Jobs, jobs, jobs. That’s been the national mantra since the Great Recession hit in 2008, and it does not seem to be going anywhere. In our perpetual quest to illuminate U.S. connections with the world, Latitude News hit the streets of Danville, Illinois this week to ask people about the global economy. Danville’s large local employers include a VA hospital, a Quaker Foods factory and an airplane parts maker, but folks in Danville said local job prospects were dismal. They told our reporter Pam Dempsey that they were concerned about where local jobs were going.
Rick Zaayer (49), Amy Gaines (36) and Jerry McCoy (54) recognize a simple fact. As the world gets smaller, the “U.S. economy” is only a cog in the global machine.
Who’s the competition?
A recent study from the Harvard Business School measures U.S. competitiveness with just about every other country. The conclusion: America is having trouble competing, and business leaders are pretty sure it will only get worse.
The authors survey 1,700 Harvard grads who were personally involved in making a decision between placing jobs and dollars in the U.S. or somewhere else. “Somewhere else” meant just about any other country with China, India, Brazil, Mexico and Singapore in the lead, respectively. But the list is long – the U.S. was in direct competition with a total of 146 countries. In the end, two-thirds of the decisions led to investment abroad. Not good news for Danville.
“Facilities involving large numbers of jobs, high-end work, and groups of activities located together moved out of the U.S. much faster than they moved in,” the authors stated.
What’s tipping the competitive scale? The survey’s respondents do not think the U.S. is keeping pace with emerging economies, blaming “America’s tax code, political system, K-12 education system, macroeconomic policies, legal framework, regulations, infrastructure, and workforce skills” – just a few things we should be able to sort out in no time.
The new global landscape: foreigners are investing in the U.S. too
But are other countries investing money in the U.S.? As it turns out, they are – and the numbers are increasing.
The Bureau of Economic Analysis has plenty of statistics at hand, and its website allows you to create your own charts. The two charts below will give a sense of how much money U.S. companies are investing abroad, and how much money foreign companies are investing in the U.S. – so called foreign direct investment (FDI).
Both numbers were on the rise in the five years leading up to 2010 (the most recent year for which the Bureau has statistics).
Ralph Stewart, a spokesman for the Bureau, says FDI crosses all sectors of the American economy. Here at Latitude News we’ve covered the Brazilian aircraft manufacturer Embraer opening an offshore plant on Florida’s Space Coast, Chinese investment in Michigan and watch this space, we’re going to be reporting on a Chilean/Canadian joint venture opening a copper mine in Minnesota – all new jobs for Americans.
Any interesting signs of FDI in your neighborhood? Let us know!Discuss this
Still, U.S. investment abroad is outpacing foreign investment here. In 2010, about $3.9 trillion American dollars were spent abroad, whereas roughly $2.3 trillion foreign dollars were spent here. Stewart told Latitude News that the data are symptomatic of a new landscape.
“It’s become a global economy,” says Stewart. “Investment from both sides is increasing. I think that will continue as the economy becomes more global.”
Interviews in Danville conducted by Pamela G. Dempsey, a reporter with CU-CitizenAccess, a community news project.