Foreign Direct Investment in the United States – No Better Time, No Better Place

The United States welcomes foreign direct investment (FDI) as a win-win proposition that benefits both international business investors and U.S locations. As they become part of a symbiotic innovation and production ecosystem, these investors – and their companies –  both benefit from and contribute to economic growth and prosperity in communities across the nation. SelectUSA, the U.S. national investment promotion program, explains why.

The fundamentals that make the United States a great place to invest – markets, a climate of innovation, rule of law, and a motivated, skilled workforce – are stronger than ever.

Market Fundamental 1:  Top Destination for Business Investment

The World Bank consistently ranks the United States among the best markets in the world to start, operate, and expand a business – and in an increasingly competitive global marketplace, the United States continues to be the world’s leading destination for foreign direct investment. Indeed, at more than $3.7 trillion, total FDI stock in the United States equals 17 percent of gross domestic product (GDP) – a larger share by far than that of any other country.

Market Fundamental 2:  Growing Investor Confidence

In 2017, for the fifth year in a row, the United States has topped the A.T. Kearney Foreign Direct Investment Confidence Index. The Index is an annual survey of global business executives that ranks markets most likely to attract the most investment in the next three years.  Moreover, nearly half of business investors were even more optimistic about the United States than they were last year.Market Fundamental 3:  European Companies are Voting with their Dollars (and Pounds, Euros, and Francs)

The latest available data (2015) from the U.S. Bureau of Economic Analysis (BEA) reveal that at $1.92 trillion, European foreign direct investment (FDI) accounts for more than half (61.2 percent) of total foreign investment into the United States. Indeed, eight of the top ten largest sources of FDI in the United States are European countries. This and much more FDI data is available on SelectUSA Stats, a free online data visualization tool.

There are many reasons why investors from Europe and around the world choose the United States as the place to launch, grow, and succeed in their business endeavors. Here are just a few:

The United States is the single largest market in the world – with an annual GDP of more than $18 trillion, a diverse population of 325 million, and the highest household spending on the planet. Companies tapping into this substantial market find that locating manufacturing and distribution facilities closer to their customers enables greater quality control, improved responsiveness to customer demands, and reduced lead times. Perhaps this is why U.S. affiliates of foreign companies exported US$425 billion worth of goods in 2014 – more than one-quarter of all U.S. goods exports. Moreover, the “Made in the U.S.A.” brand is internationally renowned for innovation, quality, and reliability, giving U.S.-made goods a competitive edge in global markets – and it is more timely than ever that President Trump declared July 17 – 21 “Made in America Week.”

 

The United States is a leading destination for innovators, offering seven of the top 10 universities, 27 percent of global research and development (R&D) spending, and the most robust intellectual property protections in the world. The innovation culture in the United States – with deep roots in collaboration and knowledge-sharing, respect for diversity, adaptability, and flat organizational structures – catalyzes opportunities. By encouraging entrepreneurship, risk-taking, and even the risk of failure, this culture offers an added competitive edge to the business community.

 

The U.S. workforce is diverse, skilled, innovative, and mobile – and its workers are among the most productive in the world. In fact, U.S. workforce output per hour is 36 percent above the OECD member country average. The federal and state governments offer a wide array of resources – from training programs to tax incentives – to support employers in their quest to find, train, and retain the best talent.

 

Businesses operating in the United States are powered by abundant resources, including independent, stable, low-cost energy sources, raw materials, and the most developed, liquid, flexible, and efficient financial markets in the world. All companies – from growing tech startups to established multinationals – can find the resources and capital needed to take their firms to the next level.

And the future looks even brighter. As a stable democracy with a transparent and predictable legal system, the United States treats foreign and domestic firms equally under the law. At the local level, economic development organizations from every corner of the country promote and facilitate business growth and investment. And at the federal level, steps are being taken to create an environment in which companies can flourish – including reducing burdensome regulations, simplifying the tax structure, and investing in infrastructure initiatives.

 

What’s Next?

For companies ready to take the next step, SelectUSA is here to help.  Housed within the U.S. Department of Commerce’s International Trade Administration, SelectUSA promotes and facilitates business investment into the United States. SelectUSA offers a range of services to help investors find the information they need to make decisions; connect to the right people at the local level; navigate the federal regulatory system; and find solutions to regulatory issues related to the federal government.

The annual SelectUSA Investment Summit convenes companies from all over the world, economic development organizations from every corner of the nation, and other parties working to facilitate business investment in the United States.  The next SelectUSA Investment Summit is scheduled to take place on June 20-22, 2018 in the Washington, D.C. area.

For more information, visit www.selectusa.gov.   

 

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