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Expediting Foreign Direct Investment in the United States

The federal government has partnered with U.S. states, regions, and cities in welcoming business investment to America through SelectUSA.

Location USA 2012
The United States reaffirms our open investment policy, a commitment to treat all investors in a fair and equitable manner under the law, and I encourage all countries to pursue such a policy. My administration is committed to ensuring that the United States continues to be the most attractive place for businesses to locate, invest, grow, and create jobs. We encourage and support business investment from sources both at home and abroad. - Barack Obama, President of the United States, June 2011 Businesses worldwide invest in the United States to access the world's largest, most innovative economy. With globally recognized educational institutions, growing industry clusters, first-class research and development centers, and access to global markets, the United States offers an unmatched opportunity for success.

With the creation of SelectUSA* as a White House initiative to promote business investment, the national focus on the growth of domestic and foreign direct investment (FDI) in the United States is unprecedented. SelectUSA can help firms looking to enter, expand, or return their operations to the U.S. market.

A Stable, Predictable Investment Climate
Even with global economic volatility in recent years, FDI in the United States has remained steady. More than $220 billion in FDI flowed into the United States in 2010, a 30 percent increase from 2009. Overall, the $2.3 trillion stock of FDI in the United States is equivalent to nearly 16 percent of U.S. GDP. And the United States consistently ranks among the top countries in the world in numerous confidence measures. Given the sheer size and diversity of the U.S. economy, its ability to offer a stable, predictable investment climate to domestic and international businesses is unparalleled. While 2011 is poised to see an overall decline in cross-border direct investments, firms that have or are planning to invest in the U.S. market continue to enjoy a stable economic climate.

The Best Workers in the World
The United States has always welcomed FDI because it contributes substantially to the U.S. economy (see Figure 1). Subsidiaries of foreign-owned firms directly employed over 5.2 million American workers in 2009, paying $408 billion in annual salaries and wages. Multinational firms value U.S. education and training and invest in specialized functions that lead to U.S. job creation in highly specialized sectors. They want the best workers in the world and are willing to pay a premium for American talent: nearly 40 percent of U.S. jobs created through FDI are in manufacturing, and U.S. employees of foreign-owned firms earn 25 percent higher wages than the average U.S. private-sector worker.

A Growing Share of R&D
Investors choose to conduct their valuable, proprietary activities in America because those activities are not viable without skilled and creative workers, innovative industry clusters, strong protections for intellectual property, and a predictable governance framework. The Battelle Memorial Institute tells us that 34 percent of all global research and development in 2010 took place in the United States, with almost half of the developed world's researchers working in the United States. According to research by the National Science Foundation, the U.S. Census Bureau, and the U.S. Bureau of Economic Analysis, foreign firms have a growing share of research and development investment in the United States. These firms recognize the hospitable climate the United States provides for their product development, innovation, and commercialization efforts. The United States provides a world-class framework for safeguarding and growing such investments.

Export Platform Opportunities
FDI's impact on the U.S. economy transcends its borders. In addition to introducing new capital, creating new jobs, and strengthening U.S. competitiveness, U.S. affiliates of foreign-owned firms accounted for almost 19 percent of total U.S. exports in 2009. In recent years, the steady rise in the proportion of U.S. exports originating from these firms is evidence that multinational companies locate in America not only to service the U.S. market but also to maximize the opportunities presented by its export platform. According to the Office of the U.S. Trade Representative (USTR), the United States more than doubles its market access through strategic trade agreements that connect its businesses with nearly 695 million consumers worldwide. With the recent approval of free trade agreements with Columbia, Panama, and South Korea, global access afforded to a company with U.S. operations is unprecedented (see Figure 2).

National Support
U.S. states, regions, and cities have a strong legacy of pursuing and winning business investment projects. With SelectUSA, their efforts are supported at the national level now more than ever. Just a week after creating SelectUSA, President Obama released a statement on America's unequivocal policy of openness to investment. For economic development organizations and firms, SelectUSA is a federal resource to provide research and information; identify federal, state, regional, and industry partnerships; respond to investment impediments involving federal rules and regulations; and advocate for U.S. economic competitiveness through global business investment. SelectUSA represents the entire nation and exercises strict geographic neutrality.

Cross-border investment is a pivotal component of U.S. economic competitiveness. With SelectUSA, the federal government is a partner to U.S. states, regions, and cities in welcoming business investment to America.

* Established by Executive Order of the President in June 2011, SelectUSA is a government-wide initiative to encourage, facilitate, and accelerate business investment in the United States by both domestic and foreign firms. SelectUSA can assist firms and economic development organizations that are engaged in business investment in the U.S. market. To learn more, visit www.SelectUSA.gov.

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