The 2013/02/04 at 09:04
Marie Luginsland, in Germany
Good news. France is drawing foreign investors whose interest in the country is even on the rise. Measured in terms of job numbers, foreign direct investments (FDI) underwent an 18.7 % rise between 2010 and 2011 in France. This growth rate is higher than that of Great Britain (16.2 %), but nothing compared to that of Spain (over 190 %) or even that of Germany (over 77 %). These figures, taken from IBM’s 2012 Global Location Trends report, present a surprising assessment of how companies are investing all over the globe today.
The “origin countries” to progress the most are not – contrary to what may be generally believed – emerging countries. The latter are in fact losing speed in the global context where company investments are tending to shrink. In this way, the BRIC countries (Brazil, Russia, India and China), but also the Philippines, Malaysia and Thailand are the first to be affected by the 8 % global drop in investments recorded in 2011 on the world scale. As the report points out, in this context of crisis, “companies are taking a more cautious approach to investment”.
Paris at the fore
Yet when companies decide to set up overseas, it is on the Old Continent that they focus, presumably to “get closer to their consumers and their sales partners,” notes Roel Spee, Global Leader at IBM-Plant location International, one of the authors of the report. As a result, amongst the countries to benefit from this tendency, France is doing very well indeed. In 2011, it counted 24,545 new jobs stemming directly from foreign investments on its soil. Almost as many as in Germany, and more than in Spain, which nevertheless climbed from 7,515 jobs created in 2010 to 21,820 one year later. Great Britain remains the most attractive European country with over 43,930 jobs created by foreign firms in 2011.
Job creation is the unit of measurement used by IBM in this survey. But the group also goes further. Considering that as far as economic development goes, the number of jobs created should not be the sole factor, IBM introduces the type of investment and its value for the economy as new criteria. In this way, IBM-Plant Location International has developed a foreign direct investment value indicator assigning value to every investment project depending on the sector and the type of business activity. From this vantage point, mature economies including many European countries come out as winners.
As far as cities go, London and Paris are genuine magnets for foreign investments. Both European metropolises come out at the top of the ranking of the world’s most attractive cities. The global number two, Paris, received, in 2011, 10 % more foreign companies setting up (and generating over ten jobs) than one year previously. Rising three spots up the ranking in the space of twelve months, the City of Light witnessed the creation, for 2011 alone, 150,000 jobs from these new investments. Just ahead of Paris, London attracted double the number of new investors over one year.
Decline of the BRICs
Prancing ahead of the rest, these two cities have beaten their European counterparts Amsterdam, Madrid, and Barcelona, which nevertheless have made fine progress. Mention can also be made of Düsseldorf which, in 2011, benefited from three times more foreign job creations than in 2010, thanks to the arrival of the Chinese Huawei and ZTE.
On the other hand, foreign investments have diminished in Shanghai, Beijing, Bangalore, Bucharest and Singapore. “Several emerging-market countries experienced declines,” notes the survey, reflected by “drops in overall number of jobs created from foreign investment”. While China remains the country favoured by investors, it suffers from a – relative – fall in popularity, with a 15 % decline in foreign job creations between 2010 and 2011, to 111,153 new jobs. In some cases however, the rise of a metropolis such as Sao Paulo, the world’s number eight in FDI, or Bangkok, ranked number nineteen, hides the fall of their respective countries. An observation prompting IBM to come up with a hypothesis: “cities are increasingly in a position to shape their own economic destinies”.