Foreign Direct Investment among Countries
Movement of Foreign Direct Investment across countries in the world in the last couple of years presents an interesting phenomenon. FDI increased by 5% worldwide in the year 2007. Ireland recorded a drop of 5% in new Foreign Direct Investment projects. The corresponding fall for jobs created was 40%.
As per data released by a global consultancy firm, cross-border FDI flow increased by 5.1% the world over in 2007 and stood at US$947 billion. Estimates put the number of FDI projects announced in 2007 at 11,574.
In Ireland 87 companies announced 98 investment projects in 2007. It was a 5% slid from comparable 2006 figures. Ireland attracted foreign capital investment to the tune of $2.06 billion in 2007.
IT services and Software were the key areas accounting for a lion’s share of the FDI flow into Ireland in 2007. The big players in the field of FDI flow to Ireland in 2007 comprised Royal Bank of Scotland, Wyeth and IBM.
Dublin, Shannon and Cork roped in most of the inward investments in Ireland. In 2007 Ireland recorded a new trend, of high value sectors of the economy registering an increased investment flow.
In 2007 China succeeded in retaining its 2006 ranking as the country in the world, which attracted the highest level of multinational investment. The number of FDI related projects stood at 1,171. The level of investment in 2007 stood at US$90 billion in comparison to the US$116 billion that was registered in 2006. China also recorded substantial job creation in 2007. Out of an estimated 1.2 million jobs created in the Asia-Pacific region, 366,000 were credited to China.
In 2007 USA stood second in terms of number of projects, which stood at 783. It was however placed in the third position in regards to the associated investment value, which stood at US$46.8 billion. In terms of jobs created USA was way back in the sixth position with a figure of 107,141.
As compared to 2006 India slid one place to the third position in terms of projects, which numbered 676. In terms of jobs created India dropped to the second position in 2007 from being the first in 2006. Jobs created stood at 246,361. In comparison to 2006 it was a 45% decline in job creation for the Indian job market in 2007.
UK was at fourth position in terms of number of projects, which were 622 in 2007. In comparison to 2006, 2007 saw a sharp decline in the projected investment value (which stood at US$18.7 billion) and in the number of employment generated (which was 50,000).
The two UK regions accounting for the highest amount of FDI flow in 2007 were South East England and London. They accounted for over 300 projects in that period.
2007 effectively saw UK regaining its hold as knowledge based economy. The emphasis shifted from factors like incentives and low costs to issues like skills, business opportunities, R&D and regulatory environment.
The same kind of trend was reflected by other front ranking Western European nations like Germany and France.
Growth of investment in Europe in 2007 was largely powered by the Eastern European nations and stood at US$291 billion.
In 2007 Russia retained its position as the leading destination in Europe for FDI regarding investment and job creation.
Spain, Poland and Romania were the other European nations, which gave a good performance in 2007 and were enlisted within the top 10 performing nations.
With the global economy facing the brunt of financial instability in 2008, FDI is projected to become an important instrument for fostering global job creation and investment of capital.
The challenge for policy makers in 2008 is to build up a business environment, which is competitive as well as flexible. Economic policies of nations need to be conducive for investment. Side by side they need to possess an efficient regulatory framework for the promotion of market security as well as the disbursement of long run economic benefits among the populace.