Tim Kaine, governor of Virginia, seems quite at home in London and delighted to be in the UK while meeting with fDi before a transatlantic business networking reception at the Inner Temple Hall. The governor is in town to promote his state to British businesses – a natural market for Virginia, given the long history of interaction between the two and the state’s status as one of the original 13 British colonies in what is now the United States of America.

British historical links and affectations permeate the state, from its name (a nod to Queen Elizabeth I, the ‘virgin queen’) and its slightly grandiose formal title of the Commonwealth of Virginia, to its charmingly archaic titling of the governor as His Excellency. Virginia is undoubtedly the most ‘British’ of the southern states.

Nevertheless, UK corporates should not expect the governor to come calling with big investment incentives. The way Mr Kaine sees it, US states can be divided into two broad camps: those that offer aggressive fiscal incentives to attract investors, and those that offer a stable long-term business climate.

Reliable climate

He knows which camp Virginia sits in. “We have not been known for the size of our upfront incentive packages, but we have been a triple-A-rated state since bond ratings began in the 1930s, which is a real mark of consistency and reliability in terms of fiscal management,” he says. “Most companies are not making an investment for three years – they want to make an invest that they think will be sound for 20 years, and the companies that think long term gravitate towards us very naturally.”

Virginia has had a consistently favourable corporate tax and regulatory environment, which the governor plans to leave as it is. The Tax Foundation, which measures state tax burdens, puts Virginia in 34th place for state and local tax burden as a percentage of state income. Likewise, the Council on State Taxation says Virginia’s corporate tax burden, measured as a percentage of state GDP, is the second lowest in the US.

In addition to its low-tax credentials, Virginia brings to the table a healthy attitude to global business. More governors are afraid of globalisation than embrace it, Mr Kaine believes, and most of them have had to cope with losses of manufacturing jobs to China, India or Mexico, creating a sense that their states have more to lose from global trade than they stand to gain. Protectionism is on the rise in the US, so this feeling is probably set to become stronger in many places rather than abate.

Not so Virginia, Mr Kaine insists. “We really believe we are connected to the global economy in a way that is unique and that makes us feel confident that we can be real winners in the global marketplace,” he says. “We don’t have any anxieties, fears or concerns [about globalisation].”

Proximity to the nation’s capital, with its international importance and diplomatic community (30% of Virginia’s population lives in the outskirts of Washington, DC) gives the northern part of the state a cosmopolitan flavour and a diverse talent pool. Good global air connections from Dulles International Airport put the rest of the world within easy reach (“Not every state has an international airport with non-stop flights to every continent,” the governor points out), as does the presence of one of the busiest ports on the eastern seaboard at Hampton Roads, Virginia.

Global positioning

Many voters do have concerns about their place in the global economy, however. Maybe not in thriving, wealthy Fairfax County and other parts of northern Virginia, but certainly in the southerly reaches of the state that have sustained heavy job losses in their traditional sectors of tobacco, textiles and furniture-making.

Mr Kaine says that the way to counter these concerns is by celebrating successes when they occur. Recent reasons to celebrate include the decision by an IKEA subsidiary to build its first North American production facility in Danville, near the North Carolina border, with an investment of $280m and the creation of 700 jobs, as well as plans for two Indian companies to carry out polymer production in the same community.

The south-western, Appalachian part of the state, near the border with West Virginia, has struggled to reinvigorate its coal-based economy but also had some welcome project wins lately. For example, CGI-AMS, a Canadian company, and Northrop Drummond (the largest private employer in Virginia) are building technology centres in the small town of Lebanon in south-west Virginia, bringing a combined 700 jobs to the rural area.

Counting gains

Such investments help to convince local people that international business “isn’t just about losing jobs, it’s also about gaining”, says Mr Kaine. “I am really trying to get people to embrace the notion that [globalisation] is the wave of the future, and even if we didn’t like it, we couldn’t do much about it so let’s just roll up our sleeves and go out there and compete and win.”

Fairfax County, just outside Washington, needs no convincing. The booming metropolitan area – one of the country’s fastest growing – is a major American hub for information technology, research and development, biotechnology and defence-related industries.

“I don’t need to worry much about northern Virginia,” Mr Kaine says. “In fact, Fairfax County’s economic development presence is probably bigger than the state’s.”

The county is savvy and successful in its courting of foreign businesses, led by Fairfax County Economic Development Authority (FCEDA) president and CEO Gerald Gordon, who accompanied the governor on his visit to the UK. FCEDA has five overseas offices – which is highly unusual for a US county – as well as one in California, which Mr Gordon jokes is the real “foreign” location to Virginians.

The international and commercial outlook of the state should come as no surprise, considering its foundation, the governor says. “We have been about foreign investment and global trade since Jamestown in 1607,” he says in reference to the first of the former British colonies that are now part of the US. The Jamestown settlers were not fleeing religious persecution or undertaking geographical exploration, as with other early American settlements, he says; they were part of a commercial expedition chartered by King James. Today, 120 British firms have operations in the state of Virginia.

BIOGRAPHY

A law graduate of Harvard University, Mr Kaine spent time as a missionary in Honduras and served four terms on the Richmond City Council, the capital city of the state of Virginia, before being elected mayor of the city.

During his two terms as mayor, he bolstered Richmond’s strong reputation for being business friendly, cut taxes, strove to improve public services and built new schools. His crime-reduction strategy resulted in the local murder rate being halved.

Named lieutenant-governor in 2001, Mr Kaine served with the popular Democratic governor Mark Warner and then took over from him in the governor’s mansion after his term was up in 2005 (Virginia has a one-term limit on governorships).

Mr Kaine campaigned on pledges to improve the education system, find solutions for Virginia’s transportation woes and create new jobs across the state.

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