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Investing in America: An Expanded SelectUSA Guide for Global Companies

May 25, 2021

Bill Burwell is the Acting Executive Director of the Department’s SelectUSA Program

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

When most people think about trade, they probably conjure images of containers shipped across oceans or trucked along highways. It’s true that America is a major exporter of goods and our ports are abuzz with activity around the clock. We’re also a major source of foreign direct investment—and while this trade term may not spark a visual, chances are high that you live in or near a community that benefits from it.

Simply put, foreign direct investment (FDI) is inbound investment into the United States from global companies. For the world, the United States is a great place to do business. We have the laws, the expertise, the work ethic and a world class workforce which businesses need to succeed. In fact, the U.S. has ranked #1 for nine years in a row as the top destination for foreign business investment. At the Department of Commerce, we have a program that specializes in attracting FDI—SelectUSA—and since its inception, it has facilitated more than $84 billion in inbound investment, creating and/or retaining over 106,000 U.S. jobs.

Some foreign investors may be experienced at entering multiple markets and extensively resourced to do so. Others may be exploring opening their first international location and in the early stages of information discovery. Either way, SelectUSA has a suite of services to help all types of investors, and offers counseling, introductions to U.S. economic development organizations, assistance navigating the U.S. federal regulatory system, and finally, products and events to help those investors better understand the U.S market.

One such example of the resources that SelectUSA has developed to assist potential investors is the SelectUSA Investor Guide, which was first launched in 2020.  Authored by competitively selected subject matter experts in their respective fields, the chapters in this guide are designed to give investors an overview of key topics essential to successful investing in the United States. The first edition of the guide covered topics such as an Overall Investment Checklist, Immigration, Business Structure, Taxes, Workforce and FDI Restrictions.

This year we proudly release 5 new additional chapters on the following topic areas:

Each of these chapters will inspire panel conversations at the upcoming 2021 SelectUSA Investment Summit, to be held virtually June 7-11, 2021, and which will be hosted by U.S. Commerce Secretary Gina Raimondo. The Investment Summit is designed for investors of all sizes – including established multinationals, small or medium-sized enterprises, and high-growth start-ups. The event will showcase investment opportunities from every (virtual) corner of the United States, as high-profile business and government leaders share insights on the latest business trends. Participants will find the practical tools, information, and connections they need to move investments forward.

We are thrilled to be a part of May’s World Trade Month celebrations, and even more excited to welcome FDI that helps to create export-supported jobs into the United States. If you are interested in learning more, information about the Investment Summit, including registration details, visit www.selectusasummit.us. It isn’t too late to sign up, and we hope to see you there!

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Global Outlook: United States Remains the Largest Destination for FDI in the World

March 17, 2020
Kara Mazachek is an Economic Research Analyst at SelectUSA.

The United Nations Conference on Trade and Development (UNCTAD) released the latest issue of its Global Investment Trends Monitor in January. With this release, the Investment Research team at SelectUSA was excited to analyze the latest global 2019 numbers and better understand a few of the key global foreign direct investment (FDI) trends during the last year!

In 2019, global FDI flows totaled $1.39 trillion, which was a one percent decrease from $1.41 trillion in 2018. These global flows reflect both mergers and acquisitions (M&As) and greenfield investment activity. This slight decline in FDI flow accompanied global patterns of slowed economic growth and policy uncertainty. While there is great country-specific variation in trend, FDI flows to developed countries decreased six percent to a historically low level of $643 billion. Simultaneously, flows to developing countries were constant at $695 billion. Announced greenfield projects, an indicator of future trends, overall performed better than cross-border M&As in 2019. Globally, announced greenfield projects decreased 22 percent, compared to a 40 percent decrease in announced cross-border M&As.

