Op-Ed by Commerce Secretary Penny Pritzker
Opinion Editorial, The Hill
Reinvesting in America Is Strong and Growing

For years, companies have engaged in “labor arbitrage,” seeking lower wages outside of the United States.  But many firms are looking to reshore or expand U.S. operations because the global economic landscape is changing.  Managers are learning that there are often hidden costs to operating abroad. Low-cost energy and highly productive workers are changing the equation, as the competitive advantages offered by the United States grow increasingly important.

We have a real opportunity to create additional jobs as more companies are choosing to establish operations in this country. Earlier this month, A.T. Kearney’s annual Foreign Direct Investment Confidence Index ranked the United States as the top investment destination for the second year in a row, with the most positive net position of any country in the 16-year history of the index.  A few months earlier, the Boston Consulting Group found that the share of U.S. executives actively considering relocating manufacturing back from China to the United States rose to 54 percent in 2013, compared with 37 percent only 18 months ago.

Companies are investing in the United States for many reasons. First, there are often unexpected costs to operating abroad.  The cost of manufacturing goes far beyond wages – there’s travel and management time; the cost, time, and administrative burden of logistics; trade financing expenses; product quality issues; threats to intellectual property; the cost of regulatory compliance; political or security risks; and uncertainty of forecast demand.  The costs of other inputs – like real estate and energy – can make or break a company’s bottom line.

Next, successful manufacturing is more than just managing the costs – it’s also about finding the right competitive advantages, and that’s where the United States really shines. We have one of the most skilled and productive workforces, and we’re making it a priority to build the skills that are in high demand.

The United States also remains the most innovative place in the world, home to more than a third of total global research and development investment, as well as 15 of the top 25 leading research universities.  The United States produces nearly 30 percent of all patents worldwide, and the U.S. Patent and Trademark Office works hard to protect intellectual property rights. Advanced technology, including robotics and 3-D printing, are enabling U.S. manufacturers to drastically cut time to market and make better – and more customized – products.

Richelieu Legwear International, Inc., a legwear company that makes brands like Peds and Growing Socks, has decided to take advantage of all the United States has to offer. The company just announced an investment in North Carolina that will bring production and more than 200 jobs. The Commerce Department’s SelectUSA team played a role in finding Richelieu Legwear the information it needed to move its U.S. investment forward.

Richelieu Legwear is not alone.  Companies of all sizes and industries are investing – or re-investing – in the United States.  The Whirlpool Corporation recently moved the production of a line of front-load commercial washers from abroad to Clyde, Ohio, home to the largest washing machine factory in the world. Eighty percent of Whirlpool products on the market here are made in the United States.

If you or your children have played with Tinkertoys, Lincoln Logs, or other construction toys made by K’NEX Brands, you’ve supported American manufacturing. This family-owned company in Hatfield, Pennsylvania, has been moving production back from Asia. Roughly 95 percent of its parts and 80 percent of its finished products are now made domestically.

Finally, a manufacturing base in the United States not only allows companies, like those we just mentioned, to rapidly reach more than 317 million consumers in the world’s most attractive market; it also provides convenient access to approximately 425 million additional consumers through free trade agreements and the most rapid export clearances of all countries surveyed by the World Bank.

The decision of where to locate operations may be the most important decision a company ever makes.  Congress and the Obama Administration have been working together to attract investment to, or back to, America’s shores. Progress has been made in part due to the funding Congress provided to SelectUSA for the first time in 2014. With additional funding being sought in the FY15 budget, we fully anticipate seeing more and more companies opening and expanding their operations in the United States, supporting and creating thousands of good-paying jobs.

The U.S. government stands ready to help businesses choose the United States, because, as President Obama has said, “When you bet on America, that bet pays off.”