Lana Rhoades
Majority-owned U.S. affiliates of foreign multinational enterprises employed 8.57 million workers in the United States in 2024, marking a slight increase of 0.2 percent from 8.56 million workers in 2023, according to recently released statistics from the U.S. Bureau of Economic Analysis (BEA). This incremental growth underscores the continued, albeit steady, presence of foreign-owned businesses as significant employers within the American economy. While the overall employment figures show a marginal uptick, the data also reveals nuances in their contribution to key economic indicators, including value added, capital expenditures, and research and development activities.
These U.S. affiliates, which represent the U.S. operations of companies where foreign entities hold a controlling interest, accounted for 6.1 percent of total private-industry employment in the United States in 2024. This figure represents a slight decrease from 6.2 percent in the previous year, suggesting that while the absolute number of jobs is growing, their proportional share of the total private sector workforce has seen a minor contraction. This could be attributed to various factors, including faster growth in other sectors of the U.S. economy or shifts in the composition of employment across industries.
The BEA’s comprehensive report, which details the operations and finances of these foreign-owned U.S. entities, highlights that employment was most concentrated in the manufacturing and retail trade sectors. These industries have historically been key areas for foreign direct investment and have continued to be significant employers for U.S. affiliates. Furthermore, the data identifies the United Kingdom, Japan, and Germany as the primary countries of origin for the ultimate beneficial owners (UBOs) of the largest employers among these U.S. affiliates. This reflects long-standing trade and investment relationships between the United States and these major global economies.
Beyond employment, the economic footprint of these foreign-owned U.S. businesses extends to their direct contribution to the nation’s Gross Domestic Product (GDP). The current-dollar value added by U.S. affiliates, a key measure of their economic output and contribution to U.S. GDP, saw a more substantial increase of 4.3 percent, reaching $1.52 trillion in 2024. Despite this robust growth in value added, their share of total U.S. business-sector value added slightly declined from 6.8 percent in 2023 to 6.7 percent in 2024. This indicates that while foreign affiliates are producing more economic value, the overall U.S. business sector has expanded at a slightly faster pace.
Investment in the future is also a key aspect of the operations of these foreign-owned entities. Expenditures for property, plant, and equipment by U.S. affiliates rose by 3.3 percent to $328.0 billion in 2024. This signifies a commitment to expanding their physical infrastructure and productive capacity within the United States, which can lead to further job creation and economic activity in the long term.
Innovation remains a critical driver of economic growth, and U.S. affiliates of foreign multinationals are significant contributors to this area. Research and development (R&D) performed by these entities increased by a notable 5.3 percent, reaching $95.5 billion in 2024. This substantial investment highlights the role of foreign-owned companies in driving technological advancement and innovation within the U.S. economy. In fact, these affiliates accounted for a significant 12.4 percent of total U.S. business R&D in 2024, underscoring their importance as centers of innovation and knowledge creation.
Geographically, the impact of these foreign-owned businesses is not evenly distributed across the United States. California led the nation in U.S. affiliate employment, with 885,200 workers. Texas followed with 717,400 employees, and New York ranked third with 556,700 workers. In each of these leading states, the manufacturing sector was the largest employer among U.S. affiliates, demonstrating the continued importance of this industry in absorbing labor within foreign-owned enterprises. This concentration in major economic hubs reflects patterns of foreign direct investment, often drawn to large markets, skilled workforces, and established industrial bases.
The BEA’s report provides a detailed snapshot of the economic activities of U.S. affiliates of foreign multinational enterprises. Beyond employment and value added, the statistics encompass a wide range of financial and operational data, including sales, balance sheet and income statement items, compensation of employees, and trade activities. This granular data is crucial for policymakers, economists, and businesses seeking to understand the multifaceted contributions of foreign direct investment to the U.S. economy.
Updates and Revisions: Refining the Economic Picture
The release of the 2024 data is accompanied by revisions to the 2023 statistics, a standard practice that incorporates newly available and revised source data. Preliminary estimates for 2023, initially released in December 2025, have been refined. For instance, the number of employees in 2023 has been revised from a preliminary estimate of 8,661.8 thousand to a revised estimate of 8,556.9 thousand. Similarly, value added for 2023 was revised from $1,469.1 billion to $1,456.3 billion. Expenditures for property, plant, and equipment saw a revision from $322.7 billion to $317.6 billion, while research and development expenditures were adjusted from $87.8 billion to $90.6 billion. These revisions are essential for maintaining the accuracy and reliability of economic data, providing a more precise understanding of past economic trends.