UNCTAD Blog 031720

In contrast to larger declines in other developed economies, the United States received consistent inward FDI between 2018 and 2019, with $251 billion in inflows in 2019. These preliminary estimates indicate that the United States is still the largest destination for FDI in the world, with inflows at least $100 billion greater than those of any other destination market. Germany, Japan, and the Netherlands were the largest source markets of FDI flows to the United States, while U.S. inflows from Canada and the broader European Union (EU) significantly declined.

Overall, the EU saw a 15 percent decrease in FDI inflows to $305 billion. Despite being the top destination for FDI in Europe, the United Kingdom’s FDI inflows fell by six percent as it approached Brexit. France and Germany also were in the top 10 destination markets for FDI inflows at $52 billion and $40 billion, respectively.

FDI inflows to developing Asia made up one-third of global FDI flows in 2019, despite its FDI value declining six percent from 2018. Hong Kong drove much of this drop as its own inflows fell by 48 percent amid divestment and unrest. However, Hong Kong remained the sixth-highest destination market in the world for FDI. Inflows to China saw almost no change from 2018 to 2019, leaving China the second-highest destination market for FDI in the world at $140 billion, followed by Singapore at $110 billion.

Lastly, despite these trends in other parts of the world, the Latin America and Caribbean region saw inflows increase by 16 percent, reaching $170 billion in 2019. Within the region, Brazil’s inward FDI flows increased by 26 percent to $75 billion, cementing itself as the fourth-largest recipient of FDI in the world. UNCTAD gives some of the credit for this jump to Brazil’s new privatization program, which launched in July 2019 as an effort to revitalize the economy.

What does this mean for 2020? The global outlook is optimistic! UNCTAD projects that global FDI flows will increase slightly during the next year alongside continuing high corporate profits and growing international trade. UNCTAD also expects GDP growth and capital investment to increase globally. While UNCTAD noted a 22 percent decrease in global greenfield FDI announcements from 2018 to 2019, the opposite was true for the United States. Data from fDi Markets indicated that the value of greenfield FDI announcements into the United States totaled $91.7 billion in 2019, a 26.9 percent increase from 2018.

With consistently strong U.S. growth in greenfield FDI and a positive global forecast, SelectUSA is excited to welcome and facilitate even more greenfield investment in the United States throughout 2020.

About SelectUSA
Housed within the U.S. Department of Commerce’s International Trade Administration, SelectUSA promotes and facilitates business investment in the United States. To learn more about SelectUSA’s services, the U.S. business and investment climate, and how FDI benefits the U.S. economy, visit selectusa.gov and follow @SelectUSA on Twitter.

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BEA’s Latest FDI Data (Again) Confirms It: There’s No Better Place to Invest and Do Business Than the United States

December 12, 2019

Kara Mazachek is an Economic Research Analyst at SelectUSA

As we approach the end of 2019, we’re reflecting on the positive state of foreign direct investment (FDI) in the United States. The most recent data update from the U.S. Bureau of Economic Analysis (BEA) was great news for economic growth and FDI’s important role in the U.S. economy.

By the end of 2017, 7.4 million workers were employed by majority foreign-owned firms in the United States, a 2.8 percent increase from 2016.[1] This accounts for nearly six percent of all private-sector employment in the United States and approximately seven percent of total U.S. business-sector GDP. Despite the United Nations Conference on Trade and Development’s (UNCTAD’s) World Investment Report finding the third consecutive annual decline in global FDI flows in 2018 – down 13 percent from $1.5 trillion to $1.3 trillion – the United States has consistently remained the largest recipient of FDI in the world. These data points further confirm that the United States is and will continue to be the best place to invest and do business.

The benefits don’t stop there. FDI accounted for 16.4 percent ($258.6 billion) of total U.S. private business capital expenditures in 2017. Foreign-owned companies also increased their U.S. R&D spending by 8.1 percent to $62.6 billion and accounted for a quarter ($382.7 billion) of total U.S. goods exports in 2017. These firms’ value-add to U.S. GDP increased by more than eight percent to $1 trillion in 2017 alone.

