The United States is the world’s largest recipient of foreign direct investment. In 2006 alone, we received $175.4 billion in FDI. The total stock of FDI in the United States in 2006 was equivalent to 13.6 percent of our GDP.
The United States recognizes the beneficial impact FDI has on our economy. For instance, with 66,000 employees in the United States, Siemens (a German company) employs through its U.S. subsidiaries more people in the United States than Microsoft and Nike combined. In total, U.S. affiliates of foreign companies (majority-owned) employ more than 5 million U.S. workers, or 4.4 percent of private industry employment. Between 2003 and 2007, over 3,300 new projects were announced or opened by foreign companies, yielding $184 billion in investment and about 447,000 new jobs.
Furthermore, U.S. affiliates of foreign companies tend to pay higher wages than other U.S. companies. Internationally-owned companies support an annual U.S. payroll of $335.9 billion, with average annual compensation per employee of over $66,000. On average, U.S. subsidiaries of foreign firms pay 36 percent higher wages and salaries than that of all U.S. establishments.
U.S. affiliates of foreign firms purchase over 75 percent of their inputs from U.S. businesses (approximately $1.5 trillion in 2005), spurring new job creation and economic growth. In addition, a large proportion of the U.S. current account deficit is financed by foreign investment. In contrast with portfolio investments, foreign direct investment is highly stable and directly stimulates international trade and capital investment.
The United States welcomes FDI and has maintained a longstanding open investment policy not only to encourage investment at home, but also to support the ability of U.S. firms to invest abroad. At over $216 billion invested internationally in 2006, the U.S. is the largest investor in the world. The United States recognizes that if we close ourselves to investment, other markets will have a strong incentive to reciprocate – irreparably harming both the U.S. and global economy.
Advanced and developing economies understand the value of foreign investment, resulting in an increasingly competitive international environment for FDI. For example, every member of the Organization for Economic Cooperation and Development (OECD) now maintains an investment promotion agency to attract foreign investment. In the global race for FDI, the United States recognizes that we must continually improve our competitive advantage to attract international investment.
To move that effort forward, Invest in America was launched in March 2007 as the primary U.S. Government mechanism to coordinate inward investment promotion. Our efforts are focused on outreach to foreign governments and investors, support for state governments’ investment promotion efforts, and addressing business climate concerns by serving as ombudsman in Washington for the international investment community.
Potential and current investors are invited to contact Invest in America by visiting www.investamerica.gov, calling +1 202-482-1889, or emailing me at aaron.brickman@mail.doc.gov.