TOKYO -- Like a band of startup executives looking for funding, a delegation of San Jose officials hit the ground in one of the world's most vibrant metropolises with an elevator pitch that included boasts of the city's diverse demography, its innovation economy and offers to assist companies and investors willing to set up operations on the other side of the world.
"It's about raising San Jose's visibility in Tokyo, one of the major city powerhouse economies in the world," said Kim Walesh, San Jose's director of economic development, who was on the recent trip. It wasn't long ago, she added, "The world came knocking at our door. Now, we have to try harder."
In an era of high unemployment, sluggish economic growth in the United States and rising wealth in Asia, even Silicon Valley has to look abroad for investment. While the region remains a strong lure for foreign technology companies, government officials are making a greater effort to put out "Open for Business" signs to attract overseas investment.
"Until about 10 years ago, we were the center of gravity for a lot of things," said Fred Greguras, a Palo Alto-based partner with law firm K&L Gates, which has offices across Asia. He is working with San Jose to attract more international companies to the city. "Now, they don't need us as much. We need to reach out if we want to be relevant and generate jobs."
San Jose officials are working with local business leaders planning to
While Silicon Valley has long been a destination for global technology companies, it nonetheless faces increasing competition for big foreign investments. Last summer, San Jose was in a tight battle with Austin, Texas, to attract Samsung Semiconductor's expanded research and development center. San Jose and Brown's Office of Business and Economic Development offered the South Korean company -- which already had an outpost in San Jose -- an array of subsidies, fee and tax reductions and a $500,000 economic development incentive. It was enough to clinch the deal. Samsung Semiconductor is building a 10-floor state-of-the-art facility at North First Street and Tasman Drive that could support an estimated 2,000 jobs.
"I wanted to win this and the mayor wanted to win this and we did," Walesh said.
In an increasingly global economy, governments have to look to overseas investment for job growth, said economist Christopher Thornberg. "You can't just look internally," he said. "People now get the idea that ultimately, this is an important way to help your local economy. You have to compete in the world economy."
In 2012, Chinese foreign direct investment in the United States soared 41 percent to $6.5 billion, according to New York-based Rhodium Group, which tracks Chinese investment.
There will be even more opportunity in coming years, according to a report by the Asia Society released last fall. California could pull in as much as $60 billion in investment from China by 2020, but only if government and business officials work together to attract overseas capital.
Chinese companies often are reluctant to set up operations in the United States because of a perceived "lack of support from the U.S.," said Stephanie Xu, vice president of East West Bank in Cupertino, who is working to create the nonprofit that will assist San Jose in attracting Chinese investment.
To counter that perception of a lack of support for foreign investment, San Jose city officials made a rare overseas trip to Tokyo in early January. In addition to celebrating the launch of All Nippon Airways' 787 San Jose-Tokyo flight, which they had pursued for years, they visited with numerous companies to entice them to consider San Jose as a travel and business destination.
While Boeing's 787 has been grounded and the new route suspended while investigators review the aircraft's problematic battery system, ANA's decision to start a service in San Jose was a huge win for city officials. The city estimates that a regular flight between San Jose and Tokyo would generate $78 million in business for Silicon Valley and 61 jobs in San Jose during its first year of service.
While San Jose delegates toasted ANA officials for the flight at a dinner, they also organized a clean tech conference, met with a Japanese retailer or two and attended a lunch with travel industry managers -- all in an effort to sell San Jose.
"It's a new attitude," said Toshiro Okada, chief executive director of the Japan External Trade Organization in San Francisco, which aims to facilitate investment between the two countries. "Silicon Valley and the U.S. government have been open to people from other nations. But now they are very aggressive about attracting them. This is very new and welcoming."
Luring investors across the Pacific requires developing deep relationships, said former U.S. Transportation Secretary Norman Mineta, part of the San Jose delegation to Tokyo, as he headed to a dinner with ANA executives.
"You have to court them," he said.
In the end, though, "Everyone is still interested in playing in our economic sandlot," Mineta said. "We are still the No. 1 economy in the world."
Contact John Boudreau at 408-278-3496. Follow him at Twitter.com/svwriter.