Specifically, the three global markets that contribute the most to FDI-supported employment in the United States are the United Kingdom, Japan, and Germany, which is not surprising as these markets historically are among those with the most FDI stock in the United States and are also among the largest economies in the world. At the national level, the states with the highest percentage of FDI-supported employment are Kentucky, South Carolina, and New Jersey, where over eight percent of employment is supported by foreign-owned firms. In all three states, those firms employed the most workers in the manufacturing industry.

So, what can we expect in 2020? UNCTAD reports that greenfield project announcements were up 41 percent in 2018, indicating forward investing plans. Further, the FDI Confidence Index estimates the United States will attract the most investment in the next three years due to our large domestic market, continued economic expansion, and technological and innovative capabilities. Again, this confirms what we already know, which is that the United States has the right mix of talent and innovation for companies to thrive in a competitive global economy. To ensure this trend continues, SelectUSA will continue to support business investment in the United States and work to give global business investors and U.S. economic developers the information and tools they need to succeed in the U.S. economy.

Stay Current on FDI
Keep your eye out for BEA’s next FDI data release in July 2020 that will provide  new investment opportunities in the United States. For more information on FDI in the United States, sign up for email updates from SelectUSA and visit SelectUSA.gov for resources such as FDI fact sheets, interactive data tools, and informative reports. You can also follow and contribute to our #FDIintheUSA campaign on Twitter!

About SelectUSA
Housed within the U.S. Department of Commerce’s International Trade Administration, SelectUSA promotes and facilitates business investment in the United States. To learn more about SelectUSA’s services, the U.S. business and investment climate, and how FDI benefits the U.S. economy, visit selectusa.gov and follow @SelectUSA on Twitter.

[1] Latest available data

 

 

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FDI in Agribusiness: Feeding the U.S. Economy

November 21, 2019

Kimberly Aagaard is a Research Analyst at SelectUSA

In honor of Thanksgiving and the recent addition of the agribusiness industry page to the SelectUSA website, it is a great time to look at how foreign direct investment (FDI) in agribusiness helps support feasts and festivities around the country.

What is agribusiness?
By SelectUSA’s definition, the agribusiness industry is made up of establishments engaging in livestock, crop production, forestry, aquaculture and fishing, hunting, and agricultural chemical manufacturing.*

What has FDI contributed to the U.S. agribusiness industry?
Recently, SelectUSA worked with Charoen Pokphand Group (CP Group), a 98-year-old Thai company, to help the company establish a U.S. subsidiary called Homegrown Shrimp USA, LLC. The company announced earlier this year that it will produce shrimp with a focus on nutrition and sustainability and invest approximately $6.6 million in a recirculating farm outside of West Palm Beach, Florida. In addition to investing in the community and producing a more reliable supply of seafood, Homegrown Shrimp USA will use innovative aquaculture technology in its land-based farm. CP Group has also undertaken efforts to collaborate on research with the University of Florida’s Institute of Food and Agricultural Sciences.

Looking at the national level, the agribusiness industry’s FDI position in the United States was valued at $14.1 billion in 2018, according to the Bureau of Economic Analysis. In 2016, agribusiness FDI also supported an estimated 14,700 U.S. jobs, $114 million worth of research and development spending, and over $1.1 billion in U.S. exports!

According to fDi Markets, announced FDI greenfield projects in the U.S. agribusiness industry have totaled approximately $3.3 billion in the past five years. Pesticides, fertilizers, and other agricultural chemicals made up the largest agribusiness sub-sector by announced capital investment from September 2014 to August 2019 (over $1.9 billion).

In the past five years, the top sources of U.S. agribusiness greenfield projects by announced capital investment are Norway ($809.7 million), Germany ($674.3 million), Hong Kong ($373.4 million), Canada ($372.5 million), and Brazil ($259.6 million). In addition, Germany was the largest source market by number of projects (22) and by estimated jobs created (1,913) from September 2014 to August 2019.

