11/19/2013 03:21 pm ET Updated Jan 25, 2014

Business Not as Usual

The Great Recession and the changing global economic landscape have forced U.S. leadership to reassess its relationships with foreign markets and companies. SelectUSA, a federal program that promotes U.S. inbound FDI (foreign direct investment) since 2010, launched its first ever SelectUSA Global Investment Summit earlier this month. Business executives, policy makers, academics and others got together to remind the world that the U.S. is open for business. Really?

The benefits are well known but it is important to remind ourselves. FDI is only 1 percent of U.S. workforce BUT 15 percent of R&D and 20 percent of export. Salaries are higher. One of the most common words at SelectUSA Summit was optimism. Optimism, various officials say, is the driving force behind confidence, productivity, and growth.

Cynicism may downplay the importance of such summit and the role of the U.S. government in such a process. In fact, joining the investment party, I wondered myself: does it really matter what the U.S. government is saying about FDI into the U.S. market? After all it is a globalized borderless world where capital is chasing financial markets efficiency?

It does matter. In a world where political risk and state capitalism are some of the biggest risks for foreign investors for 2013-2014, a pro-FDI environment led by strong government policies could make a big difference. The foreign investment community does ask for various policy changes that could make the U.S. investment environment significantly more favorable. The proposed tax exemption for foreign pension funds' investments in U.S. infrastructure from Foreign Investment in Real Property Tax Act, currently discussed in various governmental forums, is just one example.

In fact, symbolism matters as well. Having non-U.S. multinationals on the U.S. Manufacturing Council, according to a new announcement, will bring foreign investors closer to the policy makers and improve their position. Hopefully in will also cut some of the red tape.

Another aspect of the role of government in this story is the energy revolution. The fracking technology and new off-shore drilling sites (more than before BP oil spill) will help drop energy prices, increase natural gas share of total energy consumption to 45 percent by 2020, and make the production of renewable energy more competitive. In fact, the U.S. will be the largest energy producer by 2020 and be energy self-sufficient by 2025. While the U.S. government cannot recreate the technology behind it, it can allow certain technologies to flourish, issue new drilling permits, and adopt other policies, such as comprehensive new immigration policies, which will create the ecosystem required for success. Foreign investors crave cheap energy.

Also, many trade agreements, such as NAFTA, which have been the engine behind U.S. export growth, also include investment chapters that cover investment protection and other investment-related provisions. This development would help foreign investors to find the regulatory stability and consistency and the rule of law they are seeking in their investments.

Moreover, since 84 percent of FDI in the last two decades are through acquisitions, U.S. support for takeovers by foreign entities is critical. The U.S. Administration already changed some of its CFIUS rules (review mechanism for foreign acquisitions) to make them more transparent and consistent.

There are many reasons to celebrate this new policy shift. Embrace it.