It was great to see such a large attendance during both webinar sessions. If you missed the webinar, I will be discussing the main takeaways in this blog, along with the most popular talking points from our discussion.
Firstly, it's safe to say that 2021 was a strong year for FDI. FDI inflows (USDbn) in 2021 experienced a strong rebound and exceeded pre pandemic levels. The 65.3% increase has meant that FDI inflows are higher than pre-pandemic and are now comparable to 2017 levels. But the rebound was highly uneven when looking at inflows based on development groups. Developed economics led the recovery recording 149% growth against the recorded value for 2020, developing economies increased by 31%, while the least developed countries lagged behind at 18%. When looking at the data, it seems that the less developed countries had fewer opportunities for M+A activity in the service sectors which are still being developed in most countries.
According to UNCTAD, In Europe, more than 80% of the increase in flows was due to large swings in conduit economies. Inflows in the US more than doubled, with the increase entirely accounted for by a surge in cross-border mergers and acquisitions (M&As). The global value of cross-border M&A increased by 50% in 2021, with the increase led primarily by developed and developing economies. The boom in cross-border mergers and acquisitions (M&As) is most pronounced in services. The number of deals in information and communication increased by more than 50% to a quarter of the total.
Looking back at 2021 is important for investment promotion agencies so they can review how their location performed, but more importantly to see where they can improve on in 2022. During the Webinar, I asked over 100 IPAs/EDOs how they expect FDI to change in their location in 2022. One of the main takeaways from both sessions was the overall positivity coming from IPAs/EDOs. The majority of attendees believe that their region/city/country's FDI investment will increase by up to 10% in 2022, which is in line with Wavteq's 2022 prediction.
1. Act Now and implement policies to attract investment that will mitigate climate change and spur sustainable economic development.
2. Consider how your location can benefit from remote working and how to attract the new form of virtual and hybrid investors and digital nomads and redesign office space and location assets.
3. Industry 4.0 is creating new opportunities to attract FDI and support your start-up ecosystem – ensure your government supports Industry 4.0.
4. Reshoring to serve Europe and USA and offshoring to new countries is accelerating and your IPA should consider how it can benefit and attract FDI.
5. The world is rapidly opening up to travel and F2F investor meetings again – consolidate all your efforts to provide digital services and virtual investor outreach and focus increasingly on travel again to meet investors (with carbon offset!) - FDI is back and will grow rapidly.
Guillermo Mazier, Wavteq's President of the Americas has identified his five promising tech trends to take advantage of in 2022.