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Foreign companies employ 143,000 Bostonians, says report

Greater Boston, a home away from home for companies such as the Swiss drug maker Novartis and the Dutch conglomerate Philips, ranks among the nation’s leading targets for foreign investment, according to a new study.

Foreign companies employ 143,000 people in Greater Boston, the fifth highest among the top 100 US metropolitan areas, according to the study by the Brookings Institution, a Washington think tank. Over the past two decades, the number of employees working for international firms has nearly doubled from about 75,000.

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The increase has been driven by a rush of acquisitions in the 1990s and continued investment by foreign companies through the next decade. Foreign businesses now employ 6.7 percent of Boston’s private sector workers, compared with 4.2 percent in 1991.

Grocery stores were responsible for the largest share of employment by foreign companies in the United States and in Boston, with 288,000 people across the country and 15,500 in Boston. They work for companies like Aldi, the German supermarket chain that owns Trader Joe’s, and Ahold, the Dutch owner of Stop & Shop.

Computer systems design and drug manufacturing, both major industries in the Boston metropolitan area, were also among the top 10 sectors nationally for foreign investment.

“Jobs in foreign-owned businesses tend to concentrate on the East Coast to a much greater extent than in other parts of the country,” said Nick Marchio, a researcher at the Brookings Institution, who coauthored the study.

He added that European firms — like Sanofi, the French drug company that owns Cambridge-based Genzyme, and Novartis, which has labs in Cambridge — may be more familiar with the business environment of the East Coast because they are closer to it, although their motivations were not the subject of the study.

The study, which Marchio said took eight months to complete, tracked employment from 1991 until 2011. Today, almost 2,700 foreign-owned businesses have a presence in Boston.

The Netherlands is the biggest foreign employer, with its companies accounting for about 15 percent of jobs a foreign firms. The global headquarters for the Dutch conglomerate Philips’s medical device unit, Philips Healthcare, is located in Andover, where the company employs about 2,500. Overall, Philips Healthcare employs about 3,500 in Massachusetts.

“Boston has everything to offer when you want to be a player in fields like life sciences,” said Rob de Vos, the Dutch consul general in New York. He added that Massachusetts was the fourth-most popular American destination for Dutch companies, with institutions like Harvard and MIT serving as powerful magnets for businesses.

Besides tracking the job impact of foreign investment, the report urges policy makers to tap into their existing economic strengths, such as Massachusetts’ life sciences industry, to draw foreign investment to their states and regions. The report also praises Massachusetts for its efforts to draw Israeli companies to the state, noting that Israeli investment in the United States rose 79 percent from 2006 to 2011.

Governor Deval Patrick has led two trade missions to Israel in recent years.

Other New England cities were big draws for foreign investment. The share of Worcester’s private workforce employed at foreign companies rose to 9 percent in 2011 from 5 percent in 1991, the third-largest increase of the 100 cities studied. The city’s electrical power, electrical equipment, and insurance industries have been the biggest draws, the study found.

The Providence metro area, which crosses into Massachusetts, was ranked second by the same measure, with the share of jobs at foreign-owned companies more than doubling over two decades to 7.5 percent.

Jack Newsham can be reached at jack.newsham@globe.com. Follow him on Twitter @TheNewsHam.
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