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. 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.Read More
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