Norway was the top source market of U.S. agribusiness FDI in the past five years.
Investors from the top 10 source markets announced a total of $3.1 billion in greenfield capital investment in U.S. agribusiness between September 2014 and August 2019.

Chart for FDI in Agribusiness 112119

 

Agribusiness FDI in the United States not only brings investment and new jobs to our communities; it also brings us the delicious products of those investments. As Thanksgiving approaches, SelectUSA is grateful for all FDI, especially that of the agribusiness industry.

To learn more about how SelectUSA supports FDI in all industries, sign up for our email updates and visit SelectUSA.gov for resources such as FDI fact sheets, interactive data tools, and informative reports. You can also follow and contribute to our #FDIintheUSA campaign on Twitter!

About SelectUSA
Housed within the U.S. Department of Commerce’s International Trade Administration, SelectUSA promotes and facilitates business investment in the United States.

*SelectUSA categorizes agricultural machinery in the machinery and equipment industry and categorizes food processing in the consumer goods industry

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The Intersection of Manufacturing & FDI: Job Creation

October 4, 2019

SelectUSA’s Investment Research Team works to create an environment where data inspires, supports, and informs investment policy and promotion.

This Manufacturing Day we are highlighting the positive impact of investors in manufacturing. Whether a business decides to expand existing operations in the United States, or a new international investor opens a manufacturing plant for the first time, U.S. communities reap rewards. These benefits can be seen in stories across the country.

Re-selecting the USA
Earlier this year, SelectUSA released a report titled Reinvesting in the USA: A Case Study of Reshoring and Expanding in the United States. It profiled six examples of U.S.-based businesses that chose to reshore or expand operations in the United States rather than abroad. Each of these companies had a positive impact on the U.S. workers they employed and the communities surrounding them – the kind of real-world details about manufacturing that can often get lost in macroeconomic analysis.

Companies such as Sherrill Manufacturing support U.S. jobs with their dedication to manufacturing in the United States. Between 2013 and 2014, Sherrill reshored its entire operation from Mexico to a facility in upstate New York. Sherrill’s “factory-to-table” model not only allows consumers to purchase directly from the manufacturer, but also enabled the company to more than double manufacturing employment at its New York facility. Today, Sherrill Manufacturing employs more than 50 workers.

Sherrill’s investment also supports a historic manufacturing community in upstate New York, ranging from suppliers who provide the company with U.S.-made steel to small businesses that serve manufacturing workers, such as the local pizza parlor. By choosing to reinvest in the United States, Sherrill Manufacturing has helped strengthen the local manufacturing industry, enhancing employment and the economic gains that accompany it.

The Bigger Picture: FDI in U.S. Manufacturing
It is also useful to look at the macroeconomic data on manufacturing investment in the United States. Our colleagues at the Bureau of Economic Analysis provide robust data on foreign direct investment (FDI) in the United States each year. In 2018, investment in the manufacturing sector represented 41 percent of the total FDI position in the United States, up from 32 percent in 2008. With a compound annual growth rate (CAGR) of 13 percent during the last five years, FDI in U.S. manufacturing is outpacing the all-industry comparable CAGR of 10 percent economy-wide growth. This increased representation of manufacturing in the U.S. FDI portfolio speaks to U.S. manufacturing competitiveness in the global economy.

FDI has an undeniable impact on the U.S. economy and U.S. workers. According to the latest available data, FDI directly supported nearly 2.5 million manufacturing jobs in 2016. This means that investment by foreign-owned firms in the United States was responsible for 20 percent of all U.S. manufacturing employment that year.

Of all source markets in 2016, Japan supported the largest number of jobs in the manufacturing industry (approximately 397,000), followed by Germany (287,800), the United Kingdom (275,600), and France (213,300). Of the FDI in manufacturing subsectors, transportation equipment supported the most jobs (509,900), followed by chemical manufacturing (364,400), and food manufacturing (301,000).

