and there are currently many virtual events and networking possibilities through SelectUSA. They will help you quickly meet representatives from many U.S. states and regions, all of whom should be able to deliver detailed insights within a couple of weeks into what investing in their part of America looks like, including cost breakdowns, available locations, and incentive information.

Get Advice from Those Who Have Gone Before

Amit Kothari, the British CEO of the software company Tallyfy that landed in Missouri, had some advice on, well, advice.

We would have sought advice from great people in our space earlier,” he said when asked what he would have done differently. “Sometimes knowing what not to do as a product company is very important,” Amit said. “It’s a lesson learned early in our evolution.”

Many times, British companies underestimate the diversity of economies within the U.S. It’s always an important lesson to learn that the U.S. is 50 individual economies with varying policies, regulations, and political environments. Once this mental shift is made, UK companies tend to focus on priority markets and succeed at a much higher rate.

For British companies considering their U.S. expansion or market entry, the Show-Me State of Missouri certainly has a lot to show off.

Mark Sutherland

Mark Sutherland is the CMO of Missouri Partnership, the British Hon. Consul to Missouri and a published author on the topic of economic connectivity between the UK and the U.S. He works with Missouri and the UK to support British companies as they invest in the U.S. He can be reached at mark@missouripartnership.com.

 

 

June 2020

#LTW

2-10 September 2020

#LTW