Jobs Supported by 'Insourcing' Expected to Grow
FOR IMMEDIATE RELEASE
March 12, 2004 |
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WASHINGTON, D.C. According to figures released today by the U.S. Department of Commerce, new foreign direct investment (FDI) in the U.S. totaled $82 billion in 2003, over twice the amount from the previous year. Increased foreign investment means more factories, more research & development and more jobs being “insourced” to the United States by companies based abroad.
U.S. subsidiaries of foreign companies (i.e., Siemens, Novartis, Honda) employ 6.4 million Americans. Based on historical relationships, this $82 billion increase in FDI could boost jobs supported by U.S. subsidiaries by 400,000. U.S. subsidiaries’ investment is concentrated in high-skill sectors such as technology, pharmaceutical, financial, and automotive. As such, jobs at these companies pay compensation, on average, 16.5% higher than all U.S. companies.
“With many Americans questioning the global economy, we need to look at all the facts. Increased investment by companies based abroad will lead to more ‘insourced’ jobs,” said Todd M. Malan, Executive Director of the Organization for International Investment, a Washington, D.C.-based business group. “These impressive figures show that an open trading system provides tangible employment benefits and underscores the confidence these companies have in the U.S. economy, Americans’ ability to innovate and the quality of U.S. workers,” Malan stated.
Today’s numbers also show that U.S. subsidiaries are reinvesting the profits they earn in this country back into their U.S. businesses, expanding and updating their American operations. In 2003, U.S. subsidiaries reinvested $38.6 billion – up from $6.8 billion in the previous year. “U.S. subsidiaries realize that long-term success in America comes from constantly adding to their investments, " added Malan.
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The Organization for International Investment is a Washington-based business association representing U.S. subsidiaries of international companies headquartered abroad. For additional information, see OFII’s web site at www.ofii.org.
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