Under the spotlight: 2022 Annual Briefing - Global Expansion Intelligence

Available to Economic Development Professionals

Investment intent offers a sneak peek into the future

Drive through any city centre in the developed world and you’ll see neat rows of charging stations popping up in car parks and on curb sides. They are being installed to service the boom in electric cars. Sales of electric vehicles (EV) doubled in 2021. Around 6.6million units quietly rolled off forecourts to bring the total number of EVs on the world’s roads to 16 million. No surprise then to find that EV manufacturers, and those in their supply chains, are upbeat. This is borne out in new research that shows a big upturn in the international expansion plans of EV companies. It is one of several sectors showing a post-pandemic mood of optimism and ambition.

Investment intent is strong

At Wavteq we track cues of investment intent to measure companies’ desire to make overseas investments. In 2021, we recorded more than 4,000 signals from companies across the world. Our research showed an 89 per cent rise in investment plans from EV companies. We found that China, already the world’s largest EV market, is favoured by companies, such as automotive parts makers, that are considering investment opportunities. We also saw Europe has a powerful pull for automakers, with Germany at the head of the pack targeted by 30 per cent of companies polled.

Positive intent from EV manufacturers was part of a wider trend in the last year that made renewable energy a hot topic for cross-border investors. It is the dominant sector for companies planning to invest in North America showing 10X growth in 2021. Cleantech companies are also in expansionist mode and, as well as eyeing the USA, Canada, and Mexico, many last year showed interest in APAC countries.

Digital demand is booming

Digital transformation is another broad category where we found powerful investment signals. Lengthy lockdowns have accelerated digital demand for consumer brands and B2B enterprises. Companies in EdTech, the Internet of Things (IoT), embedded software, medical devices, digital content and marketing, blockchain, and IT consulting services—all key players in the digital economy—gave positive signals in 2021.

For most software and technology services companies, the USA remains the preferred target market for expansion. In Asia, which will be responsible for much of the world’s GDP growth in coming decades, China faces stiff competition from Vietnam, Indonesia, Thailand, and Malaysia. This data supports the idea of international companies seeking supply chain alternatives to China. It is also a sign of the local potential of these other fast-growth Southeast Asian markets.

Software and services eye APAC

Alongside software companies, those in financial services and professional and business services are considering expansion in APAC. In this the world’s most populous region, our research finds that sentiment towards Singapore and Japan as investment decisions are similar, but that intent comes from different places. Europeans such as the Swiss favour Japan while South Asian companies, for example India, like the look of Singapore. APAC is also attracting investment signals from companies in life sciences including biotech, pharmaceuticals, healthcare, and medical devices.

Europe looks outwards

Europe is the most outward-looking region. More than one third (35.4 per cent) of the European companies we polled said they were considering international expansion. The UK is the most ambitious accounting for almost 40 per cent of all investment signals emerging from Europe. In line with its new status outside the EU, and a desire for Indo-Pacific trade, it is looking beyond Europe. Plenty of UK companies have eyes for China with UK companies ranking second for their interest in China. It seems the attraction is not mutual since there we recorded no signals in 2021 from Chinese companies planning to invest in the UK. Plenty of other see the UK as a hot destination with consumer goods, healthcare, biotech, and communications expressing interest. Germany, France, and the Netherlands are scanning international horizons but make a much smaller contribution than the UK. It is Europe’s services businesses that are expanding, particularly in software and IT, financial, and professional services.


There’s still gold in old

For all the talk about, and investment in, renewable energy and new age tech there’s plenty of life left in the so-called ‘old economy’ too. We track across all regions and dozens of sectors.

We found that companies in traditional sectors such as healthcare, agriculture, chemicals, infrastructure, and business and professional services also gave positive signals. There are exciting opportunities in the fusion of old and new. Digital and green transformation of traditional industries holds great promise.

As the world’s population expands to a projected peak of more than 9 billion in the second half of the century, demand for goods and services will continue to surge. For economic as well as environmental reasons, there are benefits to be as close to the source of demand as possible. That’s what motivates the expansion of the companies that our research tracks & curates. 

For a wider spectacle, take a read through our recent '2022: Annual Briefing - Global Expansion Intelligence' on Wavteq Institute.

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