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Consultants from IBM Plant Location International - Global
Location Strategies - presented their latest research about global
investment trends at an IEDC
session sponsored by fDi magazine on Sept 17, 2007. This updated
their annual research of this nature. This indicated
20% growth in new jobs created worldwide by foreign direct investment
projects during 2006. The related IBM press release of September 18 is
repeated below for reference. |
The original IBM press release as repeated below is at
http://www-03.ibm.com/press/us/en/pressrelease/22322.wss
Speaker bios and contact details
from the fDi session at IEDC
See also
related links below in fDi magazine and on our websites |
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IBM Annual Study: Jobs Created by Foreign Investment Grow
More Than 20 Percent Worldwide Mature Economies
Attract Record Levels of Inward Investment Projects; Corporations Invest in
Increasing Number of Emerging Markets |
Media contact information from
www.IBM.com for this press release
Linda Hanson
IBM Media Relations
914-766-2015
Refer to the original IBM press release as above for her e-mail |
ARMONK, NY - 18 Sep 2007: IBM's (NYSE: IBM) annual
study of countries receiving investment from multinational companies in the
area of manufacturing, services and R&D reveals that the U.S., which
increased its share of inward investment projects from 7 percent in 2005 to
11 percent in 2006, was the top ranking destination country for inward
investment projects. Multiple European countries (the UK and France
leading), also had record numbers of projects as worldwide investment
activity grew by more than 20 percent in terms of jobs created.
The study by IBM's PLI-Global Location Strategies service also reveals that
the top 15 inward investment locations in 2006 accounted for 73 percent of
jobs, as opposed to 85 percent in 2005, which indicates corporations are
widening their search for investment opportunities. Indonesia, Kazakhstan,
Pakistan and Vietnam, for example, are among a growing number of emerging
market countries selected for new investments.
According to the report's authors, the increase in
investment projects has in part been buoyed by the strength of corporate
performance in traditional source economies, such as Japan, the U.S. and
Western Europe. The study's results also reveal a broadening source of
investment. For example India and China, which ranked number one and two
respectively in terms of number of jobs created by inward investment, also
are emerging as important sources of outbound investment as companies in
those countries enter into new markets in other geographic regions. Both
countries are now in the top 15 ranking of source countries for outbound
investment, which is led by the U.S., Japan and Germany.
"Taken as a whole, these findings are indicative of global location
investment activity in 2006 being predominantly driven by optimism and a
search for new market opportunities, rather than by cost reductions," said
Roel Spee, Co-Global Leader, IBM PLI-Global Location Strategies service.
Manufacturing jobs created by inward investments totaled 900,000 around the
world, while services jobs totaled 330,000, and R&D accounted for 100,000.
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Manufacturing
India and China continue to lead in the total number of new manufacturing
jobs created through inbound corporate location investments, however Vietnam
has risen at a rapid clip. While India rose to first place in terms of
manufacturing jobs created (126,000), displacing China, Vietnam doubled its
performance of the previous year, tying China with 100,000 jobs. Mexico and
Eastern European countries also have a strong focus on manufacturing jobs.
India was particularly successful in the ICT and Transportation Equipment
industries, whereas China's and Vietnam's manufacturing jobs were mostly in
Electronics. Mexico and Eastern Europe scored higher than average on
Transportation Equipment jobs.
Services
On the services front, India and the Philippines dominate the global shared
services activity, with 32 percent and 16 percent of such jobs respectively.
Brazil also is a strong regional shared services location. New headquarters
locations on the other hand are located mostly in traditional regional hubs
(U.S.A., the UK, Netherlands, Singapore) and in growing markets (China,
Mexico).
R&D
While India and China dominate the global ranking in terms of R&D jobs
created through inward investment with 54 percent and 12 percent
respectively, other emerging economies such as Romania and Vietnam
increasingly are viewed as attractive locations for R&D investment. The
authors note that although companies have traditionally been cautious about
globalizing R&D activity, firms increasingly are looking for opportunities
to expand R&D activities in other countries to exploit talent pools
available across the world. Singapore, Israel and Ireland, for example, all
ranked high in attracting new R&D jobs in relation to their populations.
