Study: Companies Expanding Overseas Create U.S. Jobs

When U.S. companies trade or invest overseas, it fuels hiring and investment in the U.S., says Matthew Slaughter of the Tuck School of Business at Dartmouth College, in this groundbreaking study.

March 2013

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U.S. economic growth and job creation increasingly rely on the success of American companies in the global economy, reports an economic study released by Business Roundtable (BRT) and the U.S. Council for International Business (USCIB). When companies trade or invest overseas, it fuels hiring and investment in the U.S., says Matthew Slaughter of the Tuck School of Business at Dartmouth College, who authored the study.

American Companies and Global Supply Networks: Driving U.S. Economic Growth and Jobs by Connecting with the World, details the critical links between globally engaged U.S. companies, their international operations and supply networks, and U.S. economic growth and jobs.

Did you know?

  • Growth in demand abroad continues to surpass growth in demand in America.
  • In 2010, globally engaged U.S. companies employed 28.1 million Americans, performed $253.8 billion in R&D, made $587.3 billion in capital investments in the U.S., and bought more than $8 trillion in goods and services from U.S. suppliers.
  • U.S. companies of all sizes are globally engaged and pursuing new customers in the global marketplace. In fact, about 26 percent of U.S.-based multinational companies are classified by the U.S. government as small businesses.
  • International operations of U.S. companies primarily serve foreign markets, with more than 90 percent of the foreign production by U.S. companies sold to foreign customers, not imported back to the United States.

“When companies are globally engaged, they help create jobs not just in their own companies, but others they do business with, through their supply chains,” says Slaughter.

The typical U.S.-based company doing business internationally buys goods and services from more than 6,000 U.S. small businesses, with those purchases valued at more than $3 billion. After signing up customers overseas, many companies, especially small businesses, add domestic employees to meet the demand.

The economic study explains why U.S. companies need to pursue a mix of international and domestic business strategies to be competitive. It reinforces the need for U.S. policies that improve U.S. competitiveness and enhance the ability of U.S. companies to compete in the global marketplace.

Comments

  1. Entering the international market sooner rather than later is the new paradigm for American SME’s. Overall market potential is greater, competitive positioning is easier, and profitability and sustainability are easier to reach.

    Matthew Julian March 18, 2014

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