Archive for the ‘Foreign Direct Investment’ Category

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An American Delegation of States in Paris (to Promote FDI)

December 11, 2017

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By Marie-Josee Andrieu, Investment Specialist at the U.S. Embassy in Paris, France, SelectUSA

SelectUSA logoFrance is the sixth-largest source of foreign direct investment (FDI) into the United States and an important international trading partner. Majority French-owned firms directly support more than 677,000 American jobs, while majority U.S.-owned firms directly employ 440,000 French workers. A central goal of the U.S. Embassy in Paris is to strengthen these bonds through increased cooperation and understanding.

SelectUSA and the Council of American States in Europe (CASE) recently hosted a “Set Up, Expand, and Succeed in the United States” seminar for 30 French companies planning to invest in the United States. We were joined by economic developers from 10 CASE member states: Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Ohio, Missouri, and South Carolina.

A panel of FDI experts provided attendees with information on the U.S. investment climate, as well as legal and regulatory considerations. French aerospace company Safran, which launched its U.S. operations in the 1970s, joined the panel to discuss its experiences.

Initial discussions between French companies and U.S. economic developers took place during more than 80 meetings at the event. We look forward to a continuing dialogue among these companies and CASE to promote potential investments. We hope to see many of the participants at the upcoming 2018 SelectUSA Investment Summit, June 20-22, in Washington, D.C.

For more information on the premier FDI event in the United States, please visit www.selectusasummit.us.

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Registration Now Open For 2018 SelectUSA Investment Summit

December 1, 2017

This post contains external links. Please review our external linking policy.

This post originally appeared on the Department of Commerce blog.

Post by Wilbur Ross

U.S. Commerce Secretary Wilbur Ross speaking to the audience at the 2017 SelectUSA Investment Summit.
U.S. Commerce Secretary Wilbur Ross at the 2017 SelectUSA Investment Summit.

Today, I am pleased to announce that registration is open for the 2018 SelectUSA Investment Summit, with this year’s theme of: Invest Here. Grow Here. Succeed Here.

The SelectUSA Investment Summit will take place on June 20-22, 2018, at the Gaylord National Resort and Convention Center near Washington. The goal is to connect global business leaders with U.S. states and their economic development organizations (EDOs) to facilitate foreign direct investment (FDI) in the United States.

The Summit is the pre-eminent event highlighting inbound investment opportunities throughout the United States, and our record of success proves that. Since our first Summit four years ago, participants have announced more than $71 billion in new investment projects into the United States, supporting thousands of jobs, expanding exports, and driving innovation through manufacturing, services, and increased research and development.

The Summit has helped the United States attracts more FDI than any other country in the world, with a total of $3.7 trillion at the end of 2016. These investments support more than 13 million direct and indirect U.S. jobs, and account for more than one-quarter of all U.S. goods exports of $353 billion.

The 2017 Summit attracted more than 3,000 attendees, including more than 1,200 global investors from 64 different markets and more than 600 economic development officials from 51 states and territories.

The Summit displays the pro-growth environment President Trump is creating through initiatives such as regulatory relief, tax reform, and increased energy production. I am confident these will help to maintain the United States as the #1 investment destination in the world. I look forward to seeing you next June at the Summit.

For registration and information regarding the 2018 SelectUSA Investment Summit, go to www.selectusasummit.us.

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Celebrating Manufacturing Day with a Focus on FDI

October 23, 2017

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By Mark Schmit, National Accounts Manager, Manufacturing Extension Partnership, National Institude of Standard and Technology (NIST) 

An employee of UK-based manufacturing company Domtar provides high school students with a tour of the company’s facility in Rock Hill, S.C. on Oct. 6.

An employee of UK-based manufacturing company Domtar provides high school students with a tour of the company’s facility in Rock Hill, S.C. on Oct. 6.

Although I believe Manufacturing Day is an everyday affair, the official 2017 Manufacturing Day has come and gone. On October 6, modern-day manufacturing was showcased to students, teachers, parents, prospective employees, elected officials, and more at over 2,800 separate events across the country.

It is neither a stretch nor an exaggeration to believe that Manufacturing Day 2017 accomplished what it set out to do—celebrate modern manufacturing and inspire the next generation of manufacturers in this country. Manufacturers build the things that power, move, and shape America. On October 6, manufacturers across the country opened their doors to show their community what manufacturing is all about.

