Investing in the United States - OZY | A Modern Media Company


Foreign investment in the U.S. creates jobs, but other countries have started attracting more of the funding.

By Emily Cadei

We have a lot to thank the Brits for here in America. Fish and chips. Will and Kate. And, as Hugh Grant earnestly declared in the 2003 classic Love Actually, David Beckham’s right and left feet (his whole body, really, I would add).

Turns out one other thing the “special relationship” is bringing the United States: cash.

Among all the foreigners investing in the United States, it’s companies from the United Kingdom that have brought the most money to our shores:

$487 billion

According to the Organization for International Investment, that’s how much foreign direct investment — defined as overseas purchases of physical assets (businesses, property and the like) — the U.K.’s sent to the United States through 2012, nearly 20 percent of the total.

But another member of the British Commonwealth might be sneaking up on them. The same report finds that Canadian companies more than doubled their investment in the U.S. between 2010 and 2012 and now rank fourth among foreign countries investing in America. Other big investors include the Netherlands, France and Japan.


That investment in turn shapes the American job market. The Brookings Institution recently calculated that foreign-owned businesses operating in the United States employ an estimated 5.6 million Americans. Foreign-owned companies are particularly significant players in manufacturing and “advanced industries” like tech and pharmaceuticals.

More foreign businesses are being lured to the developing world.

The United States attracts the most foreign direct investment of any country in the world but its piece of the pie is shrinking. According to Brookings, “The share of global FDI destined for the United States has fallen from a high of 26 percent in 1999, when the United States led global growth with the Internet revolution, to just 12 percent in 2012.” The U.S. share of global economic output also declined during that period, although not so fast as that.

More and more foreign businesses are being lured to the developing world — China, Brazil, India, Turkey — with the promise of new markets and faster growth. For the first time ever, more than half of the globe’s new foreign direct investment went to the developing world in 2012 and again in 2013, Brookings reports. 

So it may be a worrisome sign for the United States that FDI from the U.K. took a big hit between 2011 and 2012, dropping by more than half.

Perhaps American businesses need to start brainstorming an appropriate catchphrase for our “special” financial relationship with the Canucks.

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