Archive for the ‘Industry and Analysis’ Category

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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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Helping the American Worker Succeed in a Global Marketplace

September 1, 2017

This post originally appeared on the Department of Commerce blog

labor day graphic

Helping the American Worker Succeed in a Global Marketplace

As we celebrate Labor Day, the U.S. Department of Commerce is proud to express our appreciation for American workers and reiterate our commitment to helping Americans succeed in a global marketplace.  We firmly believe that given a level playing field, American workers can help grow the economy and build a better future for all Americans.

Commerce’s International Trade Administration (ITA) is the premier resource for Americans competing in the global marketplace. ITA strengthens the global competitiveness of U.S. industry, promotes trade and investment, analyzes trade trends and opportunities that help businesses make better decisions and ensures fair trade through the rigorous enforcement of U.S. trade laws and agreements.

ITA offers the expertise needed to connect U.S. businesses with trade opportunities that strengthen their bottom lines and grow jobs here at home. In 2016 alone, we enabled $59 billion in exports and facilitated $5.3 billion in foreign investment into the United States.

From January 20, 2017, through August 29, 2017, Commerce has initiated 58 antidumping (AD) and countervailing duty (CVD) investigations, a 27 percent increase from the previous year, and currently maintains 407 AD and CVD duty orders which provide relief to American companies and industries impacted by unfair trade.

Since President Trump has come into office, ITA has been working hard to fulfill the President’s mission to increase opportunities for American workers. This includes:

  • Fighting for American ManufacturingITA is a leading advocate and ombudsman for advancing the competitive position of U.S manufacturing industries in the global market.  We are ramping up efforts to combat unfair trade practices, intellectual property theft and unfair trade barriers affecting U.S. manufacturing exporters. We provide the data and tools that industry and local government partners need to help companies increase exports, investment and jobs. We also support the negotiation of strong provisions in U.S. trade agreements in key areas, including government procurement, customs and trade facilitation, standards and technical regulations, import licensing, investment, state-owned enterprise behavior, anti-corruption, labor, environment, dumping, subsidies and safeguards. ITA will use its expertise and enhanced data analysis programs to put forth recommendations that will make U.S. companies more competitive and will allow them to support more high-paying jobs here in the United States.

 

  • Empowering American ExportersWith offices in 108 locations across the U.S. and 78 markets worldwide, ITA is uniquely positioned to help American companies overcome the challenges of exporting and capitalize on the opportunities to sell American goods and services around the world. Our team works daily to address the market challenges that U.S. companies – especially small and medium-sized businesses – face when pursuing opportunities in the global marketplace. We provide companies with actionable market intelligence, including practical transactional know-how on the mechanics of exporting, guidance on how to manage and overcome barriers to trade and information on trade financing options.  ITA also provides dedicated advocacy support to American companies competing for foreign civilian and defense government procurements.
  • Fighting Unfair Imports: ITA has a record of accomplishment in delivering timely and responsive relief to American manufacturers and workers from unfair trade and ensuring that U.S. national security interests affected by international trade and investment are vigorously evaluated and addressed. We administer and enforce the U.S. antidumping (AD) and countervailing (CVD) duty laws to defend U.S. manufacturers, ranchers, farmers and workers against injuriously dumped and unfairly subsidized imports. We are steadfast in our work at leveling the playing field through the conduct of these investigations and other proceedings. ITA also provides recommendations and analysis for the Trump Administration of U.S. trade safeguards that protect American industry and jobs. To further strengthen the Department’s abilities to enforce U.S. trade laws, ITA is building capacity to self-initiate trade remedy actions when appropriate.

At home and abroad, ITA works every day to help American workers.  It is our mission and our promise.  Happy Labor Day to everyone!