Today the Commerce Department and ESA released a short report on “Foreign Direct Investment in the United States [1].” Foreign company investment in U.S. businesses, known as foreign direct investment (FDI), has supported more than 5 million jobs over the past decade, jobs that pay, on average, up to 30% more than the average of all U.S. firms (Figure 1).
Other notable results in the report are that FDI has supported about 2 million manufacturing jobs, which have been less affected by the sector-wide losses in employment than domestic manufacturing jobs. The number of FDI-supported manufacturing jobs declined 11 percent between 1998 and 2008, while employment in the manufacturing sector as a whole fell 24 percent. U.S. FDI totaled $194 billion in 2010, and $1.7 trillion over the last ten years, though it is also noticeable how FDI surges and ebbs along with the U.S. business cycle. (See Figure 2)
Finally, relatively few countries invest directly in the United States. In 2010, 84% of FDI came from or through only eight countries, led by Switzerland and the United Kingdom. Encouraging more FDI and expanding the number of countries that invest in the United States would potentially lead to more economic growth and create even more new, high-paying U.S. jobs.
~Mark Doms, Chief Economist, US Department of Commerce
June 14th, 2011
