Gov. Jay Inslee is at an event sponsored by the Organization for International Investment at the Bothell medical device facility of Netherlands giant Philips. The topic: Attracting more foreign direct investment to the state.
According to the trade group, some 800 subsidiaries of foreign companies operate in Washington and account for 92,300 workers. This “insourcing” increased by 14 percent from 2002 to 2011. Germany, the UK and Canada are the biggest foreign investors. With 31,100 jobs, manufacturing is the largest sector.
Still, this represents only 4 percent of the state’s private-sector workforce, so there’s plenty of room to grow.
For example, foreign direct investment (FDI) is responsible for 7.5 percent of South Carolina’s private-sector jobs thanks to the state’s “Autobahn,” the BMW assembly near Spartanburg and the suppliers along Interstate 85. The national average is 5 percent. In the Northwest: Alaska, 5.7 percent, Idaho, 2.7 percent and Oregon, 3.4 percent.
Nancy McLernon, president and CEO of the organization, told me that foreign investment is often a “blind spot” in state and local economic development. Over the decade from 2002 through 2011, the United States’ share of cross-border investment fell from 37 percent to 17 percent.
“When you look at what foreign based companies bring, it’s really significant,” she said. “Across every key economic indicator, foreign companies raise the average across the board.” They are also important exporters.
The group, which is supported by 160 U.S. subsidiaries of foreign companies, and PricewaterhouseCoopers have this report on the issue. Based on interviews with executives, here are three things states can do to attract more foreign investment: Connect a business with new local customers, invest in education and public-private partnerships with universities, and “ensure a corporate tax policy that aligns with international norms.”
Today’s Econ Haiku:
Stocks fall, blame Yellen
Less sexism than gamblers
Leaning too far in