The FDI Report (Foreign Director Investment Report in Southern California, 2017) was announced at “Select LA International Investment Summit 2017” held on June 15th. JBA was the sponsor in preparing this report for fiscal year 2016.

Mr. Stephen Cheung, President WTCL (Left), Mr. Hitoshi Ishikawa, President, JBA (Right)

Overseas investments by country
Japan is No. 1 for the second consecutive year

The Los Angeles County Economic Development Corporation (LAEDC), a cooperating organization of JBA under the subsidiary of the World Trade Center Los Angeles (WTCLA) hosted this year’s “Select LA International” in Downtown Los Angeles over the course of three days from June 14 to June 16.

The event focused on trade trends in Southern California, introducing opportunities for direct investment and market trends in Los Angeles County, with more than 300 local and foreign business leaders participating. Also from JBA, Mr. Hitoshi Ishikawa, President and the committee members of the Business and Commerce Committee were in attendance.

On the second day of Select LA (June 15th), the Foreign Direct Investment in Southern California, 2017 report was announced. The report was a summary of the data on Southern California’s foreign investment and foreign activities, such as trade. JBA has recognized the importance of objective and official data to show the degree of contribution of Japanese companies to the Southern California region and contributed as a sponsor for preparing the report in fiscal year 2016.

President Mr. Stephen Cheung of the WTCLA made a presentation, Associate Professor Fynnwin Prager of California State University, Dominguez Hills was involved in the preparation of the report, and Associate Professor Jose Martinez (also from California State University, Dominguez Hills) gave a speech.

In this year’s report, investigations were conducted on foreign direct investment in Southern California (Los Angeles, Orange County, San Bernardino County, Riverside, Ventura, and San Diego) and data was reported by country on the number of job creation, the number of companies, wages, data by industry along with changes from last year’s report. In addition, surveys were conducted asking companies regarding “business satisfaction in Southern California.” The results of the surveys posted investigations regarding the future of relocation of potential candidates, investees, and analysis of various issues in doing business in Southern California. Furthermore, geographical analysis was added to the data, which showed as a result that in areas where companies established by overseas investment were concentrated, there was a tendency for an increase in employment and the unemployment rate was shown to be low.

Looking at country-specific direct investment, Japan’s contribution stands out—following the last fiscal year, the number of employment, enterprises, and total wages were all in first place.

Employment by foreign companies numbered 87,247, accounting for 19.9% of the employment in Southern California.

The number of companies was shown to be at 2,465, and the wage total at 55,128,000 million dollars.
In terms of employment, Japan ranked first, followed by Britain in second place, Canada in third, France in fourth, followed by Germany, Switzerland, Sweden. Other Asian countries such as China and Korea ranked 9th and 13th respectively (with Korea totaling 7,464 persons).

Top 10 Southern California FOEs by Source Nation Distribution map of Japanese companies

Japan as a long-term partner in Southern California

Regarding investment from Japan, Mr. Stephen Cheung, President, WTCLA stated “Japan is a very important economic partner with a long history in Southern California and will continue to be an important partner in the future.”

While investment from China, which is becoming a hot topic in recent years, is concentrated in real estate, entertainment, and hotel industries, investment from Japan contributes to the regional economy over the long term in a wide range of fields such as bioscience, medicine and manufacturing.

In addition, when asked about industries are considered to be promising investments from Japan, the fields of IT, aerospace, biosciences, pharmaceuticals, electronics, and the electric industry in which Silicon Beach is emerging were mentioned.

In response to the FDI report, Mr. Hitoshi Ishikawa, President, JBA said that the significance of Japanese companies doing business in the region is (1): the existence of Japanese-affiliated communities with a long history of being culturally close to Japan (2): a concentration of first-rate universities and work force, (3): a new base for the IT industry, typified by Silicon Beach, which can be expected to fuse with existing industries, (4): the emergence of four large markets and industries. In addition, while the news of corporations moving out of Southern California continues, the number of JBA member companies in the past few years has remained unchanged. While there are enterprises that move out of the state, there are also many new companies entering from Japan. Southern California’s attractiveness as a gateway to the US has not declined. In the future, JBA will cooperate with WTCLA and LAEDC to raise the appeal of Japanese companies’ contribution in Southern California, while at the same time promote Japanese companies’ in the region to create such business and employment in Japan.

The FDI report is available to the public and can be found on the LAEDC website at: https://laedc.org/2017/06/16/fdi-report/

In addition, the report can be viewed on the WTCLA website (https://www.wtcla.org/foreign-direct-investment) and allows you to browse and search the distribution of corporate clusters in the report by country, region, and Industry.

Attendees of JBA member