According to a new report by the Organization for International Investment, insourcing bolsters U.S. manufacturing. Foreign-owned manufacturers with more than 1,600 affiliates in the United States in employ millions of Americans in high-paying jobs.
“We’ve seen a significant increase in foreign direct investment in the manufacturing, chemical and pharmaceutical industries during the last year,” said Brian Gallagher, spokesman for O’Neal, Inc. an integrated design and construction firm. “This investment by foreign-owned companies has a multiplier effect in that suppliers typically follow with additional capital investments in manufacturing facilities.”
Often, supplier companies locate nearby to furnish manufacturers with materials, component parts, and various support services, foreign investment in manufacturing provides significant employment spillovers. Economists estimate for each manufacturing job two to five additional jobs are created elsewhere in the economy.
The chemicals sector accounted for over $280 billion in cumulative foreign direct investment by the end of 2013. Transportation equipment and petroleum and coal products each had more than $100 billion in foreign investment through 2013, followed by the machinery sector at $87 billion. Over the years, international investors have brought know-how, technology, and innovation with them, boosting the overall competitiveness of U.S. manufacturing. Read report.
