SelectUSA.gov

Business Investment in the United States

INEAP Meeting By Tazeem Pasha Manager, Global Business Attraction SelectUSA | U.S. Department of Commerce Wednesday, July 25, 2012

© International Trade Administration 2012

About SelectUSA

SelectUSA.gov

1. The Administration’s policy on business investment

2. The establishment and functions of the SelectUSA initiative

3. The establishment of the Federal Interagency Investment Working Group

2

SelectUSA was created by the Executive Order of the President of the United States in June 2011. The Executive Order outlines:

© International Trade Administration 2012

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0

1

2

3

4

5

6

2000 2001 2002 2003 2004 2005 2006 2007 2008

US$

Tri

llion

s

Deposits/Lending

Debt

Equity

FDI

Source: McKinsey

FDI vs. Other Capital Flows 2000-2008

© International Trade Administration 2012

Value of FDI to the U.S. Economy

5.3 million

$410 billion

33%

$43 billion

$154 billion

$220 billion

21%

Workers Employed by U.S. Affiliates of Foreign Firms in the U.S. in 2009 Amount of Wages Paid to Employees of U.S. Affiliates of Foreign Firms in 2009 Compensation by U.S. affiliates of foreign firms was 33% higher than the economy-wide average wage in 2009 Amount U.S. Affiliates of Foreign Firms spent on R&D in the U.S. in 2008 Amount U.S. Affiliates of Foreign Firms Spent on Capital Investments in 2009

Size of FDI Flows into the U.S. in 2011 (preliminary)

Percent of all U.S. exports come from U.S. subsidiaries of foreign firms in 2009

Source: Bureau of Economic Analysis © International Trade Administration 2012 4

FDI and the U.S. Economy

Source: Bureau of Economic Analysis

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Employment GDP Capital Investment Imports of Goods Exports of Goods Research and Development

U.S. Subsidiaries of Global Companies Shares of Total U.S. Private-Sector Activity (2009)

2008 R&D figures are shown (latest available)

© International Trade Administration 2012

Global Inbound FDI Stock (1980 - 2010)

Global FDI Trends A

mou

nt in

$ M

illio

ns

© International Trade Administration 2012 Figures available on market value basis Source: UN Conference on Trade and Development SelectUSA.gov

Total Global Inward FDI Stock: $19 Trillion

Share of Global FDI Flows Captured by the United States

Source: UN Conference on Trade and Development (UNCTAD)

U.S. FDI Trends

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

© International Trade Administration 2012

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

The United States Sends Out More FDI Than It Attracts Based on Stock FDI Positions

Outbound Stock Inbound Stock

U.S. FDI Trends

Figures in USD Millions Source: Bureau of Economic Analysis

© International Trade Administration 2012

5% | $118b

10% | $238.2b

2%|$52.8b

21% | $497.5b 11% | $257.2b 9% | $209b

11% | $263.2b

2% | $52.2b

3% | $61.6b 3% | $61.5b

U.S. FDI Trends Top 10 FDI Stock Positions, 2010

Rank 2010 FDI Position in the United States

Billion USD

1 United Kingdom 497.5

2 Japan 263.2 3 Germany 257.2

4 Canada 238.1 5 France 209.6

6 Netherlands 118 7 Ireland 61.7 8 Switzerland 61.6 9 Australia 52.9

10 Belgium 52.2

Source: Department of Commerce, Bureau of Economic Analysis – FDI by Ultimate Beneficiary Owner

© International Trade Administration 2012

Note: Numbers denote 5 year compound annual growth rate (2005-2010) of the stock FDI position and the total stock of FDI in the United States Source: Department of Commerce, Bureau of Economic Analysis – FDI by Ultimate Beneficiary Owner

U.S. FDI Trends Top 10 FDI Growth Markets, 2010

35% | $33.9b

36% | $44.2b

26% | $15.4b

33% | $52.2b 38% | $61.6b

37% | $3.3b

53% | $5.8b

44% | $21.2b

37% | $13.3b

34% | $7.1b Fastest Growing Sources of FDI in the United

States, by Compound Annual Growth Rate (2005-2010)

