Competition for Global FDI Inflow is Increasing

“As companies expand their scope of international activities, it means that competition between locations becomes more intense.” IBM Global Business Services, Global Location Trends Annual Report, October 2008

IBM is an amazing company. In addition to their traditional line of business solution products, IBM also has some of the best and brightest minds in the world employed in the IBM Global Business Services. Every year, the team publishes a report that tracks global corporate investment at the project level.

The 2008 Report makes a good case for locations in the United States to become more competitive for foreign direct investment inflow as a strategy for accelerating economic prosperity.

• “Substantial but reduced level of overall foreign investment activity … 2007 saw a decrease in the number of projects and jobs created compared to 2006.”
• “Despite the slowdown of investment in Asia, China and India continue to be the two top locations for foreign investment measured by jobs created.”
• “Though much media attention is paid to Indian and Chinese acquisitions of foreign companies, our findings indicate that they are also actively expanding through Greenfield and expansion investments around the world.”
• “US states may be facing increasing competition from improving near-shore alternatives, such as Mexico, that are now suitable locations for investments in a number of sectors, notably transport equipment.”
• “As companies extend their scope of international activities, it means that competition between locations becomes more intense.”
• “A primary task for policy makers operating in this environment is thus to ensure that their business environments are competitive in every way and attractive to foreign investors.”

Place branding is a strategic approach to managing the competitiveness of your location for an increased share of global capital investment. Understanding how your location is “seen” by foreign investors is key to developing forward looking plans to more effectively compete by offering a superior value proposition.

Take a few minutes to read the IBM Global Business Services Report, and to check out the other reports like Economic Development in a Rubik’s Cube World: How to turn global trends into local prosperity.

The information is both relevant and thought provoking. I am confident you will find it worth your time.

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