In September 2021, World Trade Center San Diego (WTCSD) hosted its quarterly Global Competitiveness Council (GCC) meeting in collaboration with the San Diego Cyber Center of Excellence (CCOE) and the Committee on Foreign Investment in the United States (CFIUS). We were joined by David Rader, Deputy Director in the Office of Foreign Investment Review at the Department of Defense, who presented on the national security implications of foreign investment in the United States.
Here are three things we learned from the session about foreign investment into San Diego:
1. FDI is a positive for the United States, but requires caution
Foreign direct investment (FDI) provides American companies with valuable capital to grow and prosper. However, it is critical to exercise caution and conduct proper due diligence when considering investment from foreign countries. There is always a chance rogue actors could undermine American companies like yours by way of theft of intellectual property.
2. U.S. companies are losing out on American-made innovative technologies to adversaries
Foreign countries are increasingly leveraging FDI as a means to gain access to new technologies via control of intellectual property. One way adversaries do this: By raising venture capital and early stage funds to target innovation hubs like San Diego.
Unsurprisingly, the United States and its partners comprise the vast majority of innovation hubs around the world, making them and their homegrown innovation companies high-value targets. The majority of threats have been toward companies in the emerging technology space, including 5G, artificial intelligence, semiconductors, and unmanned systems. But recently, improved due diligence and private capital has allowed CFIUS and its partner organizations to minimize these threats toward American companies and technologies.
3. It pays to proactively reach out to CFIUS
CFIUS is an interagency committee authorized to review certain transactions involving foreign investment in the United States and certain real estate transactions by foreign persons, in order to determine the effect of such transactions on the national security of the United States. Companies that are considering leveraging foreign investment are encouraged to reach out to the team at CFIUS for no-charge advising to ensure your intellectual property will remain safe. CFIUS will need your company name, technology, and foreign investor information to determine if the transaction necessitates review through its due diligence process.
To get started with no-cost advising from the CFIUS staff, please reach out to David Rader, Deputy Director, Office of Foreign Investment Review at Department of Defense – email@example.com
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World Trade Center San Diego operates as an affiliate of the San Diego Regional Economic Development Corporation. WTC San Diego works to further San Diego’s global competitiveness by building an export pipeline, attracting and retaining foreign investment, and increasing San Diego’s global profile abroad.
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