The United States is an increasingly attractive location for business investment from global companies. In AT Kearney’s 2013 FDI Confidence Index, the United States surged past countries like China, Brazil and India to become the country with the top FDI prospects globally, as ranked by 302 companies representing 28 countries and multiple industry sectors.[i] This marks the first time that the US occupied the #1 spot in the survey since 2001.[ii] In a survey of U.S. manufacturers with production abroad late last year, BCG found that the majority (54 percent) are looking at re-shoring to the United States, up from 37 percent in 2012. [iii]
More and more companies are choosing to locate here after weighing the United States’ competitive advantages, including our:
- Skills and productivity: The U.S. workforce is among the most skilled and productive globally – more than 30 percent more productive than Germany’s and nearly twice as productive as South Korea’s.[iv]
- Innovation: The United States is the global leader in patents, producing nearly 30 percent of all patents worldwide, and has 15 of the top 25 leading research universities.[v] Not surprisingly, the United States also has over a third of the world’s total R&D investment, more than any other country.[vi]
- Energy: With a century of reserves, natural gas costs one third as much here as it does in Asia and our low energy costs overall are estimated to save U.S. manufacturers nearly $130 billion annually compared to Europe.[vii]
- Access to markets: Locating in the United States provides unparalleled access to the largest consumer market in the world and rapid access to global markets, with the United States having free trade agreements with 20 other countries and the most rapid export clearances of the 185 countries surveyed by the World Bank.[viii]
As the United States becomes increasingly competitive for investment, more global companies, including companies that are foreign-owned, are investing in and creating jobs in America. Business fixed investment from companies choosing to grow and invest in the United States accounts for more than 20 percent of the rebound in real GDP since mid-2009.[ix]
While the precise amount of re-shoring from U.S. companies is difficult to track, all signs are that it is growing. And more measureable data on investments and jobs created by foreign companies in the United States provides a powerful proxy for the overall trend of re-shoring and growing U.S. competitiveness for business investment.
Since 2006, the United States has been the world’s largest recipient of foreign direct investment (FDI).[x] In 2013, net FDI in the United States, as measured by U.S. assets of foreign affiliates, reached an all-time high totaling $4.6 trillion.[xi] And FDI inflows have swelled, totaling $1.5 trillion between 2006 and 2012. For 2013 alone, FDI inflows totaled $193 billion up from $166 billion in 2012.[xii] In addition, since 2010, the United States has experienced a step change in its share of total FDI inflows to developed countries, as measured by inflows to the G7, receiving nearly 50 percent of total FDI inflows to these countries annually, a two-thirds larger share than its typical share in prior years.[xiii]
This investment strengthens our economy: it directly supports well-paying jobs for millions of U.S. workers, paves the way for future business expansion and hiring, expands our exports, transfers innovations and knowledge from around the globe, and funds an outsized share of the nation’s research and development. In 2011, global investment, as measured for majority-owned U.S. affiliates of foreign companies, represented only 4.7 percent of total U.S. private output, but contributed 15.9 percent of U.S. private research and development spending; more than triple its respective share.[xiv]
Global investment creates high-paying U.S. jobs. Because global investment is concentrated in the knowledge-intensive, high-skill industries where the United States leads globally, compensation at U.S. affiliates of foreign companies is 33 percent higher than the U.S. average, and is consistently higher than the national average for both manufacturing and non-manufacturing jobs alike.[xv]
Global investment accounts for a significant share of jobs and job growth in competitive U.S. industries – like manufacturing, where global investment contributes 18 percent of employment and created 120,000 manufacturing jobs between 2009 and 2011.[xvi] And this trend is accelerating as the United States becomes more competitive - one third of all manufacturing jobs created in 2011, the most recent year for which we have data, were created by foreign companies choosing to locate production in the United States.[xvii]
In 2011, the Administration launched SelectUSA, the first-ever U.S. government-wide program to bring jobs and investment from around the world to the United States:
SelectUSA, operated by the Department of Commerce, makes investment attraction a core priority of the Administration, serving as a single point of contact for ready investors, coordinating investment advocacy all the way up to the President and providing services and support for U.S. regions and communities to compete globally for investment.
In just over two years, SelectUSA facilitated over $18 billion in new investment for the United States
SelectUSA will provide services to nearly 1,000 potential investors and economic development organizations this year alone, advising them on the advantages of investing in the United States and helping them navigate the process.
Looking ahead, we need to continue to nurture and build upon the underlying strengths of the U.S. economy, and harness programs such as SelectUSA so that even more companies will choose to invest and grow in the United States.
 Data on the U.S. output, assets, and employment of majority-owned U.S. affiliates of foreign companies, used throughout this report is also referred to here as global investment.
[i] AT Kearney, Foreign Direct Investment Confidence Index, 2013. http://www.atkearney.com/documents/10192/1464437/Back+to+Business+-+Opti...
[iii] Boston Consulting Group. Majority of Large Manufacturers Are Now Planning or Considering ‘Reshoring’ from China to the U.S. http://www.bcg.com/media/pressreleasedetails.aspx?id=tcm:12-144944.
[iv] The Conference Board Total Economy Database™, January 2014, http://www.conference-board.org/data/economydatabase/
[v] World Intellectual Property Organization. Press Release March 2014. http://www.wipo.int/pressroom/en/articles/2014/article_0002.html.; Times Higher Education World Reputation Rankings 2014. http://www.theguardian.com/news/datablog/2014/mar/06/worlds-top-100-univ....
[vi] Batelle. Global R&D Funding Forecast 2013. www.battelle.org
[vii] McKinsey Global Institute. Game Changers: Five opportunities for U.S. Growth and Renewal. July 2013.; World Energy Outlook 2013 Factsheet. http://www.iea.org/media/files/WEO2013_factsheets.pdf.
[viii] World Bank. Doing Business Project. Time to Export. http://data.worldbank.org/indicator/IC.EXP.DURS
[ix] Department of Commerce Bureau of Economic Analysis. National Income and Product Accounts. Also see http://selectusa.commerce.gov/sites/selectusa.commerce.gov/files/documen...
[x] Department of Commerce Bureau of Economic Analysis.
[xi] United Nations.
[xii] Department of Commerce Bureau of Economic Analysis. Direct Investment and MNCs. http://www.bea.gov/international/index.htm#omc. Under an alternative measure, FDI grew from $160.6 billion in 2012 to $187.5 billion in 2013.
[xiii] OECD. Investment Statistics Long FDI Series. www.oecd.org/investment/statistics. April 2014.
[xiv] Bureau of Economic Analysis. Direct Investment and MNCs. http://www.bea.gov/international/index.htm#omc
[xv] Bureau of Economic Analysis. Direct Investment and MNCs. http://www.bea.gov/international/index.htm#omc
[xvi] Department of Labor, Bureau of Labor Statistics. Department of Commerce, Bureau of Economic Analysis.
[xvii] Department of Labor, Bureau of Labor Statistics. Department of Commerce, Bureau of Economic Analysis.