- The Washington Times - Monday, March 19, 2001

Links between the Washington area and foreign countries added $26.6 billion to the region's economic activity last year, according to a study by the Greater Washington Initiative.

The figure represents a 51 percent increase over 1997, when a similar study by Deloitte and Touche found an impact of $17.6 billion on the District of Columbia and the 21 surrounding political jurisdictions in Maryland and Virginia.

Overall, 15 percent of the regional product depends on the area's status as an international business center.

The 643 foreign-owned firms injected $11.6 billion into the mix and provided 107,000 jobs, with the Dutch conglomerate Royal Ahold's Giant Foods accounting for 27,000, according to the study released last Wednesday. Exports of goods and services from the area accounted for another $13.7 billion.

Though Washington's stature abroad as the capital of the world's remaining superpower contributes to the internationalization of the area economy, a host of other factors support the trend.

The 200,000 foreign students in the area, the 1.3 visitors from abroad and 171 embassies and international organizations also flesh out the region's connections to overseas.

"The region's international assets facilitate the globalization of the economy," says Peter Nostrand, CEO of SunTrust Bank and chairman of the Greater Washington Initiative.

The initiative, a division of the Board of Trade, markets the entire Washington region to potential investors overseas.

Japanese and British firms dominate the foreign contingent in the Washington area, accounting for 117 and 114, respectively, of the international companies that have put down roots here. But the British presence accounts for 17 percent of the foreign-funded employment in the area, far more than Japan's 7 percent.

The Netherlands punches far above its weight in the area since the acquisition of Giant Foods by Royal Ahold. But Thomas Morr, president of the initiative, points out that Royal Ahold did not originally invest in the creation of the Giant jobs in the area.

"Clearly, Giant Foods was here before and didn't add 27,000 net jobs to the region," Mr. Morr says.

The activities of what the study terms "local-global" companies are responsible for the benefits that accrue from imports and exports. These firms include Life Technologies of Rockville, which is active in 64 countries, more than any other company in the area.

Other major players in this category include Arlington-based AES Corp., Columbia, Md.-based W.R. Grace and Company and the D.C.-based Carlyle Group.

Local firms that do venture overseas tend to head first to Europe, especially Britain, where 66.7 percent of the firms that the initiative surveyed are doing business. Canada is also a popular destination, as is Mexico, two countries intimately linked to the United States by the North American Free Trade Agreement.

The region's technology industry largely mirrored other sectors' international expansion by opening offices overseas, especially in Europe. The initiative did not, however, find strong links with emerging technology centers in Israel and India.

Only 7 percent of internationally active technology firms maintain offices in India, for example.

International students spend money in the area to the tune of $38,830 per person, the group found.




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