FOREIGN INVESTMENT BOOMS IN SEATTLE

FOREIGN INVESTMENT BOOMS IN SEATTLE

International investment in Seattle is growing so rapidly that the 10,000 people already working for foreign-owned companies can expect to be joined by thousands of others in the next few years.

That's the view of Keith B. Orton, author of six-month study distributed this week that details how 175 firms - mostly from Japan and Canada - have sunk millions of dollars into Seattle.Mr. Orton, a former college business professor and now a researcher for Seattle's Office of International Affairs, did the study.

Almost half of the 175 international firms in Seattle are engaged in trade or transportation, but those companies created only about 10 percent of the jobs, the six-month study revealed.

Instead, foreign ownership of parent companies for hotels, retail stores and manufacturing firms accounted for 71 percent of the jobs.

The extent to which Seattle has become a part of the international economy is somewhat startling, Mr. Orton said, noting that many of the international jobs are not a direct outgrowth of Puget Sound's role as a shipping and trade center. It's something that has not been fully appreciated.

Until the last few years, direct foreign investment in Washington state remained relatively low compared with that in most other states, he said. There were 90 firms in the city in 1980, the study showed.

In the mid-1980s, however, foreign investment began to grow rapidly.

As the dollar weakened in relation to the Japanese yen and other Asian currencies, a number of companies have found it to their benefit to set up operations in the United States, he said. That trend has helped accelerate international investment in Seattle.

In fact, the study shows the impact of foreign investment to be so great that Seattle currently is developing a campaign to put it into competition with larger international centers such as Los Angeles, San Francisco, Chicago and New York, he said.

By 1990, we expect to add another 50 or 60 foreign firms, he said. We don't have the money that California has (to try to entice foreign firms to establish operations in the state), but we intend to market our advantages.

With property costs that are still modest compared with other international centers, Seattle plans to stress that foreign investment is welcome in a city that the Boeing Co. made technologically sophisticated and the port of Seattle made a cultural crossroads, Mr. Orton said.

Seattle's geographic position halfway between Alaska and California has made it attractive to Canadian firms that do business in those states, and Seattle's position as a convenient layover city for businessmen from Japan, South Korea and Taiwan has led to its discovery by Asians, he said.

We don't ever expect to become a Los Angeles-style mega-city, with 20 million people and an estimated 50 percent of all available downtown office space in foreign ownership, he said. But when it comes to foreign firms that need financial, technical and legal support, Seattle is going to be quite competitive.

But Seattle's Office of International Affairs knows that it may have its job cut out for it in bringing foreign investment to the city, he said.

Seattle works closely with Washington state's Department of Trade, but realizes that some at the state may feel obligated to steer international investment away from the prosperous areas surrounding Puget Sound to communities in the rest of the state, where the economy is weak.

The state may want to put a manufacturing center in the Okanogan Valley (a rural region near the Canadian border), and we tell them, fine, but the brains of the operations are going to be need to be located where the support and professional services are, and that's in Seattle, he said.

Yet there's only so much the city's small international force can do, he said. Seattle must rely on the state for such major efforts.

For example, any effort to convince the Airbus Industrie consortium to investigate sites in Washington state as potential locations for a U.S. manufacturing plant would be left to the state, he said. Airbus is reported to be investigating the feasibility of a Southern California manufacturing plant to provide planes for U.S. airlines.

Once the state gets them to Washington, we show them what we have in Seattle, he said.

Many of the international firms operating in the Puget Sound region are there because they work as subcontractors for the Boeing Co., or arrange financing for international sales of Boeing aircraft or otherwise are engaged in high-technology research.

Mr. Orton said two other large groups of foreign companies handle export of seafood to Asia and forest products to China and Japan.

A survey of 60 of Seattle's international firms showed that most said they had located there to obtain superior access to U.S. customers, though others mentioned quality of life and the availability of skilled labor.

Transportation and trading companies specifically ranked the relative ease of shipping products to customers in other U.S. cities as the most important factor in their decision to move to Seattle.

Fourteen of 16 Seattle transportation companies said they expect significant employment growth in the next five years, a view shared by 14 of 20 international trading companies in Seattle.

Mr. Orton said the study did not attempt to place a dollar figure on the total amount the 175 foreign firms have invested in Seattle, nor how much they generate in taxes.