SelectUSA and Foreign Direct Investment

Posted by: Global Chamber on Thursday, March 26, 2015

In Washington, DC this week, the SelectUSA Conference was filled with compelling arguments for companies all over the world to invest in the U.S. Thousands of foreign companies attended the event in Washington, DC, and they were met with plenty of reasons to do business here.

Secretary Kerry closed the program with a thoughtful and positive message... invest in the US! It works!

What may not be obvious to Americans - and anyone around the world regarding foreign direct investment in their country - is why this is such an important issue. A look at the numbers indicates why so much effort was made this week by American leaders at SelectUSA.

The Brookings Global Cities Initiative has reported on why foreign direct investment matters. When foreign firms invest in the U.S., they contribute inordinately and positively to the economy. When they invest in a U.S. business enterprise either by opening a new operation or through a merger or acquisition, overall those investments account for 5% of private sector employment. That's not insignificant, and most interesting, this is what FDI looks like in an average US community...

  • 5.0% of employment
  • 6.7% of compensation
  • 12.0% of productivity growth
  • 15.2% of capital investment
  • 18.9% of corporate R&D
  • 20.3% of export

Really! So we talk all the time about increasing exports, and one of the most important ways may be to simply attract foreign direct investment... which provides an inordinately positive bump with exports. Yes help local companies export, and attract foreign companies as well. It all works together in a very positive way.

So if you ever hear someone complain about foreign companies investing in your town, state or country, let them know that they owe the foreign owners of that company a big hug. When communities welcome foreign direct investment, they're welcoming jobs, investment, R&D and increased exports.

Join the global tribe!


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