Posted at 12:55 PM
A new report from the U.S. Commerce Department and the President's Council of Economic Advisors spotlights the array of factors that have made the U.S. the destination of choice for foreign direct investment (FDI). The joint report, released at the inaugural SelectUSA 2013 Investment Summit, also documents the positive impact FDI is having on the U.S. economy, including job creation, higher research and development spending and export growth.
The U.S. is the largest recipient of FDI in the world, with stock of more than $2.6 trillion dollars–including $166 billion that flowed into the country in 2012. Moreover, companies around the world now consider the U.S. to be the nation with the top FDI prospects globally.
The United States has been the world’s largest recipient of foreign direct investment (FDI) since 2006. Every day, foreign companies establish new operations in the United States or provide additional capital to established businesses. With the world’s largest consumer market, skilled and productive workers, a highly innovative environment, appropriate legal protections, a predictable regulatory environment, and a growing energy sector, the United States offers an attractive investment climate for firms across the globe.
Foreign direct investment benefits the U.S. Economy
In 2011, value-added by majority-owned U.S. affiliates of foreign companies accounted for 4.7 percent of total U.S. private output.
These firms employed 5.6 million people in the United States, or 4.1 percent of private-sector employment. About one-third of jobs at U.S. affiliates are in the manufacturing sector.
These affiliates account for 9.6 percent of U.S. private investment and 15.9 percent of U.S. private research and development spending.
In the 2008-09 recession and subsequent recovery, employment at U.S. affiliates was more stable than overall private-sector employment. As a result, U.S. affiliates’ share of total U.S. manufacturing employment rose from 14.8 percent in 2007 to 17.8 percent in 2011.
- Compensation at U.S. affiliates has been consistently higher than the U.S. average over time, and the differential holds for both manufacturing and non-manufacturing jobs.