Competing for global Investment
- October 29, 2018
The U.S. economy exemplifies success on a global stage. America leads the world in attracting international companies to invest and create jobs. No other country in the world can match our large consumer market, skilled workforce, innovative hubs and diverse industry. While Virginia outpaces the national average in the percentage of jobs supported by international employers, we lag behind some of our neighboring states. That is why we must continue to prioritize keeping the Commonwealth attractive to international employers.
When companies like Cascades, ProSeal America, Anton Paar USA or Polykon (a subsidiary of Air Liquide) build facilities and hire employees in the Richmond region, it is an example of foreign direct investment (FDI). When you consider all of the products and services produced by these global companies in the United States — you realize that foreign direct investment really is not that foreign at all.
International employers are an important part of Virginia’s economy. For example, it would take three Richmond Raceways to hold all the Virginians employed by international companies. What is more, these jobs offer wages and benefits that are 43 percent higher, on average, than the overall state private-sector. When a foreign-based company invests in the United States, it brings much more than financial capital. These employers often “import” world-class workforce training programs, build local supply chains and become part of the communities in which they sustainably operate.
International companies help diversify our economy, making it more resilient. RVA is home to more than 200 international companies, which have created more than 6,700 jobs locally since 1994. Currently, two-thirds of the Greater Richmond Partnership’s prospect pipeline is internationally-based.
International companies operating in the United States are a good measure of U.S. competitiveness. Not surprisingly, competition for this investment is fiercer than ever before. Fortunately, the Richmond region has a winning strategy for attracting some of the world’s industry leaders. Companies from countries all over the world including, Spain (Biomat USA), Brazil (Mavalerio), and the United Kingdom (Pryor Marking Technology) have decided to expand and grow in our area.
Favorable legislation and a business-friendly atmosphere helps Virginia stay at the top of best places to incorporate businesses, which is a factor when international firms establish American headquarters. In fact, during the past five years, job growth at international companies operating in Virginia has grown nearly four times faster than the state’s overall private-sector. This hard work and persistence has paid off for the Virginia economy and others are paying attention, too: Foreign Direct Magazine named Richmond as the top U.S. mid-sized city for FDI.
Nationally, international companies employ nearly 7 million Americans, including 20 percent of America’s manufacturing workforce. In fact, 54 percent of the manufacturing jobs created in the past five years came from international companies. These companies produce more than 23 percent of U.S. exports, shipping nearly a billion dollars in goods a day to customers around the world. International companies also reinvest $100 billion annually of their profits back into their U.S. operations and pay 17 percent of all federal corporate income taxes.
When international companies invest here, it means their home countries now have a stake in America’s success. Their investments also help spur U.S. companies to increase productivity through competition and fuel American innovation. American scientists and engineers employed by international companies are leading our nation’s innovation advantage.
International employers spend more than $57 billion on research and development activities, or 16 percent of all R&D performed by the private-sector. Israeli-based Sabra Dipping Co., which also operates the world’s largest hummus plant in Chesterfield County, is also home to its “Center of Excellence” R&D facility. The 20,000-square-foot center is the first-of-its-kind research and development center for refrigerated dips and spreads.
We will continue to tell international companies that the greater Richmond area is a welcoming location and has programs in place to help them succeed. For instance, the Global Assistance Program (GAP) is a program to assist international companies connect with localized business services to ease the transition when building a subsidiary and creating jobs. Think of GAP as a customized concierge service to help firms grow and succeed in RVA.
Working together, our region and our state can show the world that the Richmond region is a great place to call home.
Barry Matherly is the president and CEO of the Greater Richmond Partnership (GRP), the lead regional public-private economic development organization for the city of Richmond and counties of Chesterfield, Hanover and Henrico in Virginia. GRP recruits companies from all over the globe which provide employment opportunities and taxable capital investment for the community. Nancy McLernon is president and CEO of the Organization for International Investment (OFII), an association representing the unique interests of U.S. subsidiaries of global companies – or insourcing companies.