FDI Trends for 2024
FDI Trends for 2024
Mackenzie Mosey of ResearchFDI is looking closely at Foreign Direct Investment (FDI) trends that are expected this year. Here are some of the shifts to keep an eye on.
Manufacturing
U.S. industrial policy and government incentives shaped global investment decisions in 2023 and are expected to continue to have an impact in 2024. The beginning of a potential manufacturing boom is underway, one driven by computer, electronics, and electrical manufacturing. Since 2022, $224 billion in cleantech and semiconductor manufacturing projects have been announced in the U.S. South Korean and European firms are leading inward investment in this sector.
Renewable and Alternative Power
Environmental concerns have been a key topic globally in recent years, so there is a push to attract companies that are publicly working toward contributing to a greener future. The increase in renewable and alternative power is not expected to let up, rather 2024 will see more public pressure placed on governments to prioritize attracting green companies.
Biopharmaceutical and Life Sciences
The U.S. is the largest market for biopharmaceuticals, accounting for around a third of the global market, and is the world leader in biopharmaceutical R&D. As developing more effective vaccines and treatments for COVID-19 is no longer a priority, companies will prioritize innovation. AI and digitization are expected to transform these fields.
Electronics
Growth in electronics FDI has soared in recent years. The growth has been driven by an increased demand for batteries, particularly for electric vehicles and semiconductors. This sector is expected to continue to grow in 2024, and the U.S. will remain a top player, especially due to recent incentives given for manufacturing.
Shifts in Outward FDI
Outbound FDI trends will continue in 2024. Due to escalating tensions between the U.S. and China, American companies are moving their operations away from China. This shift in outward FDI has led to an increase in projects and investments in growth markets – particularly Mexico.
Upcoming Global Elections
This year, 2024, will be one of the biggest election years in recent history, with 40 major elections scheduled to occur. This could lead to a complete transformation of the geopolitical landscape. This, alongside current geopolitical unrest, may pose challenges to FDI flows.
To learn more about what’s coming in 2024, visit Unveiling the Top Sectors Attracting FDI in 2024 - ResearchFDI