The construction cranes in L.A. are hard to overlook, as several billion-dollar construction projects rise into the sky. But not everyone knows that this progress, and the jobs that come with it are driven by overseas money.
In fact, nobody knows how much Foreign Direct Investment is coming into L.A. and the broader region, except for anecdotal evidence you can’t miss like the 70-story Wilshire Grand. What we do know is that Foreign Direct Investment (FDI) helps the Los Angeles region prosper economically. For every visible project, there are thousands of small and medium-size businesses in L.A. that are here because of FDI, and those businesses create good jobs.
But if we don’t recognize the importance of FDI, and don’t aggressively act to attract overseas investors, there are plenty of other cities in the nation – and in the world – which will take those jobs. Are we competing for the next investment? While anecdotal evidence suggests our region might be among the top recipients for FDI in the nation, we risk losing that economic engine unless we support organizations and efforts to tell L.A.’s story and meet with these investors to attract new projects and firms.
In 2013, the Global Cities Initiative, a joint project of the Brookings Institution and JPMorgan Chase, launched a first of its kind analysis of the jobs supported by FDI, and helped reshape the narrative of foreign ownership as something that can be highly beneficial for communities. For example, we know from the Global Cities research that foreign owned entities: 1) Support 5.6 million jobs in the US, 2) Tend to be more concentrated in high value advanced industries, which are the jobs our community wants, 3) Account for 19% of all R&D in the US, and 4) Pay 22% higher wages than average.
Now it’s time to look more closely at the role of FDI in Los Angeles. What types of investment are shaping our economy, like affordable housing, hotels near our convention center, or infrastructure to make our region more resilient? How many jobs rely on this source of activity?
The answers are coming, as World Trade Center LA and LAEDC release the first FDI study for the region in nearly a decade. Good timing too, because foreign investors will be eyeing that report when they stop in L.A. for the SELECT LA Investment Summit on their way to Washington D.C., where they will be hearing competitor pitches from all the other cities and states in the nation.
As Angelinos, we can’t rest our hats on one event. Thousands of jobs in our region require sustained efforts to remain a world leader in Foreign Direct Investment attraction.
Joni Topper is Managing Director Commercial Bank, JPMorgan Chase Los Angeles. Stephen Cheung is President of World Trade Center Los Angeles.
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