Establishing a State Representative Office Abroad

When a state (or a city, for that matter) establishes a representative office in a foreign country, its goals usually include developing export opportunities or investment attraction prospects.

The effectiveness of such offices is a matter of some dispute. Some offices are expensive to staff and operate, and are unproductive.  Others are essential tools in increasing awareness of a state’s or city’s global profile and potential.

I’m deliberately not naming names.

In fact, governors and mayors have been known to be highly persuadable on such matters, as key constituents advocate strongly for a presence in a market of special interest to them. Legislators, too, often back efforts that are not necessarily economically driven.

Surely any rational effort to plant the flag abroad must include a frank consideration and articulation of:

  • Specific goals and priorities of the office
  • Strategic plan
  • Staffing needs
  • Budget and funding sustainability
  • Competitive considerations

This is a big topic, and perhaps we’ll delve into these factors and specific cases in coming posts. For now, however, I want to highlight one particularly intriguing effort being undertaken by the state of Georgia in China.

It’s no secret that China is in the plans of just about every state and economic development agency with international aspirations. The question is, how best to approach a market as large and complex as China. Not every state can afford to establish a representative office which, of course, is just one strategy or tool that policymakers have at their disposal.

But if you’re going to establish a foreign office, and an office in China in particular, where would you do so? Beijing? Shanghai? Guangzhou? Shenzhen? These major cities may be familiar to internationally focused economic development professionals. Many states have established a presence in these major cities, and of course the answer lies in considering the best “fit” for industries, investment, etc.

That said, Georgia has established a presence in Qingdao, a city where, as the Atlanta Journal-Constitution points out, no other state has an office. Georgia’s governor, Nathan Deal, says that taking the safe route, i.e., planting the flag where others have already staked out their turf, is a strategy that is unlikely to succeed.

Time will tell whether Georgia’s efforts pay off. One challenge, regardless of an office’s location, is the fact that efforts such as these are seldom given adequate time to demonstrate their value, since everyone demands and expects instant and positive results. International business doesn’t work that way.

Still, there’s something very appealing about the strategy. One hopes that the effort is accompanied by a plan, is adequately funded, is staffed properly and is given sufficient time to succeed.

In the meantime, in considering Georgia’s strategy, perhaps we should be mindful of the Great One’s (Wayne Gretzky’s) secret to success: “Everyone else skates to where the puck is. I skate to where it’s going to be.”

For Georgia and its governor, the strategy may turn out to be the real deal (pun intended.)