Massachusetts State Press

The Boston Herald

FOREIGN FIRMS MAKIN' IT HERE;
`Insourcing' totals 32,100 jobs

By JAY FITZGERALD
December 15, 2005

Massachusetts has ``insourced'' more than 32,100 jobs over the past five years via foreign companies setting up units here.

The trend makes the Bay State one of the top destination points for international firms doing business in the United States.

The state ranks sixth in the nation for the percentage of its overall jobs tied to foreign firms with subsidiaries or offices in the United States, according to a new report by the Organization for International Investment, which represents foreign firms with U.S. operations.

About 6.5 percent of the state's work force, or 189,000 workers, are employed by foreign-owned firms. That's a 20 percent increase from five years ago, the report said.

The national average is about 5 percent of the work force employed by foreign companies.

The organization acknowledged some of the ``insourced'' jobs are the result of mergers and acquisitions, such as Toronto-based Manulife's takeover last year of Boston's John Hancock Financial.

But other companies, such as Switzerland-based Novartis, have established entire units in Massachusetts.

The Boston area's main attractions: proximity to Europe and the large number of health-care facilities and universities.

``The high quality of the work force is a big plus,'' said Todd Malan, president of the Organization for International Investment.

Other foreign firms with a major presence in Massachusetts include Reed Elsevier, Saint-Gobain Corp., Puma, Sodexho and Thomson Corp.

Some foreign companies have established offices here - and later made the area their home.

Impress Software was originally a unit of a German company when it opened a sales office in Waltham five years ago. After receiving venture capital from local firms, its headquarters was officially established in Massachusetts - along with 15 sales and executive jobs.

Stephen Clark, vice president of marketing at Impress Software, said the firm needed to establish a presence in the United States and later determined it could take advantage of experienced software executives.

John Bitner, chief economist at Boston's Eastern Bank, said he's not surprised by the study's findings, considering the increase in globalization and the state's strong medical and university centers.