U.S. Companies’ Success Abroad Fosters Growth at Home New Study Shows

Authored by Matthew Slaughter, Ph.D., of the Tuck School of Business at Dartmouth, “American Companies and Global Supply Networks: Driving U.S. Economic Growth and Jobs by Connecting with the World”, details the critical links among globally engaged U.S. companies, their international operations and supply networks, and U.S. economic growth and employment.

Key Findings Reveal Globally Engaged U.S. Companies:

  • Perform large shares of critical productivity-enhancing activities in America (see Figure 1 below).
  • Foresee maintaining a major U.S. presence well into the future.
  • Drive economic growth and support jobs in America by expanding globally, which supports investment, R&D, and hiring in their U.S. operations.
  • Create jobs in America among other U.S. companies, such as small and medium-sized businesses within their supply chains.
  • Engage in the world marketplace to meet the rapid growth in demand from new markets and customers and to integrate into global supply networks.

Similarly, how these companies create jobs in America when venturing abroad remains a dynamic process. They may both expand and reduce jobs as strategies and opportunities evolve. They must also retain the flexibility to refine what they make, how and where they make it, and how and where they sell it in order to compete amid intense international competition.

The report shows American companies engaging globally to be a richly diverse group in size, employment, industry, markets, and customers. Fittingly, there is no single strategy for U.S. companies to follow to succeed when they venture abroad.

 

 

American Companies and Global Supply Networks_Matthew Slaughter Report Image

Rather, globally engaged American companies must create, implement, and change strategies from a global perspective, with dynamic differences in successful strategies both across companies and within companies over time. They require flexibility to experiment, learn, fail, adjust, and succeed in the global economy.

U.S. Parent's Share of U.S. Private Sector_2010
Figure 1: The share of key activities in the overall U.S. private sector accounted for by U.S.-headquartered multinational companies in 2010.
Consequently, U.S. policymakers must craft policies that promote U.S. competitiveness and that reflect a sound understanding that the success of American companies, and the U.S. workers they employ, increasingly hinges on their ability to engage globally.

About the Author: Dr. Matthew Slaughter is an Associate Dean for Faculty, Signal Companies’ Professor of Management, and Faculty Director of the Center for Global Business and Government at the Tuck School of Business at Dartmouth. Read his bio.