Continued optimism in the face of instability - Business leaders show signs of greater optimism in the investment outlook and the prospects for artificial intelligence over the next three years—though concerns about risks persist.
Results suggest investor optimism is high and has the potential to grow even more in the next three years … A striking 88 percent said they were planning to increase their #FDI in the next three years—6 percent more than last year. Furthermore, 89 percent—up from 86 percent in 2023—said they regarded FDI as more important to their corporate profitability and competitiveness in the next three years. And the level of net optimism on the global economy rose markedly as well. While the optimism level grew only marginally to 64 percent, net pessimism decreased notably from 35 to 29 percent compared with last year.
Investors deprioritize transparency of government regulations and tax rates in favor of regulatory efficiency and ease of moving capital in making investment decisions
While technological and innovation capabilities remain a top priority for investors when choosing FDI destinations (up one rank from last year), regulatory efficiency and ease of capital movement rise to the second and third positions, respectively (see figure 6). This is perhaps an indication that growing protectionism and a push to self-sufficiency post-pandemic is making foreign investment into some markets more difficult. As a result, nearshoring investment to improve efficiency and ease of capital movement could be on investors’ minds.
About the study
The Kearney FDI Confidence Index® is an annual survey of global business executives that ranks markets that are likely to attract the most investment in the next three years. In contrast to other backward-looking data on FDI flows, the FDICI provides a unique forward-looking analysis of the markets that investors intend to target for FDI in the coming years. Since the FDICI’s inception in 1998, the markets ranked on the Index have tracked closely with the top destinations for actual FDI flows in subsequent years.
The 2024 Kearney FDI Confidence Index® is constructed using primary data from a proprietary survey of senior executives of the world’s leading corporations. The survey was conducted in January 2024. Respondents include C-level executives and regional and business leaders. All participating companies have annual revenues of $500 million or more. The companies are headquartered in 30 countries and span all sectors. Service-sector firms account for 46 percent of respondents, industrial firms for 45 percent, and IT firms for 9 percent.