Context and Chronology of Foreign Direct Investment in the U.S.
The presence of foreign-owned businesses in the United States is not a recent phenomenon. For decades, foreign direct investment (FDI) has played a crucial role in shaping the American economic landscape. Historically, post-World War II reconstruction efforts and subsequent global economic integration fostered an environment conducive to cross-border investment. Major waves of FDI have been driven by factors such as access to the large U.S. consumer market, technological advancements, favorable regulatory environments, and the availability of a skilled workforce.
In the latter half of the 20th century and into the 21st, countries like the United Kingdom, Japan, Germany, France, and increasingly, China and Canada, have been significant sources of FDI into the U.S. These investments have spanned a wide array of sectors, from automotive manufacturing and technology to finance and pharmaceuticals. The BEA’s data consistently tracks these trends, providing a vital resource for understanding the dynamics of global economic interdependence. The slight increase in employment in 2024, following a period of potential global economic uncertainty due to geopolitical events and supply chain disruptions, suggests a resilience in the foreign-owned business sector.
Analysis of Implications and Broader Economic Impact
The BEA’s findings offer several key insights into the role of foreign-owned businesses in the U.S. economy. The consistent employment of millions of Americans by these entities underscores their importance as major job creators. The growth in value added, even if their proportional share has slightly decreased, indicates that these businesses are expanding their economic output and contributing significantly to the nation’s wealth.
The substantial investments in property, plant, and equipment signal a long-term commitment to the U.S. market. These capital expenditures are not only important for the companies themselves but also generate demand for goods and services from U.S. suppliers, creating a ripple effect throughout the economy. Furthermore, the robust investment in research and development by foreign affiliates is critical for maintaining U.S. competitiveness in the global innovation landscape. By conducting R&D within the United States, these companies contribute to the development of new technologies, products, and processes, which can lead to higher productivity and economic growth.
The slight decrease in the proportional share of employment and value added, while not alarming, warrants continued observation. It could reflect a maturing of the FDI landscape, with other sectors of the U.S. economy experiencing even more rapid growth. Alternatively, it might suggest shifts in global investment patterns or evolving competitive dynamics. Policymakers often monitor these trends to assess the overall health of the U.S. economy and to identify areas where further support or strategic adjustments might be necessary.
The concentration of employment in states like California, Texas, and New York highlights the economic significance of these regions as hubs for international business. These states often benefit from the direct and indirect economic impacts of foreign investment, including job creation, tax revenues, and the development of specialized industries.
Future Outlook and Data Availability
The BEA will continue to release updated statistics on the activities of U.S. affiliates of foreign multinational enterprises. The next release, scheduled for Spring 2027, will cover activities for 2025. This ongoing data collection and dissemination are vital for tracking economic trends, informing policy decisions, and providing a clear picture of the U.S. economy’s integration into the global marketplace.
The BEA’s commitment to providing comprehensive data is evident in the availability of detailed tables on its website, covering aspects such as sales, compensation, trade, and more. These resources empower researchers, businesses, and the public to delve deeper into the specifics of foreign direct investment and its impact. It is also important to note that the BEA employs methods like coarsening, including rounding and aggregation, to protect the confidentiality of survey respondents while enabling the publication of more detailed data. This approach ensures that while individual company data remains private, the broader economic picture is clearly illuminated.
In conclusion, the latest statistics from the U.S. Bureau of Economic Analysis reaffirm the substantial and ongoing contribution of majority-owned U.S. affiliates of foreign multinational enterprises to the American economy. While modest employment growth was observed in 2024, the significant increases in value added and research and development expenditures underscore the critical role these businesses play in driving economic output, fostering innovation, and supporting the U.S. workforce. Continued monitoring of these trends will be essential for understanding the evolving landscape of global investment and its impact on domestic economic prosperity.