Rank Country Growth Rate

Billion USD

1 China 53% 5.8 2 Singapore 44% 21.3 3 Ireland 38% 61.7 4 New Zealand 37.8% 3.3 5 U.A.E. 37% 2.6 6 Spain 36.9% 44.2 7 Mexico 35% 5.5 8 India 34% 2.3 9 Belgium 33% 2.4

10 Brazil 26% 3.8

© International Trade Administration 2012

U.S. FDI Trends Top Export Markets, 2010

Figures in USD Billions Source: Bureau of Economic Analysis

Canada: $249.1

Australia: $21.8

UK: $48.4 Germany: $48.2 Netherlands: $34.9 France: $26.9 Belgium: $25.5

Mexico: $163.3

Brazil: $35.4

China: $91.9

Japan: $60.5

S. Korea: $38.8

Singapore: $29.0

Hong Kong: $26.5 India: $19.2

Top U.S. Export Markets are also among the top sources of FDI

© International Trade Administration 2012

Manufacturing

34%

Wholesale trade 14%

Retail trade 2%

Information 6%

Depository Institutions 5%

Finance and Insurance 13%

Real Estate 2%

Professional &Technical services 2%

Other 22%

Food 3%

Chemicals 26%

Primary fabricated metals 6%

Machinery 12%

Computers, electronics 7%

Electrical equipment 3%

Transportation equipment 12%

Other manufacturing 31%

Industry breakdown of total U.S. FDI stock ($2.3 trillion)

Source: Bureau of Economic Analysis

U.S. FDI Trends

© International Trade Administration 2012

Top 10 FDI Growth Sectors in the United States (Compound annual growth rate in FDI position between 2005 and 2010 and dollars in

2010 on a historical cost basis)

Primary and Fabricated Metals

Computers and Electronic Products

Electrical equipment, appliances, and components

Machinery

Finance and Insurance

Other Manufacturing

Professional, Scientific, and Technical Services

Information

Other Industries

Chemicals

13.54%

$56.76 billion

$19.296 billion

$79.388 billion

$356.781 billion

$231.264 billion

$79.258 billion

$156.518 billion

$470.767 billion

$175.394 billion

12.64%

11.7%

11.32%

10.7%

10.49%

9%

8.82%

7.26%

7.22%

$51.266 billion

Source: Bureau of Economic Analysis

Total Stock in 2010

© International Trade Administration 2012

U.S. FDI Trends

About SelectUSA

• SelectUSA is housed in the U.S. and Foreign Commercial Service

• Primary U.S. Government Effort to Support Business Investment in the United States

• Geographically neutral in the United States

• Two key constituents: Firms and Economic Development Organizations

• What We Do: 1. Act as Information Clearinghouse 2. Act as Ombudsman 3. Act as Advocate 4. Connect Investors with U.S. States 5. Provide Policy Guidance 6. Educate Investors 7. Provide Guidance to U.S. Economic Development Organizations

© International Trade Administration 2012 SelectUSA.gov

SelectUSA FY13 Focus Markets

© International Trade Administration 2012

Nearly 90 percent of FDI in the United States (2010 FDI Stock)

Australia $52.9 Billion Germany * $257.2 Billion Mexico* $34 Billion Spain * $44.2 Billion

Belgium $52.2 Billion India * $7.1 Billion Netherlands $118 Billion Sweden $36 Billion

Brazil* $15.5 Billion Ireland $61.6 Billion Russia * $8.8 Billion Switzerland $61.6 Billion

Canada * $238.1 Billion Israel $19.5 Billion Saudi Arabia $9.8 Billion Taiwan $6 Billion

China and $5.8 Billion Hong Kong* $11.6 Billion

Italy $23 Billion Singapore $21.3 Billion UAE $13.3 Billion

Finland $10 Billion Japan $263.2 Billion South Korea * $16.6 Billion UK $497.5 Billion

France* $209.7 Billion (*) denotes FY12 pilot market Source: U.S. Bureau of Economic Analysis

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Tazeem Pasha Manager, Global Business Attraction SelectUSA U.S. Department of Commerce Tel: 202-482-0648 Email: tazeem.pasha@trade.gov

SelectUSA.gov

Thank You

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© International Trade Administration 2012