Tech Firms’ Investments Span Globe
U.S. high-tech companies poured a record $95 billion into international markets in 1998, spreading the country’s spectacular Internet wealth around the globe and further stitching together the economies of the world, according to an industry-sponsored report.
That money, which has helped jump-start bustling technology pockets in places such as Costa Rica and Hungary, represents an 86% increase from the $51 billion in overseas investments in 1993 and exceeds the money sunk into the giant petroleum industry overseas, according to a study to be released today by the American Electronics Assn. and Nasdaq.
For the first time, U.S. companies’ investments have begun to shift from established technology hubs such as Japan, Italy, Germany and France to places such as Ireland and Singapore that might have smaller economies but are more “entrepreneur-friendly,” the study says.
The United States exported a record $181 billion in 1999, representing 26% of all goods exported.
But the industry ran up a trade deficit of about $40 billion because a significant percentage of high-tech imports are actually products manufactured for U.S. companies by contract facilities abroad, such as those along the Mexican border.
Foreign companies, in turn, poured $68 billion into high-tech ventures in the United States in 1998.
“The concept of globalization is really taking place as we talk, and high tech is driving it,” said William T. Archey, president and chief executive of the American Electronics Assn.
The large investments U.S. companies have made abroad do not hurt the domestic economy and might have helped create a back-and-forth between countries that may have boosted certain sectors of high tech, said Stephen Levy, director of the Center for the Continuing Study of the California Economy.
Technology has an increasingly important role in the U.S. economy; the industry made up 6.5% of the gross domestic product in 1998, up from 5.6% in 1993.