Where is manufacturing FDI going in the United States?
FDI in the manufacturing industry supports jobs in all U.S. states, territories, and the District of Columbia. Not surprisingly, the states with the highest levels of employment supported by manufacturing FDI are some of the most populous in the nation: California (where approximately 200,000 FDI manufacturing jobs are supported – the highest total of any state) and Texas (181,500).

In addition, manufacturing FDI is responsible for a significant component of overall employment resulting from FDI. In 10 states, the majority of FDI-supported jobs are in the manufacturing sector, with the highest percentage in South Dakota (66 percent of jobs supported by FDI resulting from the manufacturing sector), Michigan (64 percent), and Nebraska (63 percent).

Percentage of FDI Employment in Manufacturing 2016

Graphic for SUSA Mfg Blog 100219
Data Source: Bureau of Economic Analysis. Accessed 9/2019.

On a regional basis, the total employment resulting from FDI in manufacturing was highest in the Southeast (698,500) and the Great Lakes (590,900). However, the average employment level of a Great Lakes state resulting from manufacturing FDI was more than twice as high as that in a Southeast state (118,180 on average in a Great Lakes state compared to 58,208 in a Southeast state). As a result, more than 51 percent of all FDI-supported employment in the Great Lakes was in the manufacturing sector.

SelectUSA Loves Manufacturing in the United States
Whether you’re looking at a favorite local restaurant’s day-to-day business or state-level economies, domestic manufacturing’s contributions cannot be understated. Both the FDI of international companies in the United States and the reinvestment efforts of domestic firms provide this key support. On this Manufacturing Day, we’d like to applaud them and the hardworking U.S. workers they employ!

For more information
For more information on FDI in the United States, sign up for email updates from SelectUSA and visit SelectUSA.gov for resources such as FDI fact sheets, interactive data tools, and informative reports. You can also follow and contribute to our #FDIintheUSA campaign on Twitter!

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Business Incentives Continue to Play a Key Role in U.S. FDI Leadership

September 17, 2019

SelectUSA is a program led by the U.S. Department of Commerce that facilitates and promotes job-creating business investment into the United States

Global companies are drawn to the United States for many reasons: a highly productive and educated workforce, low-cost supply of energy, direct access to the world’s most robust capital markets, and much more. But how much of our nation’s continued success in this arena should be attributed to incentives given to businesses by state and local governments? They receive a great deal of attention, but how much do companies actually consider incentives when determining where to invest?

Business executives are quite forthcoming with answers to the question. Many of the companies that SelectUSA has assisted have made it clear: incentives are a very important consideration, but not the most important one. Companies consider a mix of variables and factors: costs, location, supply chains, ease of doing business, etc. Consistently, the United States stands out as the best place to do business.SelectUSA_FullColor-hires_575 (002)

The United States has topped the A.T. Kearney FDI Confidence Index seven years in a row. The Index, a survey of global CEOs’ confidence in the world’s markets, highlights the top factors considered in business expansion and how markets stack up. In 2019, pro-business regulations, competitive tax rates, and economic expansion helped lead to another year of U.S. leadership in international investment. But economic incentives were also ranked among the top of the list of considerations.

State and local governments create incentives packages for companies in order to attract investment and create job opportunities in their local areas. Often given on the basis of job creation or economic impact, incentives can include grants, loans, tax and job training subsidies. These incentive packages can sometimes total in the millions or billions of dollars, but their size is contingent on the magnitude of the proposed business project. The federal government also offers a wide array of incentives, from clean energy production tax credits to export credit insurance for small businesses.

The investment process itself can seem complicated, and many companies don’t know where to start. Luckily SelectUSA is here to help companies navigate the process and connect with the right resources and incentives at the local level. Visit selectusa.gov to learn more. The United States is open for your business.

