The US was the world’s leading destination for FDI last year, according to the annual IBM Global Location Trends report. China and India ranked second and third, respectively, though Ireland continues to attract investment projects with the highest average value.

US FDI hit another record high in 2014, thanks to locations offering a strong value proposition based on market, talent and cost efficiency. The report singles out Texas, North Carolina, Tennessee, Ohio, Virginia and South Carolina as showing particularly strong results.

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Investment in China’s key investment sectors of tourism, food and automotive fell last year. In contrast, the electronics industry grew considerably, due almost entirely to the vast expansion of Foxconn Technology Group in Shanxi Province. However, a number of factors, notably labour costs, are causing investors to reassess their investment strategies in China.

Overall investment levels increased in India, with significant growth in electronics, financial and business services, metals and life sciences, and relatively less emphasis on ICT and transport equipment.

Ireland ranked first in Europe and fourth globally for the number of jobs created per capita. “Ireland is competing globally to win new FDI business,” said IDA Ireland chief executive Barry O’Leary. “This survey reminds us of the international nature of FDI. We must do everything we can to maintain and improve Ireland’s position in these FDI rankings.”  

The study reports that global supply chains are becoming increasingly complex, particularly in manufacturing, as companies combine reshoring, nearshoring and offshoring strategies. It also found that the emergence of the Internet of Things and changes associated with Industry 4.0 will radically transform the global manufacturing landscape. “These developments will usher in new opportunities for companies to operate complex networks of production, distribution and sales across multiple geographic locations, leveraging the power of data to drive value creation,” said the report.

In particular, this transformation of industries will have significant ramifications for labour markets and corporate skills requirements. The report concludes that, as a result, public sector leaders must improve alignment between supply and demand of skills and prioritise efforts to foster educational programmes that better serve the skills requirements of industries.

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