SelectUSA: U.S. Inbound Investment Promotion
Updated January 28, 2022
SelectUSA: U.S. Inbound Investment Promotion
U.S. efforts to attract foreign direct investment (FDI)
The United States’ large consumer market, strong legal
primarily take place at U.S. state and local levels, such as
protections, such as for intellectual property rights, high
through economic development organizations (EDOs),
labor productivity, and position as an innovation and
which work to attract business investment locally and
technology hub have made the United States an attractive
regionally. At the same time, federal efforts to coordinate
destination for investors. At the same time, developing
investment promotion also exist. Such efforts currently are
economies have increasingly become competitive
focused through SelectUSA, a Department of Commerce
destinations for FDI (see Figure 2), leading to increased
program established in 2011 (Executive Order 13577).
global competition to attract FDI.
SelectUSA aims to coordinate federal efforts to attract and
Figure 2. Destination of Global Inbound FDI by
retain “job-creating” business investment in the United
Country Grouping, 2000 and 2020
States. The program focuses both on drawing foreign
investors to the United States and working to “re-shore”
U.S. firms. Given the potential economic and
competitiveness implications of U.S. efforts to attract
inbound FDI, and the specific impacts that such activity
may have on U.S. districts and states, Members of Congress
may be interested in better understanding SelectUSA.
Inbound Investment Background
The United States is a major destination for FDI.
Businesses invest in the United States by establishing new
Source: CRS. Data from U.N. Conference on Trade and
operations (“greenfield investments”), purchasing existing
Development (UNCTAD), World Investment Report 2021.
operations of another company (e.g., mergers and
Note: Data on a historical stock basis. Parts may not sum to total
acquisitions), or adding capital to existing U.S. operations.
due to rounding.
In 2020, expenditures for new FDI in the United States (to
Select USA Overview
acquire, establish, or expand U.S. businesses) totaled
SelectUSA Structure. The Global Markets unit (also
$120.7 billion (preliminary data, U.S. Bureau of Economic
known as the U.S. Commercial Service) of the Department
Analysis (BEA); see Figure 1). This represented a 45.4%
of Commerce’s International Trade Administration (ITA)
decrease from 2019 ($221.2 billion) and a 61.6% decrease
houses SelectUSA. In addition to supporting inward
from the annual average of $314.4 billion for 2014-2019.
investment promotion, the Global Markets unit also
The decline reflected global patterns in FDI flows in 2020,
provides export assistance services for U.S. firms.
due to ongoing uncertainty about the Coronavirus Disease
2019 (COVID-19) pandemic and other factors.
An Executive Director leads SelectUSA. Investment
specialists manage portfolios of international markets and
Figure 1. New FDI in the United States: Expenditures
U.S. regions. SelectUSA uses resources of Global Markets
commercial service officers internationally. U.S. foreign
missions of the Department of State also provide support.
A Federal Interagency Investment Working Group, chaired
by SelectUSA’s Executive Director, aims to enhance
coordination in federal assistance for business investment
decisions across more than 20 agencies.
Source: CRS. Data from U.S. Bureau of Economic Analysis (BEA).
Services. SelectUSA services include:
Note: Data for 2019 are preliminary.
providing information and data on FDI to businesses
Foreign firms operating in the United States through their
and EDOs;
affiliates play a significant role in the U.S. economy. In
connecting companies with EDOs and federal resources;
2019, majority-owned affiliates of foreign firms in the
acting as an “ombudsman” to help companies navigate
United States contributed $1.1 trillion in value-added to the
the U.S. regulatory environment;
U.S. gross domestic product (GDP) (7.0% of total U.S.
providing an international platform for EDOs to market
business sector value-added); and they employed 7.95
their locations as investment destinations through its
million workers (6.0% of total U.S. private-industry
high-level summit (typically annually), “road shows”
employment), the largest being manufacturing and retail
abroad, and customized fee-based services; and
(latest available data, BEA).
https://crsreports.congress.gov
SelectUSA: U.S. Inbound Investment Promotion
coordinating high-level engagement at the national level
attracting investment and, in turn, boost U.S. exports and
with EDOs to advocate that a firm invest in the United
jobs, as well as send a message internationally of U.S.
