No country has been a stronger magnet for foreign direct investment than the United States. Roughly 17 percent of the world’s $22 trillion stock of FDI is deployed in the U.S. economy — triple the stock in the next largest destination. With the world’s biggest economy, a skilled workforce, an innovative culture, and deep and broad capital markets, the United States has enormous advantages in the intensifying global competition to attract investment from the world’s best companies.

But those advantages have been eroding. In 1999, the U.S. share of global FDI stood at 39 percent — a full 22 percentage points higher than today — and has been on a continuous down slide ever since. Economic growth, improved labor skills, greater business transparency, and political stability in emerging economies have made them more alluring investment destinations. Meanwhile, burgeoning regulations, policy incongruity, and lingering uncertainty about the business and political climates have reduced America’s appeal.

Positioned as it is at the technological frontier, the U.S. economy requires continuous investment to replenish the machinery, software, laboratories, research centers, and high-end manufacturing facilities that harness its human capital, animate new ideas, create wealth, and raise living standards. Over the years, foreign-headquartered companies have satisfied an important part of those investment requirements, bringing capital, know-how, and fresh ideas, while creating synergies by establishing new enterprises and acquiring existing U.S. firms. These U.S. affiliates of foreign-owned companies — call them “insourcing” companies — have punched well above their weight, contributing disproportionately to U.S. output, compensation, capital investment, productivity, exports, research and development spending, and other determinants of growth.

As reported in a new study published by the Organization for International Investment, insourcing companies represent less than 0.5 percent of U.S. companies with payrolls, yet they account for 5.9 percent of private-sector value added; 5.4 percent of private-sector employment; 11.7 percent of new private-sector, non-residential capital investment, and; 15.2 percent of private-sector research and development spending. They pay 13.8 percent of all corporate taxes; earn 48.7 percent more revenue from their fixed capital than the U.S. private sector average, and; compensate their employees at a premium of 22.0 percent above the U.S. private-sector average.

Competitive jolts to established domestic firms, technology spillovers, and the hybridization and evolution of ideas also result from the infusion of foreign direct investment. One can only wonder whether the Detroit automakers would still be producing the likes of the Ford Pinto, the AMC Pacer, and the Chrysler K‑Car had foreign nameplate producers not begun investing in the United States in the early 1980s, helping to reinvigorate a domestic industry that had fallen asleep at the wheel. The competition inspired the Big Three to improve quality and selection, and subsequent technology sharing within the industry has benefitted producers and consumers alike. No wonder policymakers are abuzz about attracting more insourcing companies to U.S. shores.

This week the U.S. Commerce Department is hosting the first-ever Select USA Investment Summit, which aims to showcase the benefits of investing in the U.S. economy. Marketing U.S. advantages to potential investors is fair play in this intensifying global competition to attract and retain strong companies, but the product should really sell itself.

Companies looking to build or buy production facilities, research centers, and biotechnology laboratories consider a multitude of factors, including access to skilled workers and essential material inputs; ease of customs procedures; the reliability of transportation infrastructure; legal and business transparency, and; the burdens of regulatory compliance and taxes, to name some.

According to several reputable business-perception indices, the United States has slipped considerably over the past decade in a variety of areas that directly impact investment decisions. Out of 142 countries assessed in the World Economic Forum’s Global Competitiveness Index, the United States ranks 24th on the quality of total infrastructure; 50th on perceptions that crony capitalism is a problem; 58th on the burden of government regulations; 58th on customs procedures; 63rd on the extent and effect of taxation. Meanwhile, uncertainty over energy, immigration, trade, tax, and regulatory policies continues to deter investment and even encourages companies to offshore operations that might otherwise be performed in the United States.

The Global Investment in American Jobs Act, which was passed by the House last month, would direct the Commerce Department to conduct an interagency review of federal policies to identify ways to improve U.S. capacity to attract foreign direct investment. A proper review, followed by reforms to remove investment deterrents, could help reverse the downward trend of the past decade and provide new fuel for economic growth and higher living standards going forward.