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Leveraging international investment opportunities in a global economy.
Foreign direct investment has increased exponentially during the last few decades as the desire for global trade and international influence increases among corporations, and trade barriers fall away. Once the preserve of western conglomerates, FDI is now practised by businesses of all sizes across a wide array of industries.
Figures from the World Bank show how the FDI landscape is unrecognisable today, compared to 50 years ago. In 2016 there was USD1.7 trillion of FDI globally, while in 1970 that figure was just USD10 billion. The number of countries receiving FDI has also increased, with official World Bank figures recording around 80 countries receiving significant FDI during 2016.
Developed western nations are still big recipients of FDI, but emerging markets, particularly in Asia are fast catching up due to their large, rapidly developing populations and more investment friendly outlooks.
In 2016, North America received USD456 billion of FDI, and the European Union USD656 billion, while the Asia Pacific region received USD450 billion. The largest recipient in the Asian region was China which received USD170 billion of investment, as western organisations sought to access the lucrative Chinese market.
Within the European Union, the UK received USD299 billion of FDI in 2016, according to the World Bank, a clear indicator of its status as a gateway to Europe for international businesses. How Brexit will affect this figure remains to be seen, given Germany, the next biggest recipient, welcomed just USD52 billion of investment.
Elsewhere, India received close to USD45 billion of inward investment in 2015, indicating its rapid rise towards becoming a global superpower.