Outlook and Recommendations for Development

Foreign firms from at least 20 countries engage in business activity in New Hampshire, showing a good diversity of investment sources. This report [ii] includes evidence of variety in business activity but also patterns of activity. It appears that large projects drive some activities (e.g., state and national government contracts; the Hawaiki transpacific cable system; the Quebec-NH interconnection project for power transmission). Local infrastructure (e.g., The Center for Coastal and Ocean Mapping, power infrastructure, tourism assets) attracts undertakings from foreign companies.

In general, the location seems to be part of foreign companies’ long-term strategies (e.g., a merged company was headquartered in New Hampshire; there are companies that continuously use and develop distribution networks here, etc.). It is difficult to draw a categorical conclusion on correlations between country-of-origin and type of activity. Some evidence suggests that UK companies have the most relative diversity in activities, Canadian companies tend to focus more on expansion, and Japanese firms appear more focused on acquisitions.

Diversity of business activities in which foreign companies have engaged in the last few years suggests a wide range of these companies’ interests and development aspirations in the state. This may indicate overall good prospects and positive expectations of outcomes for any economic development strategies involving FDI and foreign business activity.  The interpretations of patterns and trends lead to a number of development recommendations.

Incentivize businesses with recent activity

The data points out to more recent activity from firms that didn’t typically engage in business in New Hampshire, such as those from Israel, New Zeeland, Australia. Taking advantage of this recent interest, incentives and promotion activities could be oriented towards firms from these countries. These countries may be a good source of foreign investments in the future.

Strategize around the development of an IT cluster

Development professionals should take advantage of the increased intensity in R&D to create an innovation cluster. The multitude of business activities in the sector suggests that IT could be a good choice, perhaps in the technology hardware and equipment subsector, where a good number of activities take place. Foreign business activity in the IT sector appears to be centered around product development and innovation. IT is the sector with most diversity in terms of country-of-origin, with strong European business activity.

Promote industrials and health care

The propensity of acquisitions and expansion activities in recent years suggests improved integration of foreign firms into the state’s business environment. This should be reinforced as an area of positive contributions. Development incentives or promotions could be guided towards sectors that historically had a good presence of foreign companies, such as industrials. Expansion is a strong motivation in the industrials sector. Alternatively or concurrently, development could target new growth sectors, such as healthcare, where there are a good number of activities related to expansion and innovation, increasing in intensity in latest years.

Promote examples and encourage networking

Large foreign companies engage in large projects or additional investments, pursue local innovation, bring innovation from out-of-state, and generally bring more business into New Hampshire. Assisting, supporting and promoting these organizations’ positive influences could be a way to encourage other significant players. Aiding the networking of large foreign companies with smaller businesses, domestic and foreign, may also assist in the development of the vibrant small business profile of the state.

Explore new ways to engage foreign businesses in utilities

Canadian and, to some extent, British companies have shown considerable interest in the New Hampshire utilities sector. Expansion seems to be the main motivation of these foreign companies. Development professionals should explore new possibilities to open up more business in this sector.