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BEA’s New FDI Numbers Point to Sustained Economic Growth for the USA

August 23, 2019

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

Audrey Cheng is an intern for SelectUSA

Graphic stating: FDI IN THE USA, $4.34 TRILLION, 7.1 MILLION U.S. JOBS DIRECTLY SUPPORTEDThe data is in: the United States Bureau of Economic Analysis (BEA) released the most recent numbers for global foreign direct investment (FDI) into the United States, and they’re good news for the country’s continued prosperity. Total stock of FDI in the United States reached $4.34 trillion in value in 2018. This is an incredible $319.1 billion increase from 2017, when we had just surpassed $4 trillion in FDI.

Here is a breakdown:

  • The largest increases were in the industries of manufacturing, retail trade, and real estate.
  • Manufacturing accounted for 40.8 percent of the total FDI value in the United States, followed by 12.1 percent in finance and insurance.
  • Based on the country of the ultimate beneficial owner, five countries accounted for more than half of all the FDI in the United States. These countries aren’t just top sources of FDI – they represent the strongest economic relationships in the world. In order, they are: The United Kingdom, Canada, Japan, Germany, and Ireland.
  • Majority foreign-owned companies in the United States earned income of $208.1 billion on their cumulative investment in the United States. This is nearly 20 percent higher than in 2017.

To all of us at SelectUSA, this increase in investment is an assuring pat on the back but not a surprise. It reinforces what we know: America is the premier destination in the world for FDI.

As we look back at the BEA numbers of the past fiscal year, we are also looking toward a positive future. The 2019 A.T. Kearney Confidence Index ranked the United States as the nation likely to receive the most FDI in the coming three years. The World Bank’s Doing Business 2019 named us among the top nations globally for the ease of doing business—and number one among countries with populations more than 100 million.

This shows that the United States is doing all the right things to give companies the opportunities they need to be competitive. Businesses of all sizes have recognized that our huge consumer base, productive workforce, and pro-business policies here are unparalleled anywhere else in the world.

The U.S. economy is thriving and the continued increase in FDI will create even more career opportunities for hardworking Americans into the future. SelectUSA will continue to make sure that companies have all the resources they need to be successful in the United States.

To learn more about SelectUSA’s services, the U.S. business and investment climate, and how FDI benefits the U.S. economy, visit selectusa.gov and follow @SelectUSA on Twitter.

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New UN Report Highlights United States Lead in Global FDI and Digital Economy

August 15, 2017

By Harrison Frye, Intern, SelectUSA

Foreign Direct Investment (FDI) plays an important role in the U.S. economy by creating jobs, increasing wealth, and raising living standards. The United States continues to hold the largest amount of FDI in the world. A new report released by the United Nations Conference on Trade and Development (UNCTAD) showed that the United States was also the largest recipient of FDI flows in 2016.

UNCTAD data reflecting FDI inflows, measured in billions of dollars.

UNCTAD data reflecting global FDI inflows, measured in billions of dollars.

How can different numbers tell the same story? FDI is measured in both stocks and flows. Flows are the recorded value of cross-border transactions during a certain period of time. Inward flows are the transactions that increase the net amount of investment foreign investors have in enterprises within the reporting country’s borders. This is different from FDI stocks, which measure the total level of foreign direct investment at any point in time.

After an impressive rise in 2015, global FDI flows faltered during the past year, falling by 2 percent to $1.75 trillion.  This drop can be attributed to weak economic growth and significant policy risks, as seen by multinational enterprises.

This decline was not felt in the Unites States, however, which saw a 12 percent increase in inflows. The $391 billion of inflows to the United States was a record, and accounted for a quarter of global FDI inflows. The large increase in FDI into the country can be attributed to high investor confidence in the American economy and our developed workforce. Moreover, UNCTAD’s business survey found the United States was the top prospective host economy for FDI looking forward to 2017-2019.

More than half of the FDI inflows to the Unites States were in manufacturing, and about one-fifth were in finance and insurance. New apprenticeship programs proposed by the White House are aimed at preparing the next generation of Americans to be successful workers in the years to come, keeping the United States as the most attractive destination for potential investors.