South Carolina manufacturers have been a mainstay of Manufacturing Day participation since the beginning. Year after year, they have opened their doors to educate visitors. This year, 19 events were held statewide, six of which the South Carolina Manufacturing Extension Partnership Center (SCMEP), was a hosting partner. I want to highlight three of those partnership-led events that celebrated not only partnerships, manufacturing and American jobs, but also FDI, an important part of modern manufacturing in America:

  • Swiss Krono hosted a presentation and plant tour in Barnwell, S.C., for 10 attendees. Swiss Krono LLC, a division of Swiss Krono Group, began distribution in the United States in 2000, and opened its current Barnwell manufacturing facility in 2005. In Barnwell, Swiss Krono LLC creates virtually any style, shape, finish, texture, scrape, bevel, locking system, thickness, size and attached pad of laminate flooring planks sold through distributors, dealers and chains nationwide.
  • Located in Newberry, S.C., Komatsu hosted a presentation and plant tour in honor of Manufacturing Day for 74 attendees. Komatsu America Corporation is a U.S. subsidiary of Japan-based Komatsu Ltd., the world’s second largest manufacturer and supplier of earth-moving equipment, consisting of construction, mining, and compact construction equipment.
  • SCMEP partnered with UK-based Domtar in Rock Hill, S.C., to host a presentation and plant tour for 25 attendees, including students from the Floyd Johnson Technology Center. The event was so successful that it was covered by both local and state level media. Domtar is a leading provider of a wide variety of fiber-based products including communication, specialty packaging papers, market pulp and absorbent hygiene products.

These are just a few examples of the events coordinated by the MEP National Network across the country for the 2017 Manufacturing Day festivities.

More success stories and information on how to get involved are available here, and remember to mark your calendars for next year’s Manufacturing Day: October 5, 2018!

A member of the Federal Interagency Investment Working Group, NIST Manufacturing Extension Partnership works with SelectUSA, the sole federal program dedicated to promoting and facilitating foreign direct investment (FDI) in the United States. Together, these entities partner to encourage international companies to invest in the U.S. manufacturing industry.

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FDI Strengthens America’s High-Tech Competitiveness

October 5, 2017

By Maureen Book, Research Analyst, SelectUSA 

Map of United States highlighting high-tech employment concentration by metro area, 2015 Source: U.S. Census Bureau, 2015 County Business Patterns, Accessed July 6, 2017, factfinder.census.gov

High-Tech Industry Employment Concentration, High-Tech Employment/All Employment, by Metro Area, 2015 Source: U.S. Census Bureau, 2015 County Business Patterns, Accessed July 6, 2017, factfinder.census.gov

SelectUSA released its second industry-focused report: “High-Tech Industries: The Role of FDI in Driving Innovation and Growth” on Sept. 19. This report provides an in-depth look at high-tech clusters in the United States, and gives the first-ever analysis of the role of foreign direct investment (FDI) in high-tech industries. The report’s biggest takeaway is that FDI plays a significant role in these industries.

Where are high-tech clusters?

High-tech industries have a concentration of science, technology, engineering, and mathematics  and employ more than twice that of the national average. After analyzing the U.S. high-tech industry and considering participation of both foreign and domestic firms, SelectUSA explored the geography of high-tech companies in the United States by state, to identify large groups, or clusters, of employment.  The top employers of high-tech workers were California, Texas, and New York, while the District of Columbia, Virginia, and Washington boast the highest employment per capita of high-tech jobs.

High-Tech Clusters by Metro Area

Looking at metro areas with the highest concentration of high-tech employment, SelectUSA found that San Jose, Calif., tops the list with more than 34 percent of local employment in high-tech industries. They were followed closely by Elkhart, Ind., with nearly 33 percent, and Huntsville, Ala., with more than 31 percent. While the concentration in San Jose might not be surprising because it is the largest city in the Silicon Valley area, Elkhart and Huntsville both have industry concentrations nearby to make them important locations for high-tech companies. Elkhart’s economy is heavily concentrated in the transportation equipment manufacturing industry, and centers around recreational and commercial vehicle manufacturing. Huntsville is home to many aerospace and defense contractors, and military technology firms.

The Role of Foreign Direct Investment (FDI)  

The data cited is provided by the Bureau of Economic Analysis. 

Line graph showing FDI impact in U.S. high-tech industries from 2007-2015. Three outputs are measured: R&D, contributions to U.S. exports and their contribution to value-add. FDI’s contribution to value-add has been rising steadily over time, except for the dips in 2008-2009, where all indicators experienced a shift downwards due to the recession. FDI’s contribution to U.S. goods exports has also been rising since 2009, except for the past couple of years, which have seen a decline. R&D spending has remained relatively constant from 2007-2015.

FDI Impact in U.S. High-Tech Industries, by Majority Foreign-Owned U.S. Affiliates Source: Source: Department of Commerce, U.S. Bureau of Economic Analysis, Accessed Oct. 24, 2016, http://www.bea.gov/iTable/index_MNC.cfm Note: Data for some high-tech industries has not been included due to lack of available data.

