Jun 21, 2016 - 9:00am

Japan Investing in America’s Greatness, Becoming an Export Leader

Former Vice President, Asia and acting head of Asia of the U.S. Chamber of Commerce


Mount Fuji stands behind buildings in Tokyo, Japan. Photo credit: Tomohiro Ohsumi/Bloomberg

Each time a foreign company or individual invests in the United States, it is a statement of confidence in America’s growth and potential.  Moreover, it is another tangible reminder that America is already great.

The simple fact is that America remains a highly attractive, desirable market for international investors. The United States has one of the most open markets and predictable investment climates in the world. It possesses an unrivaled consumer market, a world-class education system, a skilled and productive workforce, a transparent regulatory system, and enormous energy potential. It fosters an entrepreneurial culture of innovation and risk-taking.

Just as increasing foreign direct investment (FDI) in the United States reflects America’s greatness, so too is this investment increasingly contributing to America’s greatness – to the tune of $2.8 trillion in FDI that has been made in the United States to date.

With this investment come jobs – lots of them.  More than 6.1 million U.S. workers are employed by U.S. affiliates of foreign-owned firms. Another 5.9 million more American jobs can be attributed to the additional economic benefits from foreign investment – in terms of additional jobs tied to sourcing, increased incomes, productivity gains, and other similar positive impacts.

That’s 10 million American jobs tied to FDI.

Where does all this investment come from? The United Kingdom still leads the pack, accounting for nearly 20 percent of all FDI in the United States as of the end of 2013.

Japanese investment, which is a strong second (nearly 12 percent of all FDI), is particularly worth a closer look, not only because of the large amount but also for the other key contributions it makes to the U.S. economy.   

  • First, Japanese investment has risen rapidly over the last few years, becoming the top source of FDI in the U.S. in 2013 at nearly $45 billion. This is nearly two times more than FDI from Canada, nearly four times more than from Germany, and nearly 19 times more than from China in the same year.
  • Second, Japanese affiliates in the United States are directly responsible for nearly 719,000 U.S. jobs (2012) – an increase of 64,000 jobs in just two years. California leads the way with over 110,000 people employed by Japanese affiliates, but 12 other states have over 20,000 people employed by Japanese affiliates. These jobs tend to pay more than the average, and range across manufacturing, technology, life science, wholesale, and service industries.
  • Third, Japanese affiliates in the United States also were responsible for $68 billion in U.S. goods exports in 2012, the highest value among foreign affiliate goods exports from the United States.

In sum, Japanese investment in the United States has been responsible for high-paying jobs, innovation-driving productivity, and growth-generating U.S. exports. Japanese investment also is spread widely across all 50 U.S. states and the District of Columbia.

Japanese and other foreign investors recognize a good thing when they see it, and America remains at the top of their list for investment. But to sustain high levels of investment, U.S. economic policy must support economic growth, innovation, and new opportunity. 

The importance of FDI, and policies and measures that support its continued growth, will be in focus at the upcoming SelectUSA 2016 Investment Summit this week in Washington, D.C.

The U.S. Chamber of Commerce actively supports this opportunity to showcase to global investors the innumerable new investment opportunities available across the United States.

The Chamber knows that foreign investment is essential to the economic and social fabric of many U.S. states and communities, and so it remains critical that we continue to send a strong signal – both through words and deeds – that America welcomes FDI and is open for business.

About the Author

About the Author

Former Vice President, Asia and acting head of Asia of the U.S. Chamber of Commerce

James Fatheree is the former Vice President, Asia and acting head of Asia at the U.S. Chamber of Commerce.