US multinational companies contribute disproportionately to private-sector real GDP growth (or value added) and labor productivity. The record of these companies on employment growth across sectors and business cycles is mixed, however. These are the conclusions from a new McKinsey Global Institute (MGI) report, Growth and competitiveness in the United States: The role of its multinational companies. With the US economic recovery underway, government and business leaders are seeking to identify and nurture future sources of economic growth. In this report, MGI examines the contributions of US multinational corporations and the shifting global landscape in which they make decisions about where to participate and invest.
While other researchers have analyzed narrower aspects of US multinational activity, this report provides a more complete picture by detailing this segment’s share of a range of measures linked directly to US economic growth and performance (exhibit). For the report, which compares the contributions of US multinationals with overall economic activity by sector and over time, MGI analyzed data, reviewed academic literature, drew on its prior research on sector competitiveness, and interviewed senior executives from 26 of the largest and most well-known US multinationals.
In 2007, US multinationals accounted for 23 percent of US private-sector GDP (or value added). Since 1990, however, they have been responsible for 31 percent of the growth in real GDP and 41 percent of gains in US labor productivity. Their outsized contributions to productivity growth matter greatly because productivity increases have delivered nearly three-quarters of US real GDP growth since 2000, with the rest coming from employment gains—the reverse of the situation 30 years ago. Compared with other US companies, US multinationals are twice as concentrated in globally competitive sectors. Since many corporations confront similar pressures and choices, US multinationals may provide insights into how other companies—and the economy as a whole—can respond to increasingly intense global competition.
Read an executive summary or download the full report at the McKinsey & Company Web site.