Foreign Direct Investment in State Bouncing Back Despite Global Crises
California gained 271 foreign-owned enterprises last year after years of losses caused by the COVID-19 pandemic, according to a recent report.
In 2022, an estimated 18,237 foreign-owned enterprises (FOEs) operated in California, employing 635,532 residents and contributing $69.5 billion in wages.
The report, compiled by the World Trade Center Los Angeles (WTCLA) in partnership with the Governor’s Office of Business and Economic Development (GO-Biz) and the Center for International Business Education (CIBE) of Loyola Marymount University, found that the international economy quickly unshackled itself from the lingering effects of the COVID-19 pandemic and finished 2022 with a remarkable average unemployment rate below 4%, amidst a multitude of crises on the global stage, including the continued war in Ukraine and resulting food instability and high energy prices, and financial turmoil and debt pressures from inflation.
Investment in California
Japan is once again the top investor in California, with 3,471 firms employing 101,169 residents and paying more than $11 billion in wages. The United Kingdom, France and Canada maintain their rankings from the previous year, while Germany joins the top five.
Southern California holds the most foreign direct investment (FDI) in the state, with 11,121 FOEs and 404,559 Californian workers. The Bay Area contributes 5,730 establishments and nearly 195,000 employees, with more than 5,000 new workers added in the past year. The remaining 1,386 FOEs and 36,000 workers are located in Greater California.
FDI by Industry
From an industry sector standpoint, professional and business services had a strong performance year over year, with 123 FOEs and more than 17,000 workers added in California, while retail trade and wholesale trade also saw major gains.
Despite employing the largest number of Californians by a large margin, the manufacturing industry saw a decrease of more than 20,000 jobs supported by FOEs. Financial activities, leisure, and hospitality also struggled, losing jobs and firms.
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