London tops as the most attractive city for foreign direct investments globally

An IBM Global Business report has placed London as the globally preferred destination for foreign direct investments. The report means London continues to be the world’s top destination city measured by number of projects, the BRIC countries (Brazil-Russia-India-China) are represented by 8 of the world’s top 20 cities, 5 being in India.

The report further indicated that the UK was one of the major recipients of foreign direct investment from emerging countries such as India outside of Asia. Indian investment abroad has so far been heavily concentrated in the ICT and business services sectors, with the former accounting for almost half of the jobs created by Indian investors overseas in the last four years.

These investments have gone to other Asian countries, such as China and Malaysia, while investment activity outside of Asia has been concentrated in the Anglo-Saxon countries, with the US, UK and Australia the main recipients.

Despite the fact that the US as a whole is the leading country for foreign investment, it is represented by only 3 metropolitan areas in the top city ranking, with New York as the leading destination. At the level of cities, it is clear that the metropolitan areas in emerging countries are becoming ever more important destinations for investment. This is explained largely by investors having a wide choice of very competitive business locations among the many metropolitan areas in the US.

Overall, direct investment in foreign countries and the consequent job creation continued its decline, with signs that investment began picking up in the second half of the year. What may be even more notable than the positive direction of this trend, and more indicative of the transformative forces that are reshaping markets, regions and organizations, can be found in the nature of the investments organizations are making, said the report.

The global market for foreign investment has been through a roller coaster ride in recent years, with steady increases until end of 2007, followed by significant declines in subsequent years. This decline continued in 2009, with total jobs created at more than 45% below their peak in 2006. The number of jobs created from foreign investment in 2009 dropped by over 20% from 2008, to a total of some 680,000 jobs.

The trend from 2008, when fewer job-intensive projects were announced as a result of the crisis, therefore continued for 2009 as a whole. However, an increase in these large projects was observed toward the end of the year.

30 Dec 2010.