Another area where the United States is seeing significant growth is the digital economy – the secondary focus area of the UNCTAD report. Noting that digital multinational enterprises (MNEs) are expanding at a dramatically faster rate than other multinationals, the report highlights notes that more than 60 of the top 100 digital MNEs are U.S.-based (for Internet platforms this rises to 10 of the top 11). This in turn is shaping global investment patterns in the 21st century economy. Demand-side factors such as income levels, population size, economic growth, and education levels are key elements in determining the amount of private investment in internet infrastructure, putting the United States ahead of other global competitors in attracting digital enterprises.

Are you interested in exploring the digital economy? SelectUSA’s investment specialists help companies understand the overall economy and investment trends using consumer information and industry overviews. SelectUSA also helps connect potential investors to economic development organizations, who then provide guidance and incentives at the local level. Learn more at www.selectusa.gov.

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Foreign Direct Investment: Driving Global Competitiveness and Innovation

July 7, 2017

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

The following is a cross-post from the U.S. Economic and Development Administration 

Foreign Direct Investment (FDI) plays an important role in the U.S. economy. It leads to the creation of jobs, an increase in wealth and living standards, and overall growth and innovation that drive the U.S. economic competitiveness. Last month, the Commerce Department hosted the 2017 SelectUSA Investment Summit providing a platform to communicate economic priorities and affirm the United States as the number one destination in the world for foreign direct investment.Direct Employment by majority foreign-owned firms in the US graph

The United States remains an attractive destination for FDI for a variety of reasons, including a large consumer base, a productive workforce, a highly innovative environment, and legal protections. As a result, foreign firms make investments in the United States on a regular basis by establishing new operations, purchasing existing operations of another company, or providing additional capital to their existing U.S. operations.

The U.S. welcomes foreign investment, and the numbers show that investors have confidence in the opportunities here. With a population of 320 million and a Gross Domestic Product (GDP) that’s over $18 trillion, our nation is home to more FDI stock than any other country.

The numbers paint the big picture:

  • 12.1 million jobs are attributable to FDI.
  • 6.4 million reflects the number of U.S. workers who are directly employed by majority foreign-owned firms.
  • 2.4 million includes jobs attributable to the economic activity of majority foreign-owned firms, including jobs in those firms’ supply chains, jobs attributable to higher incomes, and other economic effects.
  • In the manufacturing sector alone, productivity growth from technology spillovers associated with FDI contributed 3.5 million jobs.

At the Commerce Department’s Economic Development Administratoin (EDA), FDI is one of our investment priorities. These priorities are designed to provide an overarching framework to guide the agency’s investment portfolio and ensure its investments contribute the strongest positive impact on sustainable regional economic growth and diversification.

Since FY2011, EDA invested more than $109 million in 91 projects to help advance local strategies to attract FDI. Of the total, 61 projects totaling close to $98 million are expected to create and/or retain 30,073 jobs and attract over $8 billion in private investment. The other 30 projects totaling close to $12 million support FDI-related planning, research, technical assistance, access to capital, and/or other activities that are essential for successful economic development and job creation in the future.

Examples that show how EDA is investing to support FDI include:

  • Mississippi: Mississippi State University’s Canton-based office received the Mississippi Economic Development Council’s Community Economic Development Award for its work to bring advanced manufacturing jobs back to America. The program acquired its initial funding through EDA. According to the University, the initiative resulted in a nearly $11 million economic impact, with more than 33 direct investment opportunities identified and 333 jobs created or saved. Additionally, the program saw 262 industry certifications and 221 paid internships in high-demand advanced manufacturing skills.
  • Georgia: Over the last three decades, the global automotive sector has established a noticeable presence in the Southeast United States. From Mercedes in Alabama, to BMW in South Carolina, many automotive manufacturers are seeking to take advantage of the Southeast’s comparatively inexpensive cost of doing business, warm climate, and excellent transportation networks. In 2015, EDA invested $700,000 in Public Works Program funds in the city of Lavonia, Georgia, to make sewer systems improvements that helped bring a foreign-based automotive parts manufacturer to the region. As a result, it is estimated that the region will gain 400 new manufacturing jobs and attract $54 million in foreign direct investment.

