Globalization used to be a word synonymous with advancement and progress. It is now taking on a connotation associated with skepticism and fear. Despite this trend, foreign direct investment continues to be a contributing element of countries’ economies all across the world.
In fact, according to the 2017 A.T. Kearney Foreign Direct Investment Confidence Index Report, 75% of investors believe FDI will be what drives profitability and competitiveness over the next three years.
It seems while political figures have been busy voicing support for isolationistic policies, investors have been plotting paths they can pursue to remain relevant and profitable in a dynamic time for both world economies and geopolitics alike.
The findings of the A.T. Kearney FDI Confidence Index Report of 2017 ranks the United States as number one regarding FDI confidence; a spot the country has claimed for five consecutive years. The three reasons cited for this top ranking position were:
- An extremely positive outlook for the future U.S. economy;
- The attractiveness of the U.S. investment market due to transparency and its efficient legislative and regulatory environment;
- The recent “Make in American” sentiment resulting from political outcomes, causing investors to try and gain a foothold in the U.S. market establishing a local rather than foreign perception within the marketplace.
Germany claims the second place spot on this year’s FDI Confidence Index Rankings. Germany is a top destination for FDI due to their strong economy, high levels of productivity, skilled labor force, excellent infrastructure, and central location within Europe.
They also have seen an increase in foreign investments since the Brexit decision. Both European investors and Chinese investors alike view Germany as a primary market for FDI.
With the recent decision to leave the European Union one would expect that the U.K. would have moved down in the FDI Confidence Rankings for 2017.
However, this year’s report shows the United Kingdom moving up in their ranking when compared to last year.
This upward movement is due in part to the Brexit resolution, creating urgency amongst investors to gain a foothold in the United Kingdom’s financial market before they officially separate from the EU. In addition to Brexit, the U.K.’s historically sizable and wealthy economy, transparent regulations and efficient infrastructure make this nation a desirable destination for FDI.
France moves up one spot within this year’s FDI Confidence Index Report. This increase in rankings is attributed to the strengthening of this nation’s economy, evident through their falling unemployment rates and projected economic growth for 2017 and 2018. Emanuel Macron, the newly elected French President, has also made claims to enact reforms aimed at increasing the economic growth of this country perhaps leading to a further increase of FDI recognized within this nation.
Receiving a ranking of 13 on the 2017 FDI confidence index, Italy has successfully moved up three spots when compared to their last year ranking of 16.
Investors are thought to have increased their activity within this area due in large part to the proactive actions of the Italian government.
Italy’s government recently introduced a variety of reforms aimed directly at increasing foreign investment. This year’s notable upward movement within the rankings of the FDI confidence index suggests such actions may be paying off. Even with this noticeable increase in regards to this year’s rankings, there is still room for improvement concerning the FDI within Italy.
Half of the countries found within the top ten spots of the 2017 FDI Confidence Index are held by countries of the Asia Pacific region.These countries include China, Japan, India, Australia, and Singapore.
Both emerging markets and developed markets within this region are attractive opportunities for FDI from an investor standpoint. The emerging markets, China and India, offer strong economies and vast populations to potential investors.
A final and most important takeaway from this report is the perceived interconnection between business, government, and citizens. We are living in a time where society views private corporations as important drivers of positive economic and social changes.
In fact, 78% of investors think business leaders should publically advocate for policy positions that would improve economic and social outcomes.
In addition to this, 81% believe corporations should work directly with government leaders in developing such legislation. These findings provide evidence that there is an existing opportunity gap for businesses to campaign for social causes and facilitate changes which ultimately better the lives of the communities in which they operate.
While politicians may be voicing support for policies that promoting “turning inwards” in regards to their nation’s global strategy, it is important to remember globalization isn’t the enemy.
To progress forward, one must look past the current rhetoric taking place in the geopolitical realm and recognize countries coming together will lead to a better tomorrow.
Regardless of where a nation may fall on this year’s FDI confidence index, whether they are ranked first or thirteenth, each country has a significant role in the direction of our future.
Fonte: a cura di Exportiamo, di Morgan Caldarera, firstname.lastname@example.org
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