The United States has long been the world’s number one destination for foreign direct investment.
A recent Brookings Institution report found that 5.6 million U.S. workers, or approximately 5% of the U.S. work force, are employed in the domestic operations of companies majority-owned by a foreign parent.
And the U.S. operations of foreign firms contribute much more than jobs to the economy.
According to Brookings, here are some more reasons why FDI matters:
- Manufacturing: Foreign-owned establishments concentrate 18% of U.S. manufacturing jobs.
- Trade: Majority foreign-owned firms account for 20% of all U.S. goods exports.
- Wages: Majority foreign-owned firms pay 22% higher average wages.
- Productivity: Spillovers from FDI are estimated to account for 12% of U.S. productivity growth.
- Advanced industries: The share of jobs in foreign-owned firms in industries focued on math, science and technology is four times the share in the broader economy.
- R&D: Majority foreign-owned firms account for 19% of all corporate research and development expenditures.
Brookings examined foreign direct investment (FDI) — when a foreign company invests in a U.S. business either by opening a new operation or through a merger or acquisition — in U.S. metro areas and found that companies from 445 city-regions spread across 115 countries have direct investments in the United States. The average large metro area contains direct investment from 33 different countries and 77 different city-regions worldwide, according to the report.
ThinkAdvisor looked at the top 10 global cities and regions that Brookings determined are sending FDI to the United States.
10. Southeast England; 132,000 U.S. jobs
Foreign direct investment from the Southeast England region —west and south of London and stretching from Oxford through Reading, Crawley and Gatwick — supports nearly 132,000 U.S. workers, according to Brookings. Southeast England is home to companies that include security services providers G4S and Wackenhut, defense firms Qinetiq and Serco, and hospitality group Compass Holdings.
9. Baden-Württemberg, Germany; 134,300 U.S. jobs
About 134,300 U.S. jobs come from foreign direct investment from this auto-industry concentrated German state. It is here, centered around Stuttgart, where you’ll find some of the largest U.S. employers, like Daimler, Robert Bosch, and Mahle. Software giant SAP and many small and midsize manufacturers also hail from this region.
8. Dublin, Ireland; 141,600 U.S. jobs
FDI from Dublin-based companies — like accounting giant Accenture, medical equipment supplier Covidien, building materials conglomerate CRH, and diversified industrial companies Ingersoll-Rand and Cooper Industries — employ approximately 141,600 U.S. workers.
7. Brussels, Belgium; 154,800 U.S. jobs
Home to multinational companies such as Delhaize Group in grocery stores, Anheuser-Busch InBev in beverages, Solvay in chemicals, and the parent of Safelite in automotive repair, Brussels provides nearly 154,800 U.S. workers with jobs.
6. Rhine-Ruhr, Germany; 165,400 U.S. jobs
FDI from Rhine-Ruhr gives an estimated 165,400 U.S. workers jobs, thanks to its traditional heavy manufacturing companies like ThyssenKrupp, the pharmaceuticals and life sciences giant Bayer, media empire Bertelsmann, and the No. 4 mobile telecom carrier in the United States, T-Mobile.
5. Amsterdam, Netherlands; 231,700 U.S. jobs
Amsterdam-based companies support approximately 231,700 U.S. jobs through FDI from employers including Ahold in grocery stores and Randstad in employment services, as well as insurance giant ING, consumer goods colossus Unilever and chemical company AkzoNobel.
4. Toronto, Canada; 256,500 jobs
FDI from Ontario-based companies — like The Royal Bank of Canada and TD Bank, Magna and Martinrea in the auto supply chain, Extendicare in nursing and care facilities, and Thomson Reuters in publishing — provide jobs to some 256,500 workers in the United States.
3. Paris, France; 429,500 jobs
FDI from the Paris/Ile-de-France region supports nearly 429,500 U.S. jobs, thanks to hospitality companies like Accor, food services companies like Sodexo, and infrastructure services companies like Veolia. Capgemini in consulting, Alcatel-Lucent in telecoms and BNP Paribas in banking also call Paris home.
2. London, England; 460,700 U.S. jobs
London-based companies have around 460,700 U.S. employees. London is host to a variety of companies with large U.S. operations, such as Shell and BP in the oil industry, HSBC and the Royal Bank of Scotland in finance, Intercontinental Hotels in hospitality, and BAE Systems and Invensys in precision instruments.
1. Greater Tokyo, Japan; 490,000 U.S. jobs
The Greater Tokyo region supports nearly 490,000 U.S. jobs through FDI — more than any other global metropolitan area. Industrial giants Hitachi and Mitsubishi, automakers Honda and Nissan, electronics companies Canon and Toshiba, and retailer 7-Eleven all call Greater Tokyo home.
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