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New Report: Global FDI Flows Show Continued Confidence in U.S. Economy

March 3, 2016

Felicia Pullam is the Director of Outreach for SelectUSA.

Foreign direct investment (FDI) is tremendously important to the American economy. The U.S. affiliates of foreign companies are responsible for roughly 12 million jobs in the United States, and they spent $53 billion on U.S. research and development and exported $360 billion worth of U.S. goods in 2013 alone. New data from the United Nations Conference on Trade and Development (UNCTAD) on global FDI shows that the United States remains the leading destination for investment. The long-term outlook inherent in FDI decisions means that confidence in our economy continued to grow.

SelectUSA 2016 Investment Summit

            SelectUSA 2016 Investment Summit

UNCTAD recently published its Global Investment Trends Monitor Report on 2015 FDI flows, which analyzes FDI flows between countries and regions. The report reveals that flows into the United States increased to $384 billion, more than any other country and a record high.

Worldwide, FDI flows recovered “unexpectedly” strongly in 2015, increasing 36 percent to an estimated $1.7 trillion – the highest level since the recession. The report notes that this growth can be attributed to a surge in mergers and acquisitions (M&As), as well as corporate reconfigurations. Internationally, greenfield investment was relatively flat, with 0.9 percent growth.

FDI flows, however, are notoriously volatile. A handful of deals – or even just one large investment – can swing annual flows dramatically. For this reason, our team at SelectUSA relies primarily on “stock” or “position” data – the total cumulative amount of FDI – to understand FDI trends. Nonetheless, the overall patterns of FDI flow and long-term trends in these flows can be instructive.

For example, the report highlights the reversal of a trend in global investment flows in 2015. Between 2012 and 2014, developing countries received a larger share of FDI inflows than their developed counterparts. In 2015, FDI inflows to developed economies grew to their second highest level ever ($936 billion), or 55 percent of all FDI, driven by flows to the European Union and the United States. FDI inflows to developing economies increased just 5 percent last year to $741 billion.

Last year also marks the ninth time in ten years that the United States recorded more FDI inflow than any other country. Combined with the fact that the United States is home to the largest amount – by far – of FDI stock, it is clear that investors have been consistently confident in the quality of the investment environment and opportunities in the United States.

That’s not a surprise: we hear from companies all the time about why they chose to invest here, and international executives ranked the United States at the top of A.T. Kearney’s FDI Confidence Index for the third year running.  Business leaders know that success in the U.S. market can help drive global success. The United States is not only home to the largest and most attractive consumer market, it also thrives through a culture of innovation and a workforce that is among the world’s most productive. Companies of all sizes – from start-ups to multinationals – can find the ideas, resources, and market they need to be competitive.

SelectUSA will hold the 2016 Investment Summit on June 19-21 in Washington, D.C. to showcase investment opportunities from every corner of our country to investors from 70 countries. Participants can learn more about how, where, and why to invest in the United States from high-profile executives, senior officials, and economic developers. Visit SelectUSASummit.us to learn more and register today.

About SelectUSA: Housed within the U.S. Department of Commerce, SelectUSA promotes and facilitates business investment into the United States by coordinating related federal government agencies to serve as a single point of contact for investors. SelectUSA assists U.S. economic development organizations to compete globally for investment by providing information, a platform for international marketing, and high-level advocacy. SelectUSA also helps investors find the information they need to make decisions; connect to the right people at the local level; navigate the U.S. federal regulatory system; and find solutions to issues related to the U.S. federal government.

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