WASHINGTON — With American consumers cutting back in response to the recession, many U.S. companies increasingly are looking outward, toward fast-developing countries like China, India and Brazil.
But instead of seeing those countries primarily as cheap producers of goods to sell to Americans, U.S. corporate leaders see them as potential customers for American products and services.
The trend, which has been under way for several years but has intensified sharply during the recession, could be a source of new jobs and growth. While debt-burdened American households are cutting back, vast numbers of families in these emerging economies are moving into cities and spending like never before to improve their living standards.
The size of those potential markets dwarfs the domestic markets of most of the economically advanced nations. China, India and Brazil have a combined population of more than 2.5 billion people, many of them young and increasingly affluent — in contrast with the aging and far smaller populations of Western Europe, Japan and the United States.
The push overseas is taking place among small American manufacturing companies as well as giant multinational corporations. And it reflects what may be the beginning of a shift in the global economy, a rebalancing in which the world relies less on U.S. consumers and more on consumer spending in places such as China.
What remains unclear, however, is how large the benefit may turn out to be in terms of jobs and investments in the United States.
Many American companies are investing in production and other facilities near the new customers — instead of shipping goods from U.S. facilities to the overseas markets.
Almost no one doubts that Americans will reap some benefits. Stronger U.S. exports certainly will boost the domestic economy, as they have over the past decade.
The implications of this for American employment are substantial.
The trend line may be apparent from GE's annual reports: In 2004, GE had 165,000 employees in the United States and 142,000 elsewhere. By the end of last year that was reversed: 152,000 in the United States and 171,000 outside.
Such statistics underlie the rising overseas investment of U.S. corporations, and it's almost certain to rekindle politically sensitive issues of earlier years — outsourcing, as well as U.S. tax and currency policies and other incentives that are tied to overseas investments, and the repatriation of profits.
A weaker dollar, for example, will help U.S. exports and might encourage American companies to be a little more home-oriented, says Sheldon Engler, a global economics expert and consultant in San Francisco.