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February 5, 2007 

 Q&A: World Business Chicago on Chicago as a Success Story 9/19/2006
The mission of Going Global, which appears on MidwestBusiness.com on most Tuesdays, is to educate and inform Midwest technology companies on what local technology companies are doing internationally so other firms can learn from the successes of like-minded peers.

CHICAGO – Tom Bartkoski is director of international business development for World Business Chicago, which is a public/private economic development partnership in Chicago. He is responsible for foreign direct investment (FDI) and international data gathering. Bartkoski also assists foreign-based firms with all phases of location evaluation and site selection.

In part three of a three-part Q&A, Bartkoski sat down with international expert Michael Muth to discuss the importance of O’Hare to foreigners, Chicago culture, coastal concerns and the benefits of international trips.

Michael Muth: How important is O’Hare to the decision by foreigners to locate here?
Tom Bartkoski: O’Hare is absolutely vital. Many companies do want to be near an air hub for access to the North American marketplace, access back home or access to the rest of their global networks. One foreign-owned company recently relocated from Kansas City partly to take advantage of the direct air access back to its home office and better air access in general.

O’Hare is such an advantage for Chicago in competing domestically and internationally. It’s just one reason that successfully expanding O’Hare to handle traffic demands is so critical (not just for company relocation but for our global economic competitiveness).

MM: What’s important about Chicago’s network access point?
TB: Since we have the connectivity, it contributes to the concept that we are at the center of communications. We have the infrastructure. We have the people. That creates a critical mass of capability. We have a dynamic research sector that interacts with the business community. STAR TAP is the only facility in the world that provides a cooperative interaction point among numerous international advanced networks.

The International Center for Advanced Research (iCAIR) at Northwestern University works on high-speed transportation technology. We can take some leadership of that sector. There was a lot of concern about the financial exchanges here as they moved away from floor trading and became electronic. Now they’re doing very well and making acquisitions. Here we have technology expertise as well as financial sector and trading expertise.

When Eurex came out of Europe to the U.S. three years ago, its only choice was Chicago in terms of futures trading and risk management. It’s a point of pride to point out that Archipelago did merge with the New York Stock Exchange. Many people didn’t realize that Archipelago is a Chicago-based company. We do have the existing base. Japanese companies like to go where there’s an existing Japanese business community they can plug into.

There’s a Japanese school in Arlington Heights, Ill. along with a French school and British school in Chicago. It’s making people feel at home and that they’ve made the right decision from a business and a personal perspective. There is a broad and deep cultural background in Chicago. While some are skeptical of the cultural depth here, we can point to the Art Institute of Chicago and the architecture. Whenever we can get people to visit, we know we’ve got them.

MM: There seems to be a glut of office space these days. Are foreigners interested in taking advantage of that?
TB: We’ve added and continue to add a lot of office space (especially downtown). Even though absorption there was among the highest in the nation in 2006, the price pressure is not nearly what it was a few years ago. Increased office availability does make the market more attractive both from a cost standpoint and from a space availability standpoint.

While an office market of this size will always present a variety of choices, the scope of choices now is even greater. Incidentally, many people do not realize that a fair amount of foreign capital goes into acquisition of office buildings in Chicago. German buyers have been quite active partly due to the dynamics of the legal and tax system there.

MM: Many foreigners feel that Americans are lacking in culture. How do you address this?
TB: I don’t think it’s a huge obstacle in a business sense because they come here for business reasons. It’s keeping their ex-patriates happy.

I had a comment from an Austrian company. (We have 20 Austrian companies here. They’re scattered in several industries.) This auto parts company manager was telling me he was interested in getting his technology in the central U.S. Detroit is where the Big Three are, but in the discussion, we have a huge auto parts sector in Chicago and it’s much easier to get ex-patriates to come here because of the plethora of culture.

In between complimenting our restaurants, he said: “We have to do it in Chicago because I can more easily get a manager to come from Austria to Chicago.” While they perceive Americans as not having culture, we do have it here in Chicago.

MM: Chicago’s school system is rated poorly. What affect does that have on international decision making?
TB: You have a lot of choices. Magnet schools are very good. The government of China opened a Confucius Institute as well as a Chinese cultural and language promotional institute.

For us, that’s a double success. It enriches Chicago and puts us on the map with the Chinese. We’re looking for a wave of investment from them. The school system has been improving itself over time. On the education side, we have some incredible universities. The University of Chicago likes to point out they have 75 Nobel Prize winners (that makes 83 in the area). That impresses foreigners.

MM commentary: Though ex-patriates probably don’t send their children to public schools, they still train many of us.

MM: How do you deal with critics who say we lose our best and brightest to the coasts?
TB: While I haven’t seen information that corresponds with that, we do get a lot of interest because of our higher education. The University of Chicago and Northwestern were ranked No. 1 and No. 2 in business school rankings and always in the top 10 or top five in global business school rankings. Many graduates have gone there and have a soft spot for Chicago. In finance, there’s a lot of opportunity here.

MM: How has that attraction of British Schools of America helped in recruiting other British companies?
TB: We always mention the school to United Kingdom-based prospects. In fact, we worked with the school when they were looking at Chicago in 2001. In putting together information for Boeing, we highlighted that along with the other foreign-curriculum schools.