Using our definition of high-tech industries and data published by the Bureau of Economic Analysis, SelectUSA looked at the role that FDI plays in high-tech industries. For those not familiar with the terminology, FDI generally captures a long-term relationship with the management of a foreign enterprise, which is usually linked with the real output of the country in which it operates.

Our data found that FDI stock in high-tech industries reached more than $1.6 trillion in 2016, and supported 2.1 million jobs in the United States. In fact, the high-tech component of FDI is quite robust; nearly 44 percent of all FDI in the United States is invested in high-tech industries.

Compensation, R&D, Exports, and Value-added Activities

Beyond employment, one must also acknowledge the significant impact that foreign firms in high-tech sectors play in other economic activities. For instance, U.S. affiliates of foreign-owned firms on average offer a higher compensation to U.S. workers than domestic . But FDI in high-tech industries offer a greater average compensation than other FDI companies in other industries. U.S. affiliates of foreign-owned firms also greatly contribute to the innovation sector of our economy, spending nearly $42 billion on research and development (R&D) in the high-tech sector. In 2015, they also contributed $154 billion towards U.S. goods exports and more than $373 billion towards value-added activities.

Historical-cost basis bar graph showing FDI entering the United States since 2007. Blue bars show FDI entering the country, but not classified as high-tech, and the red bar is all FDI entering the U.S. that is classified as high-tech. The gray line shows the percentage of high-tech FDI compared to all FDI entering the U.S. Looking at 2016, we can see that high-tech FDI accounted for nearly 44% of all FDI in the U.S. and amounted to $1.6 trillion. FDI in high-tech has also been growing by an average of more than 10% each year since 2009.

High-Tech Position in the United States, Historical-Cost Basis Source: Department of Commerce, U.S. Bureau of Economic Analysis, Accessed Aug. 17, 2017, http://www.bea.gov/iTable/index_MNC.cfm

Source Markets Supporting High-Tech

We also find that Germany, the United Kingdom, France, and Japan are among the largest source markets for R&D spending, exports, and value-added activities in high-tech industries. Beyond that, they are also several of the United States’ leading trading partners. Collaborating with them on FDI reinforces the trade relationship and strengthens our nation’s bilateral ties with these partners.

For more information:

Please visit selectusa.gov to view the full report, other industry reports, international and domestic FDI fact sheets, and SelectUSA’s data visualization tool, SelectUSA Stats.

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Help Us Plan the 2018 SelectUSA Investment Summit

September 19, 2017

This post contains external links. Please review our external linking policy.

By Fred Volcansek, Executive Director, SelectUSA

It’s already that time of year again: our team is gearing up for the next SelectUSA Investment Summit. On June 20-22, 2018, the SelectUSA team will join thousands of international business investors, economic developers, and service providers at the Gaylord National Resort and Convention Center to convene the highest-level event of its kind in the United States.

Photo from the 2017 SelectUSA Investment Summit, June 18-20, 2017. Pictured (from left to right): Safra Catz, CEO, Oracle; Gilbert Lee, CFO, Fuling Global, Inc.; Greg Scheu, President, ABB Americas Region; Ludwig Willisch, President, CEO, and Chairman of the Board, BMW (U.S.) Holding Corp.

Photo from the 2017 SelectUSA Investment Summit, June 18-20, 2017. Pictured (from left to right): Safra Catz, CEO, Oracle; Gilbert Lee, CFO, Fuling Global, Inc.; Greg Scheu, President, ABB Americas Region; Ludwig Willisch, President, CEO, and Chairman of the Board, BMW (U.S.) Holding Corp.

This past June, SelectUSA held its largest Investment Summit yet. Hosted by Secretary of Commerce Wilbur Ross and headlined by Secretaries Alexander Acosta (Labor), Steven T. Mnuchin (Treasury), and Rick Perry (Energy), as well as the UK Secretary of State for International Trade Liam Fox, the 2017 Summit brought more than 2,800 international participants together. The 79,000-sq.-ft. Exhibition Hall was filled to capacity with economic development organizations from 51 U.S. states and territories. CEOs from prominent U.S. and foreign companies participated in armchair discussions and breakout sessions to discuss the latest developments in FDI. I encourage you to read my summary blog post here for more details.

Of course, none of this happened overnight; planning for this important event is neither quick nor simple. Our team spends many months fine-tuning and developing ideas into reality. We are dedicated to bringing high quality discussions and influential thought leaders and executives to the Summit every year. Next year will be no exception, and we want to ensure that it is not only relevant, but full of information that can be instantly used to increase investment in the United States.

The SelectUSA team is planning the plenary and breakout sessions, Investment Academy, Exhibition Hall, and more. There are a lot of exciting developments in the pipeline, but we want you to be involved as well! Indeed, much of the content of previous Summits came from proposals from our stakeholders and partners across the fields of economic development and FDI.

