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Salt Lake City – Foreign-owned businesses are an important component of the U.S. economy, supporting millions of jobs across every economic sector throughout the country. A new Brookings report ranks foreign direct investment (FDI) in the top 100 metro areas in the United States, including Salt Lake, Provo and Ogden.
Salt Lake ranked at No. 46 on the list, with 23,870 workers employed by foreign-owned companies. The top five industries for foreign investment include mining, lodging, non-bank credit intermediation, investigation and security, and beverage products.
Provo ranked at No. 99 out of 100, with only 2,430 workers employed by foreign-owned businesses. The largest industries represented are electronics wholesalers and snack, coffee and condiment companies.
Ogden ranked at No. 96, with 4,120 workers employed by foreign-owned businesses. The major industries include pharmaceuticals, consumer goods wholesaler and business support services.
The Brookings report, FDI in U.S. Metro Areas, was released as part of the Global Cities Initiative, a joint project of Brookings and JPMorgan Chase. The report provides an analysis of the location of jobs in foreign-owned businesses, charting global trends in foreign direct investment, examining why FDI is important to a strong regional economy and identifying policies to maximize the potential of FDI into the United States.
“Foreign direct investment is a fresh injection of capital into our economy, supporting millions of well-paying jobs across the nation’s metros, strengthening our industry clusters and boosting our global competitiveness,” said report co-author Devashree Saha, Brookings senior policy analyst and associate fellow. “This report will help guide federal, state and local policymakers in designing policies that cultivate an environment that draws foreign direct investment naturally and maximizes the amount, quality and potential economic benefits of FDI in this country.”
In 2011, majority-owned U.S. affiliates of foreign companies employed 5.6 million American workers. On average, FDI supports 5.5 percent of the private workforce in a large metro area. In Salt Lake, FDI supports 4.6 percent of total private employment. In Provo that number is a mere 1.5 percent, while Ogden clocks in at 2.7 percent.
Bridgeport, Conn., has the highest share of workers employed by foreign-owned companies at 13.6 percent, with a large concentration in banking and finance. Greensboro, NC, and Worcester, Mass., tie for second position with 9 percent of workers employed by these businesses. Over the course of the economic recovery (2009-2011), more than 70 metro areas saw the number of workers at foreign-owned businesses rise. Atlanta, Houston, Los Angeles and New York each experienced an increase of over 10,000 workers.
Jobs in foreign-owned businesses are concentrated in manufacturing, where FDI supports 2.2 million workers, or nearly one-fifth of all manufacturing jobs in the country. FDI in technology- and skills-intensive advanced industries employs 1.4 million workers.
Altogether, 115 different countries invest directly in the United States, with Western European countries, Canada and Japan making up the 10 largest sources of FDI into the United States.
According to the Brookings report, the benefits of foreign direct investment extend well beyond the millions of jobs supported economy wide. For example, U.S. affiliates of foreign companies pay well above average wages. They strengthen U.S. trade, producing more than one-fifth of all U.S. goods exports and accounting for 28 percent of imports. They account for 19 percent of all corporate R&D expenditures in the United States. They have funneled 48 percent of total FDI dollars into manufacturing, shoring up the nation’s eroding production base. And finally, they build pipelines that boost the flow of knowledge, technology and ideas into the nation’s industrial centers, helping regions build global networks.