A warehouse built by onetime Chicago merchant Montgomery Ward & Co. is now home to the sleekly chic U.S. headquarters of an imported corporate citizen: Britain-based vacuum cleaner-maker Dyson.
The company that made an everyday household appliance hot again planted its flag in Chicago in 2002 with a two-person office and no sales in this country. Today, 1 in 10 upright vacuums sold in the U.S. is a high-tech, bagless Dyson. The innovation-minded firm has 500 U.S. employees, including 160 in the River North building it shares with daily deal company Groupon, and 180 at a call center it opened in 2012 in Aurora rather than in a low-wage country.
"It is the complete intention to keep the call center in the U.S. at this stage," said Ed Culley, president of Dyson U.S., adding that he wants top-notch service on the company's high-end products. "We want (employees) to feel they are not working for a call center, they are working for Dyson. I think that would be challenging if our call center were in a different country."
Dyson's story — an established company from a developed nation opening operations here — is in many ways typical of the most valuable type of foreign investment underpinning the Chicago economy in recent years.
Foreign acquisitions such as China-based Lenovo's planned $3 billion purchase of Chicago-based Motorola Mobility account for more than 80 percent of foreign investment in the U.S. But they do not necessarily generate new jobs — and in fact could do just the opposite, depending on the company's strategy.
"Greenfield" investments like Dyson's — generally defined as new projects or major expansions that bring with them new opportunities — are the most promising prospects for Chicago as the region strives to move beyond a decade of lackluster international business attraction efforts and economic stagnation.
"A greenfield investment ... brings new dollars," said Benjamin Jones, faculty director of the Kellogg Innovation & Entrepreneurship Initiative at Northwestern University. "It's a signal and a sign when others come to your region to invest that there are growth opportunities and attractive elements to the market."
Chicago ranks high on lists of the world's global cities, most recently slotted as No. 7 in an A.T. Kearney index released this week. New York, London, Paris, Tokyo, Hong Kong and Los Angeles led the roster.
But a 2012 report by the Chicago Council on Global Affairs criticized regional attraction efforts as lacking in focus and underperforming comparable global cities such as Toronto and Bogota, Colombia.
Government agencies do not issue foreign investment data by metro area, but research by private firms indicates that Illinois, whose economy is dominated by the Chicago region, lags other populous states. California, New York and Texas lead the way, though Chicago economic development officials point out California and Texas are home to multiple metropolitan areas.
Landing foreign investment is viewed as critical for revitalizing the region's economy because such companies tend to pay higher wages, produce more goods per worker and ship more of them overseas, bringing in new revenue.
Such investment also "can lead to technology transfers," said Brent Neiman, associate professor of economics at the University of Chicago. "Companies with foreign know-how enter the market and hire local workers who learn to make things the way the company makes things."
The need to ramp up foreign investment comes at a time when U.S. companies' foreign investments are more than double what foreign firms invest here, and when some American-based firms are moving headquarters to lower-tax nations or are feeling pressure to do so.
Founded in Chicago, insurance brokerage Aon moved its headquarters to London in 2012, and drugstore chain Walgreen Co. is feeling shareholder pressure to consider a move overseas.
For a city that has lost some high-profile corporate headquarters over the past 25 years, foreign investment is an important way "of being able to have decent jobs and create investment into the community," said William Osborn, retired chairman and CEO of Northern Trust Corp. and co-author of the council's report. "There's no reason we can't rebuild a little of that." He said he sees movement in the right direction.
The issue is urgent enough that Chicago Mayor Rahm Emanuel traveled to Mexico and to China last year to begin establishing relationships.
"The reason I took my first trip to Mexico," Emanuel said at a recent immigration forum, "was to meet up with (more than 20) CEOs who want to follow the Mexican population here ... and to open up industries in financial services, food service, telecom." In China, he signed economic partnership agreements with eight cities.
Reciprocal visits from each nation are expected later this year, with the Mexico City delegation scheduled to arrive the week of May 19. The agenda includes meetings with representatives of the region's digital startup community, its biotech sector and its tourism industry, said Alpita Shah, part of the international team at World Business Chicago.
Long way to go