FDI CEO Outlook 2025: Gareth Hagan, OCO Global
Gareth Hagan is CEO of OCO Global, a technology-enabled advisory firm focused on trade, investment and economic development.
What trends or factors do you think will have the biggest impact on FDI in 2025?
Trump and tariffs, plain and simple. It has the potential to radically alter the shape of FDI in so many ways. First, FDI by its very nature is a global game, where market share trumps (excuse the pun!) market growth. And so, with tariffs having the potential to drive a significant shift towards the US market, the rest of the world will no doubt be impacted. It’s not just about the US itself, but the global ripple effect it creates – we are already seeing immediate responses such as Mexico’s nearshoring decree.
I also expect that Trump’s broader policy shifts will reverberate around the world – with deregulation of industries such as tech changing the shape of investment and projects in that space, a type of modern day ‘space race’ in AI.
I also foresee changes in priorities within energy and sustainable industries – not that these projects are going to go away, but investors will be looking for some level of consistency in policy at a global level to support and re-risk decision-making. That might take some time to become clear.
Do you expect an FDI rebound after the recent challenging years? Why or why not?
My prediction in early January would have been a resounding yes. 2024 was a tumultuous year characterised by half the world going to the polls and we know that historically leads to pent-up demand and a ‘bounce’ on the other side. Other factors, such as declining inflation and decreasing interest rates – hence lowering the cost of capital – were strong foundations for a rebound in 2025.
“The only certain thing is uncertainty. And so, after a challenging decade, things are not going to get any easier for IPAs.”
Gareth Hagan, OCO Global
But eight weeks into the year, and the picture is a lot less clear. With so much geopolitical uncertainty, ongoing brinkmanship on tariffs, and the threat of a US-Europe trade war becoming more, not less likely, it would be a confident investor that would make a major decision at this time.
I can undoubtedly see scenarios where business, currently supported by trade flows, could translate to increased FDI. Equally, I can see instances where friendshoring investments are made between trade allies who are seeking to shift focus and reliance away from areas that now look higher risk. However, I think it will take time for this to settle and become clear and FDI could suffer as a result.
Where do you see the most exciting opportunities, in terms of sectors and geographies?
The most interesting spaces are probably those in between the geopolitics and potential trade wars that are looming.
It has been the case, for the last decade or more, that a surefire way of driving FDI is to create a ‘pull’ of demand by creating opportunities and providing the supporting capital. In that regard, I think the Middle East will continue to be a hotbed of activity. The region’s economic diversification and investment in infrastructure, emerging sectors and technologies shows no signs of slowing down.
I also think the region is well-placed geopolitically and geographically to benefit from a changing world order and is seen as strategically important to all of the main economic powers across the world.
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Asia will continue to be interesting as economies position themselves as an alternative to China, and as China itself looks to build further bridges into the world.
Europe, I feel will need to play a different tune and find a formula that facilitates greater levels of investment within Europe. Ironically, after a decade characterised by Brexit, I think the UK’s position is interesting as it rebuilds its relationship with Europe and is perhaps sheltered from the excesses of a US-Europe trade war.
On geographies, I think the answer at one level is simple, in that technology and innovation will (and always should) be at the heart of any efficiency-seeking FDI project. I also think that, given the trade and tariffs dynamic, we will probably see, over time, a reconfiguring of supply chains and a bounce in traditional manufacturing projects, especially in the US.
What will be the main challenges IPAs face this year, and how can they overcome them?
The only certain thing is uncertainty. And so, after a challenging decade, things are not going to get any easier for IPAs. The things that have always differentiated the best from the rest will continue to be the case – evolving your proposition, understanding and being better than the competition, and having a laser focus on targeting the right investors.
In this environment, more than ever, I’d advocate open and proactive dialogue with investors, much more than what I sometimes see as the painting-by-numbers sales pitches. Realise that this is a challenging and uncertain time for investors, take time to understand their needs and be transparent in how you can work with them to deliver what they require.
If 2025 is to be a leaner year than we might have thought, there will be less to go around and the winning IPAs will be those that speak the investor’s language.
