Recently, Salt Lake City’s Department of Economic Development (SLC DED) sent Deputy Director Ben Kolendar to the 2017 SeletcUSA Investment Summit. For those of you who have no idea what that is:
“The SelectUSA Investment Summit is the highest-profile event dedicated to promoting foreign direct investment (FDI) in the United States. This signature event provides an unparalleled opportunity to bring together companies from all over the world, economic development organizations from every corner of the nation, and other parties working to facilitate business investment in the United States.” (More info here.)
We are eagerly watching to see what comes from the great leads and networking “Team Utah” was able to do at the summit.
This leads to three questions. First, what is FDI? Second, why is FDI important? Third, can I convince you before your eyes glaze over and you find yourself stifling a yawn?
FDI is simply when businesses based outside of the United States set up shop and do business within the United States and for our purposes Utah and Salt Lake City. It is very important to the strength of our economy and in a rapidly changing global economy will likely only become more so.
There are three primary reasons that FDI is important to us and the economy. The first is that FDI creates jobs and push wages higher. In 2014, majority owned foreign companies employed 6.4 million people in the U.S. Even better, these jobs tend to be high paying – about 33 percent more than average jobs in the U.S.
The second is that FDI contributes to innovation. In 2014 foreign affiliates contributed $57 billion to research and development in the U.S. Last, and certainly not least, FDI pushes exports, infusing more money into our local economy. For example, in 2014, a little over one quarter of U.S. exports were from U.S. affiliates of foreign companies.
The big picture for FDI is that it contributes to the local economy through exports, creates high paying jobs, and helps fund and drive innovation. It is an important and substantial segment of our economy with countries such as Japan, U.K., France, Germany, Switzerland, Netherlands and more with companies like Rio Tinto, Volkswagen, Tyco, Air Liquide, BOSCH, Bridgestone, Ericcson, Hyundai, Panasonic and many, many more creating jobs in and bringing money to Utah.
*Blog post contributed by William Wright
Thank you for bringing attention to FDI and how foreign trade impacts Utah’s economy. Utah plays an important role in the U.S. Canada trading relationship – which happens to be the largest in the world. Over 79,000 Utah jobs and $3 billion in total trade are a consequence of this great partnership. Foreign trade with our neighbor to the north is, and always will be, a critical factor in Utah’s economic prosperity.