Keeping a global view
Entrepreneur Cheng sells state’s advantages to foreign companies
- August 30, 2010
Jim Cheng started a company in 1994 and sold it 11 years later when it had grown to $90 million in revenue and 550 employees. But Cheng, now Virginia’s secretary of commerce and trade, was an experienced entrepreneur long before that. “I have been an entrepreneur since I was 11 years old,” he says. “I delivered newspapers when I was 11. I’ve worked all my life.”
Cheng believes that insights gained as a business owner, government contractor and globe-trotting investor will help in his new role. He oversees a department with about 1,800 employees in13 business-related agencies, including the Virginia Employment Commission, Virginia Economic Development Partnership and the Virginia Tourism Corp.
Cheng became secretary of commerce and trade when Republican Gov. Bob McDonnell withdrew the nomination of his original choice, Bob Sledd, the former CEO of Performance Food Group. Democratic critics said Sledd’s membership on the boards of several corporations could create conflicts of interest for the administration. McDonnell made Sledd an unpaid adviser instead.
Cheng, a native of Taiwan, came to the U.S. when he was 3. He grew up in Wisconsin, Illinois and New York state before his father, Richard, a university professor, moved the family to Virginia Beach in 1980 and started a business, ECI Systems and Engineering. Jim Cheng holds a bachelor’s degree in computer science from Old Dominion University, an MBA from the Darden Graduate School of Business Administration at the University of Virginia and a law degree from Georgetown University.
In 1999, his company, Virginia Beach-based Computer & Hi-tech Management Inc. (CHM), was named the fastest-growing in the state by Virginia Business and the Virginia Chamber of Commerce and ranked No. 12 on the Inc. 500. In 2001, KPMG named Cheng Entrepreneur of the Year for Southeast Virginia.
Virginia Business talked with Cheng at his Capitol Square office in Richmond between trade missions to Asia and Europe.
Virginia Business: Why did you decide to come to work for the state?
Cheng: [Since selling CHM in 2005,] I have been dealing with small businesses, working with them as an angel investor. I’ve also been traveling a lot and have been able to see what is going on all over the world. I had been a federal government contractor, so I had an idea what government was about. But when I had a chance to work with this great governor, I thought this is the chance of a lifetime.
VB: Did you know McDonnell before he asked you to be in his cabinet?
Cheng: Well, I spent a lot of time in Virginia Beach, and he was a Virginia Beach delegate, so my family has known Bob McDonnell quite some time now.
VB: Now tell a little bit about your angel investing. What type of companies were you interested in?
Cheng: In the beginning, it was IT companies, but the angel groups that I was associated with in Northern Virginia looked at all sorts of things. And that really helps in this job, because you really can’t choose what industries you look at. You have to see and analyze what goes on in the entire state.
VB: When the cabinet was first drawn up, Bob Sledd was named secretary of commerce and trade and then stepped aside to become an unpaid adviser. How does that work in relation to what you do?
Cheng: He gives us that big-business insight, from a Fortune 500 company. He’s also an entrepreneur. He grew his company from very, very small to 11,000 people. As you mentioned, he’s an unpaid adviser, but his advice is taken very seriously, He has been involved in business recruitment, and that was the governor’s original intent. He understands the needs of large, large businesses, and he speaks their language. We work together very well. He’s a great guy and a really great asset to our team here, as is the lieutenant governor [who has been designated the state’s chief jobs officer].
VB: Virginia has received various accolades from Forbes.com and CNBC. Some folks have said that, while these are great and deserved, they make people complacent and we aren’t making the investments we need to make now for the future. What’s your take on that?
Cheng: The No. 2 ranking [from CNBC] is actually really great because we’ve been either No. 1 or No. 2 for the past four years. I know that this governor is not complacent. That’s why he asked for additional economic development money because part of our investment is making sure that our companies are equipped to do business and add jobs in this state. I don’t agree that it is making us complacent, but I think it’s always possible. We’re trying to be the best we can with limited resources, knowing that the budget is very, very difficult. Compared with what the other states are doing, I think we’re doing great. But are there places where we could be doing more? Absolutely. I wish we could.
VB: Where are overseas markets where you see big opportunities?
Cheng: Right now our largest trading partners include Canada. That’s our No. 1, and it will probably continue to be No. 1. Europe has always been great, and we don’t want anyone to think that is not going to continue. However, I think the fast-growing economies, India and China, especially, offer the opportunity to expand. They are starting to brand, and they are making acquisitions. And when they acquire American companies, many are distressed companies. Let’s give them the option [of moving] that distressed company over to Virginia where it will have a greater fortune and be better able to grow.
VB: I have heard that personal relationships are important in establishing trade channels overseas. Is that correct?
Cheng: That is. Every country, every culture has its decision-making process. In many cases, the senior head of the company will make the decision. Japan is more consensus building [in making decisions], but in China there is more likely to be a single decision maker.
VB: What did you pick up in your travels that you are using in your strategies now in reaching out to trade partners?
Cheng: When I traveled, I was able to experience how other countries recruit for business. They are very aggressive. They take a concierge approach, red carpet treatment. They really know how to take care of possible recruitment candidates. So we really have to step up to the plate in this global competition for business…
We have found in our [trade mission] travels that Virginia might not be the first locale that people think of when they think of the United States. We want them to put Virginia on top. That’s why we are out there. I see that as our top priority, to get our message out, not just overseas, but also domestically. We want people to know what a great place it is to live, to raise your kids and run a business.