It fit in nicely with the diversity the company was seeking. By the way, the British School of Chicago is doing quite well here and just announced plans to construct a new facility in Chicago. Headmaster Michael Horton is one of the ex-patriates who kindly appeared in some promotional material we have distributed.

MM: What have been the longer-term results from the 2003 French biotech mission?
TB: We brought a dozen French life science companies here on a tour tied into the Sister City program to visit the Chicago Tech Park along with Abbott and Baxter.

We were returning a reciprocal visit to Paris in 2000. Sept. 11, 2001 delayed things a bit. At BIO 2006, the same group was invited back. One signed a contract with Abbott and has a business relationship that would not have occurred without the 2003 trip. While it can take time, these things do come to fruition.

MM: The mittelstand (mid-sized) companies (like VKF Renzel) are important in Germany. How do you serve companies of that size?
TB: We provide the information and contacts these companies need to get established here. The mid-sized firms typically have been doing business in the U.S. for some time and have decided they finally can’t do without that on-the-ground presence to keep growing in this market.

We give them everything from the metropolitan economic overview, various cost data, assistance with real estate and contact information they might request. I even point them to business visa information.

MM commentary: It appears as if small companies get the same service as big companies.

MM: What has come out of your trip to China in May 2006?
TB: A local consultant who works with Chinese companies organized the conference in Nanjing. I don’t travel a lot internationally (primarily for budget reasons). We’re often busy with people here kicking the tires. I met some high-ranking officials from the Jiangsu province including governor Liang Beohua. We distributed our Chinese-language literature. I presented on Chicago’s attributes to the assembled officials and delegates.

This was simultaneously translated and we distributed Chinese-language presentations to everyone. I said “hello” to the state of Illinois office in Shanghai and I met with Zachary Zhao (who runs the operation there). I also met with the chairman (George Felbinger) of the Chicago-China Club in Shanghai. The group already has 300 members.

We already have two dozen mainland companies here. Wanxiang in auto parts has been here for a number of years. That sort of direct investment from the mainland has been rare until now. The Chinese will be the next large wave of investment. The mayor is focused on China as a future investment target. That’s why he’s pushing Chinese-language training.

He believes language training is so important for young people to succeed in a world where China will be playing such a large role.

He visited Beijing earlier this year and Shanghai in 2004 to promote our Sister City program. Our Chinese-language program is getting international attention. At his behest, Shanghai helped find teachers for our foreign-language program. The main constraint to expanding the program is finding sufficiently qualified Manadarin teachers. Chicago is trying to maintain its lead in this area.

MM: How has the positive review of Chicago by the Economist helped your efforts?
TB: It’s always a great boost when one of the world’s leading publications focuses on the great story here. They simply titled the story a “success story”. The story went into the renaissance the city has undergone in the last decade and a half, the mayor’s key role in that as well as the huge changes since the city was last profiled not so positively by the Economist in 1980.

The survey release had a kind of double whammy (the print release and then our subsequent distribution and referral to the piece). With the Economist’s readership, the initial release of the piece this year got in front of a lot of important eyeballs here, in the United Kingdom and globally. We were also able to purchase and send out some reprints and post the article on our Web site.

MM commentary: In case you haven’t seen it, the article was very complimentary to Chicago.

Michael Muth is managing director of GATA, an international business development consultancy that helps technology companies build international partnerships. He can be reached at mike@intlalliances.com.
Click here for Muth’s full biography.

Previous Columns in 2006:
Q&A: World Business Chicago’s Tom Bartkoski on Chicago vs. Other Cities (9/12/2006)
Q&A: World Business Chicago’s Tom Bartkoski on Economic Development (9/5/2006)
Q&A: Robert Noe, CEO of 1SYNC in Chicago, on Enforcing Data Standards (8/15/2006)
Q&A: Robert Noe, CEO of Chicago-Based 1SYNC, on Data Standards (8/8/2006)
Q&A: Robert Noe, CEO of Chicago-Based 1SYNC, on Data Synchronization (8/1/2006)
Q&A: Mike Jakob of Sportvision in Chicago on Creating Sports Innovation (7/11/2006)
Q&A: Mike Jakob of Chicago-Based Sportvision on What’s Coming Next (6/27/2006)
Q&A: Mike Jakob of Sportvision in Chicago on Enhancement Technologies (6/20/2006)
Q&A: Christos Fotiadis of ProtoGroup in Chicago on Japanese Culture (6/6/2006)
Q&A: Christos Fotiadis of ProtoGroup in Chicago on Japanese Expansion (5/30/2006)
Q&A: Christos Fotiadis of ProtoGroup in Chicago on Compliance, Partners (5/16/2006)
Q&A: Lakeview Technology Founder Bill Merchantz on Trade Shows (4/4/2006)
Q&A: Lakeview Technology Founder Bill Merchantz on International Partners (3/28/2006)
Q&A: Lakeview Technology Founder Bill Merchantz on Overseas Expansion (3/7/2006)
Q&A: Steven Ganster of Technomic Asia on Chinese Readiness (2/7/2006)
Q&A: Steven Ganster of Technomic Asia on Chinese, U.S. Differences (1/24/2006)
Q&A: Steven Ganster of Technomic Asia on Approaching Chinese Expansion (1/17/2006)
Click for 2005 column archive.
Click for 2004 column archive.


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