States over a foreign location for a particular project.
interest in competing for investment. Another view is that
SelectUSA duplicates existing state- and local-level
SelectUSA has certain special initiatives, including a
investment promotion programs and that policies to
technology program to connect early-stage and startup
improve the U.S. investment environment, such as in terms
companies with investment prospects in the United States.
of education, the labor force, and the tax system, would be
SelectUSA states that it operates with “strict geographical
more effective in attracting and retaining FDI.
neutrality,” whereby it does not advocate for investment in
one U.S. location over another, though it can assist specific
Programs and Performance Metrics. Congress may
locations with individual promotional activities on a first-
examine SelectUSA programs’ ability to attract FDI
come, first-served basis. It also states that it does not
effectively in light of increased competition for FDI from
engage in activities that encourage inbound investment by
emerging markets, as well as the challenges to FDI
state-owned enterprises (SOEs) of non-market economies.
presented by the COVID-19 pandemic. It may examine if
innovations to SelectUSA programs are needed. Congress
Funding. Appropriations for SelectUSA have grown from
also could examine how SelectUSA measures the
less than $1 million in the program’s early years, to $10.0
effectiveness of its activities, and whether more regular
million in recent years—a relatively small share of the
reporting may be warranted.
overall Global Markets unit budget ($333.0 million in
FY2020) (see Figure 3).
Economic Debate. Inbound investment is tied to
supporting U.S. jobs and exports, but it raises concerns
Figure 3. SelectUSA Funding, FY2012-FY2020
about job losses, for instance, from mergers and
acquisitions. To the extent that foreign investors compete
with domestic firms for capital funds, Congress may
examine the net U.S. economic impact of inbound FDI.
(Outbound FDI debate is beyond the scope of this product.)
Congress also may consider SelectUSA’s role in facilitating
investment, and in turn, U.S. jobs and exports. On one
hand, macroeconomic factors, such as economic growth
and exchange rates, may exert primary influence on
investors’ decisions to locate in the United States and may
Source: CRS. Data from joint explanatory statements, accompanying
outweigh effects of the program. On the other hand,
the annual appropriations acts.
SelectUSA may play an additional role in attracting
For FY2021, Congress did not provide a specific funding
investments. Measuring the impact of a government
level for SelectUSA. For FY2022, neither the Biden
program can be complicated and sensitive to the
Administration’s budget justification, nor the House and
assumptions made.
Senate appropriations bills for Commerce, Science, Justice
Focus Areas. Congress may consider whether to direct
and Related Agencies (CJS) provide a specific funding
SelectUSA to focus on supporting FDI for specific
level for SelectUSA.
objectives. A June 2021 White House report (pursuant to
Recent Activity. In June 2021, SelectUSA hosted its first
Executive Order 14017, “America’s Supply Chains”)
virtual Investment Summit, following a postponement of its
recommends using SelectUSA to attract investment in
annual in-person summit from 2020, due to the COVID-19
semiconductor manufacturing supply chains. Legislation
pandemic. SelectUSA reported that the summit had more
introduced in the 117th Congress (S. 3309) would direct
than 3,400 participants from across the United States and
SelectUSA to coordinate with state-level EDOs to increase
over 80 international markets.
FDI in semiconductor-related manufacturing and
production in order to help secure the U.S. semiconductor
According to SelectUSA, since its inception, it has
supply chain. Other potential areas of focus include, for
facilitated more than $102 billion in what it describes as
instance, to direct SelectUSA to seek to increase FDI
“client-verified investment,” supporting over 132,000 U.S.
opportunities for rural areas and smaller states (e.g., H.R.
jobs. ITA’s FY2022 congressional budget justification
3288 in the 116th Congress).
reports that, in FY2020, SelectUSA assisted over 115
investment deals, valued at nearly $17.7 billion and in
Investment Policy Goals. U.S. investment policy includes
support of some 14,000 U.S. jobs.
consideration of the national security impact of certain FDI
transactions in the United States (e.g., potential foreign
Key Issues for Congress
acquisitions of firms in critical sectors) by the Committee
Authorization and Resources. Congress may consider
on Foreign Investment in the United States (CFIUS).
whether to codify SelectUSA and whether to adjust its
Congress may examine how to balance federal efforts to
funding (see, for example, H.R. 3288 in the 116th
attract FDI and to protect national security.
Congress). Relatedly, Congress may consider whether
For more information, see CRS In Focus IF10636, Foreign
SelectUSA sufficiently leverages sub-federal efforts to
Direct Investment: Overview and Issues, by Shayerah I.
attract investment.
Akhtar and James K. Jackson.
One view is that a permanent or long-term authorization
and consistent resources could stabilize SelectUSA’s role in
https://crsreports.congress.gov
SelectUSA: U.S. Inbound Investment Promotion
IF10674
Shayerah I. Akhtar, Specialist in International Trade and
Finance
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10674 · VERSION 6 · UPDATED