Let’s keep open the doors to US innovation

Late last year, the Department of Commerce released numbers showing that foreign direct investment (FDI) in high-tech industries reached over $1.6 trillion in 2016 and supported 2.1 million jobs in the United States. Further, the data confirmed U.S. affiliates of foreign-owned firms in the high-tech sector also spend nearly $42 billion on research and development (R&D).

When many of us think about FDI or R&D, we may think of scientists in lab coats or car manufacturing plants. However, in Austin, Texas, we have seen the complete and total evolution of a community solely as a result of FDI and R&D in our area. It is no understatement that this investment put Austin on the map as a modern, tech-centered hub while keeping Austin weird, so to speak.

{mosads}This huge development hasn’t been without its growing pains including needed new transportation and network infrastructure. But, the importance of investment from companies like Oracle, Samsung, and IBM in our area is clear. Every year, billions of dollars of investment flow into our area, bringing new opportunities for skilled workers and new graduates. Austin’s economy grew nearly 5 percent in 2016, making it the fourth fastest growing major metro economy that year. Over the last five years alone, real per capita GDP is up 16.6 percent. The tide of FDI lifts all boats. 

Considering such growth, it is easy to see Austin as an incredible success story — one that the tech sector is eager to replicate to grow the digital economy and bring new opportunity and economic growth to cities big and small across the country. 

Unfortunately, in Washington, investing in America seems to be getting a lot harder as the Trump administration continues allowing a series of unjustified tariffs and sanctions to move forward. These are trade actions designed to help just a few American companies at the expense of the virtuous cycle of innovation and investment that has transformed cities across Texas and the nation. One egregious example involves appliance giant Whirlpool that is trying to win tariffs against two of its main competitors, Samsung and LG. In this situation, at risk are massive economic development plans and facilities that will bring job growth, high tech manufacturing and R&D operations to communities in South Carolina and Tennessee.  

Unwarranted tariffs designed to protect individual companies are sure to bring many unforeseen consequences and slow the transformation of American cities. Such posturing against earnest investments in America will stifle the opportunity to pivot communities into modern cities that thrive by attracting FDI and the jobs and innovation that those dollars bring. Protectionism in Washington stands to only diminish the potential for other metro areas to experience the same boom of growth that Austin has benefited from in the past few decades.

So much benefit has come to this nation because we have opened our doors to FDI and new innovations in the past. The idea that President Trump and his administration would discourage the sort of trends that are revitalizing American cities and modernizing economies is unfortunate – but there’s still time to save the day and reject the proposed tariffs that would put so much investment at risk. Our communities, jobs and our collective futures depend on it. 

Tim Hayden is the President and Co-Managing Partner of Brain+Trust Partners in Austin, Texas.