The latest figures released by fDi Markets show that FDI figures dropped slightly in the first five months of 2009 compared with the same period in 2008.

Although FDI project numbers fell by a mere 2%, both capital investment and the number of jobs created fell dramatically, by 26% and 28%, respectively. This is to be expected as firms continue to expand and evolve in order to ride out the harsh market while implementing cost-cutting activities.

fDi Markets recorded 6351 FDI projects, involving a combined investment of $441.3bn and the creation of an estimated 1.17 million jobs in the first five months of the year. Emerging markets such as Brazil, China and India have attracted one-third of these FDI projects.

Since January 2003, emerging markets have attracted 37% of global FDI projects, 40% of capital investment and 52% of all jobs created by FDI. Although these countries have attracted a large proportion of global FDI, their stronghold is slipping slightly. In 2003, FDI into emerging markets equated to 43% of global FDI projects, yet the latest figures released indicate that between January and May this year, only 30% of these projects were set up in emerging countries, a 13% loss of market share.

By the numbers

Between January 2003 and May 2009, emerging markets have attracted 28,954 FDI projects, involving a capital investment of $25,000bn and resulting in the creation of an estimated 9.5 million jobs. Over this period, India and China, success stories of this generation, attracted 46% of all FDI into emerging countries. Not only have both of these countries attracted a large proportion of global FDI (17%) but they are placed in the top 20 source countries for global FDI, ranking 12th and 16th, respectively.

US companies have accounted for 26% of all FDI into emerging markets since January 2003. They are followed by Japan, Germany and the UK. Together, these countries represented 53% of all FDI projects into emerging markets, indicating a classic case of FDI flowing from more developed countries to less developed countries.

Software and IT, financial services and business services are the most popular type of FDI into emerging markets, together accounting for one-fifth of all projects. The coal, oil and natural gas, real estate and metals sectors accounted for the majority of capital investment into emerging markets (37%), whereas real estate, automotive original equipment manufacturers and food and tobacco are the top sectors in terms of job creation (29%).

The most active companies that have set up in emerging markets include Toyota, with 160 projects. However, Elpida has invested the most capital, at $27.5bn, with most of this investment occurring in 2007. Ikea has created the most jobs in emerging markets, creating 125,000 since January 2003.

The top motive for companies investing in emerging markets was domestic growth potential, as stated for 36% of projects. With countries such as China experiencing large increases in per-capita consumption, many companies want to tap into this growing consumer market.

Only 8% of companies state that the reason they have set up in emerging markets is due to lower costs.

Dr Henry Loewendahl is product director for fDi Intelligence.

Email: henry.loewendahl@ft.com