Business Roundtable engaged PwC to quantify the impacts on the U.S. economy of globally engaged U.S. companies in terms of employment, labor income, and value added.1 This report provides PwC’s economic impact estimates for 2011 at the national and state level. The study was carried out using data from the U.S. Bureau of Economic Analysis and the IMPLAN model, an input-output (I-O) model based on federal government data. For purposes of this report, a globally engaged U.S. company is defined as a U.S.-headquartered business entity that owns or controls 10 percent or more of the voting securities of a foreign business entity.

In describing these economic impacts, this report considers three separate channels -- the direct impact, the indirect impact, and the induced impact -- that in aggregate provide a measure of the total economic impact of globally engaged U.S. companies.

• Direct impact is measured as the jobs, labor income, and value added within globally engaged U.S. companies.
• Indirect impact is measured as the jobs, labor income, and value added occurring throughout the supply chain of globally engaged U.S. companies.
• Induced impact is measured as the jobs, labor income, and value added resulting from household spending of labor and proprietor’s income earned either directly or indirectly from the spending of globally engaged U.S. companies.

This report quantifies the operational impact (due to purchases of intermediate inputs and payments of labor compensation and dividends by globally engaged U.S. companies) and capital investment impact (due to investment in new structures and equipment by globally engaged U.S. companies) at the national level. Operational impacts are also provided at the state level.2 These economic impacts include all of the linkages of globally engaged U.S. companies to their suppliers. They do not capture any economic impact on production in sectors that use the output of globally engaged U.S. companies.

In 2011, globally engaged U.S. companies directly employed 22.9 million American workers, including both full-time and part-time jobs. These companies paid out $1.7 trillion in labor income and directly contributed $3.0 trillion to U.S. gross domestic product (“GDP”). Including direct, indirect, and induced impacts, globally engaged U.S. companies supported 71.2 million jobs, $4.1 trillion in labor income (including wages and salaries and benefits as well as proprietors’ income), and $6.9 trillion in GDP.