Global ED investment: 2005’s winner is….Europe? September 19, 2006Posted by Tom in Economic Development, Research.
IBM, no longer just “the computer company” that we know and love, has a robust site selection group called IBM-Plant Location International (PLI). PLI issues an annual report detailing the past year’s economic development investment trends for services, R&D and manufacturing, and this week they released their 2005 survey of countries receiving investment from multinational companies. The “winner” for this highly-prized level of investment? Europe, with 39 percent of the pie.
Lots of worthwhile nuggets of information in this release, which deserves a full read by any community or economic developer who intends to be a meaningful participant in the global economy. Among the highlights (note the important workforce acknowledgement in the last paragraph of the quote):
Business services ranked as the most popular type of inward investment project, accounting for 20 percent of all global projects, while manufacturing investment decreased globally on average by 20 percent — to some 800 projects per quarter in 2005. Investment in new R&D centers remained fairly stable in 2005 at 200 projects every quarter globally.
For the third consecutive year, China and India combined received more investment projects than the U.S — 1,650 to 1,200 respectively. U.S. headquartered companies remained the largest generators of cross border investments, with 2,800 projects. However, German-based companies took over second place from their Japanese counterparts, 720 to 670 outward investment projects in 2005 respectively.
“Even though mature economies have caught up slightly, the survey illustrates multinational companies can increasingly seek talent pools anywhere in the world,” said Roel Spee, co-leader of IBM-Plant Location International. “Global competition for new jobs and capital investment is increasing continuously; developed and developing regions must continually define and implement new strategies to attract investment. Competitiveness in innovation and technology-driven strategy will play a vital role in creating new economy jobs.”
Beyond that, IBM offers some “Key Recommendations” for economic development agencies to consider, with headers like “Spread the Risk,” “Target Industries” and “Foster Collaboration to Drive Innovation.” In addition, regional highlights of the survey are presented. Following are the North America highlights:
- North America attracted 18 percent of all projects globally in 2005, up from 16 percent in 2004. There was intense competition among U.S. states for inward investment.
- Pennsylvania jumped into first place as the top destination state in terms of investment projects, with 109 projects. In 2004, it did not make the top 10. For manufacturing projects, it moved from third to first place.
- California remained in second place, mainly as a result of services and R&D investment.
- Michigan and California led in R&D projects, with 13 and 11 projects respectively.
I get nervous that great articles like these will disappear in the Internet, so I took the liberty of making a PDF of this release. It is very strong, but brief, reading.