So, we want to hear from you. What are your ideas for topics that should be covered? Do you have a speaker in mind? Is there a subject that needs to be included? The Call for Proposals is live; let us know what should be included in the program.

Additionally, we are looking to fill the Summit events calendar with collateral and spin-off events, hosted by our friends in the economic development community. These events are often where new job-creating investments begin, and we want to build on the success of last year’s calendar. SelectUSA welcomes your input and we want to make the 2018 Summit our best yet.

For more information on the SelectUSA Investment Summit, please visit www.selectusasummit.us.

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#FDIintheUSA: Nearly 7 Million American Jobs

September 7, 2017

By Elizabeth Schaefer, Director of Investment Analysis, SelectUSA

As Director of Investment Analysis, I am responsible for leading SelectUSA’s data evaluation efforts related to foreign direct investment (FDI) promotion in the United States. So, it was with great interest (and I’ll admit excitement) that I reviewed the newly released preliminary 2015 and revised 2014 FDI activity data from the Bureau of Economic Analysis (BEA), which follows the July release of 2016 FDI Inward Stock data.

You may be asking, “What does this mean?” Here’s the breakdown…

The updated data provides a picture of the inward flow of FDI into the United States, as well as the economic activity of U.S. affiliates of foreign-owned firms, from employment figures to research and development (R&D) spending. Overall, the numbers reflect continued, steady FDI growth in America.

But as always, it makes the most sense to start at the beginning.

FDI Definition and Parameters 

FDI, as defined by BEA, generally captures a long-term relationship with the management of a foreign enterprise, which is usually linked with the real output of the country in which it operates. In other words, FDI refers to businesses based in other countries and markets.

At the end of 2016, FDI stock (the total amount) reached $3.7 trillion, a 12.8 percent increase from the revised $3.3 trillion 2015 end-of-year figure. This year, on-year growth outpaces the trend in FDI stock growth over time. On average, during the last five years, FDI stock has grown nearly 9 percent each year.

Sources of Inward FDI Stock 

Sources of Inward FDI Stock

The latest available 2016 data show continued strong investment relationships with the United Kingdom, Canada, Japan, and Germany, all of which are historically large sources of investment into the United States. In fact, these top four sources of direct investment alone account for nearly half of all FDI in the United States. However, compared to the previous year of available data, this concentration has slightly dissipated, with economies like Ireland and Switzerland gaining overall shares of U.S. FDI.

The top four fastest-growing sources of FDI in the United States, calculated by looking at annual growth rates since 2011, are Thailand, Argentina, China, and Singapore. In contrast to the largest sources of investment, these top four relatively new sources of investment make up less than 4 percent of total FDI stock in the United States.

It is important to note that these figures attribute FDI ownership to the market at the top of each investment’s ownership chain – the ultimate beneficial owner or “parent company” – rather than capturing investment passed through intermediate markets via subsidiaries.

Industry Destinations of Inward FDI Stock 

Industry Destinations of Inward FDI Stock

The latest available data continue to show enduring ties between FDI and the manufacturing sector. Manufacturing industries attracted an incredible 41 percent of the FDI pie at the end of 2016. Diving a bit deeper, the chemicals, transportation equipment, food, and machinery manufacturing industries captured 64 percent of manufacturing FDI. Looking at year-on-year changes, the professional, scientific, and technical services sectors experienced dramatic growth, increasing in value by more than 28 percent. The diverse mix of industry and sector destinations for FDI in the United States continues to demonstrate that the United States is an important destination and market for globally competitive companies.

Jobs 

Direct Employment by Majority Foreign-Owned Firms in the United States

In 2015, FDI from majority foreign-owned firms was responsible for 6.8 million direct jobs in the United States, an increase of 1.5 million since the end of the 2009 recession. These are high-impact jobs, too; the average annual compensation per direct worker in 2015 was $79,040, almost a quarter higher than the national average.

Other Related Activities

R&D

FDI continues to enhance U.S. global competitiveness by bolstering R&D spending in the United States. The U.S.-based affiliates of majority foreign-owned firms spent nearly $57 billion on R&D activities in the United States in 2015.

Exports

Linkages between trade and investment also remain clear. Exports of goods shipped by majority foreign-owned affiliates declined nearly 20 percent in 2015 compared to 2014. Despite this dip, the $353 billion in goods exports accounted for 23 percent of all U.S. goods exports.

What’s Next?

You can explore this data and more with SelectUSA’s data visualization tool and updated fact sheets at SelectUSA.gov. Additionally, I encourage you to check out #FDIintheUSA on Twitter, our annual campaign that highlights the economic benefits of FDI at the state/territory and national levels through infographics and interactive conversations.