"As global companies continue to seek ways to optimize their operating
models, they are increasingly establishing individual business components in
locations that offer the best quality match for a specific unit". "The
strong showing of emerging markets in this year's study and the momentum of
mature economies attracting high numbers of projects reflect the ongoing
evolution of the globally integrated enterprise as a business model."
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Key recommendations
For multinational corporate location investors:
 | With more locations to choose from the choices are not
getting easier. |
| Companies must be prepared to tackle the issues
associated with locating in a very successful 'hot spot,' where a skilled
workforce can get scarce quickly and salary inflation may increase
surprisingly fast. |
For countries/economic development agencies seeking
investment:
| Continuously assess and market the location's benefits.
Assess which new industries are showing strong investment potential and
whether their region is attractive. |
| Precisely define their unique value propositions to
investors and promote their locations more professionally. |
| Supplement their generalist staff with industry
experts, and seek stronger involvement from the private sector in economic
development strategies. |
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Looking ahead:
| The emerging importance of corporate social
responsibility (including labor practices, environmental policy, energy
consumption, and supply chain management) is a new decision criteria and
imperative for investors, multinationals and communities alike.
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| For potential locations, this means activities such as
having environmental policies that are attractive to business, and being
able to develop and offer progressive workforce partnerships with
businesses.
Issues linked to corporate social responsibility will be of particular
importance for emerging markets where infrastructure is less developed. |
| For a multinational committed to standard supply chain
practices globally, underdeveloped local labor or environmental policies
may delay or divert investment dollars. |
| The IBM Global Location Trends report is published
annually by IBM PLI- Global Location Strategies, a specialized unit within
IBM Global Business Services that focuses on global location strategies
for companies as well as economic development services for governmental
organizations. |
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Methodology: The Global
Location Trends 2006 report is derived from the IBM Global Investment
Locations Database (GILD), which is a unique database of IBM's PLI-Global
Location Strategies unit. The GILD records investment project announcements
around the world on an ongoing basis, with the objective to monitor the
location decisions that corporate executives are making. It monitors
corporate investments at the project level. GILD records announcements of
new and expansion projects by companies globally. Mergers & Acquisitions and
other forms of investment are not included, unless they lead to a new or
expansion project.
IBM uses GILD to inform corporate investor clients where recent investment
is going, and as such provides key input for identifying location options.
GILD allows very detailed analysis of recent investment trends by geography,
sub-sector and activity -- identifying a location's market share in
attracting cross border investment, monitoring target countries, and so
forth. |
For more information, visit
www.ibm.com . |
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Related articles in fDi magazine |
Related content on our websites |
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June 2005 - article about
ICT sector investment trends reflecting IBM-PLI research with quotes
from Roel Spee February 2005 - article about
ICT sector trends
August 2004 - Roel Spee quoted in an article about trends
in European
shared services centers
June 2004 - Roel Spee quoted in an article about
quality of life issues and the relocation of key employees in business
location decisions
April 2004 - Roel Spee quoted in article about
"aftercare" services as investment promotion agencies improve their
business relationships after their traditional focus on the attraction of
new companies.
June 2003 - Location strategy
consultant roundtable interview included comments by Roel Spee on
several issues
February 2003 - commentary by Roel Spee about
2002 GILD research results in an article about European investment
promotion agencies
October 2002 - news about the recent
acquisition of Plant Location International by IBM along with the global
consulting practice of PricewaterhouseCoopers
October 2002 - quoted in article about
ICT investment trends
August 2002 - participation in location
consultant roundtable |
Biographic Profile for Roel Spee of IBM-Plant Location International,
based in Brussels, Belgium
Profile of IBM - Plant Location International, including disclosure of a
prior working relationship for US sales and investment project referrals.
Some of this information has not been updated recently.
Directory of business location selection consultants - global location
strategy, site selection, incentives negotiation
Invest in
Europe directory of economic development agencies
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