The new focus for FDI in 2026 is on value over volume
There are numerous shifts taking place in foreign direct investment (FDI) that will remain prominent in 2026, but as global FDI flows remain modest, the market has decisively moved from volume to value.
Across our FDI Outlook contributors, the message is remarkably consistent. FDI is no longer driven primarily by cost arbitrage. Instead, resilience, innovation capacity and ecosystem strength are shaping location decisions. Investors are prioritising jurisdictions that combine regulatory clarity, advanced infrastructure, skilled talent and access to innovation networks.
Geopolitical uncertainty remains the ever-present backdrop. Trade realignments, tariffs, supply chain reconfiguration and the recalibration of transatlantic relationships are extending decision cycles and raising compliance complexity. Yet paradoxically, many experts report cautious optimism. After several years of hesitation, long-term projects are finally getting the green light. Companies recognise that transformation – digital, industrial and environmental – cannot be deferred indefinitely.
Energy security
Sustainability continues to anchor investment strategies. Clean energy infrastructure, battery production, hydrogen, carbon capture and circular economy initiatives remain magnets for capital. But this is no longer simply about climate commitments; it is about energy security, predictable operating costs and long-term competitiveness. Investors are seeking locations capable of delivering ‘bankable’ green transition projects – supported by reliable grids, long-term contracting frameworks and policy continuity.
At the same time, AI diffusion and advanced digitalisation are reshaping the geography of investment. Data centres, semiconductors, robotics, quantum technologies and life sciences are emerging as cornerstone sectors. Investors increasingly favour locations capable of offering dense innovation clusters: places where startups, corporates, research institutions and public actors operate in proximity, accelerating knowledge spillovers and shortening time to market. In this environment, ecosystem density is becoming as important as tax incentives.
A second theme is speed. Contributors repeatedly highlight the importance of time-to-land, execution efficiency and seamless investor journeys. Locations that combine regulatory predictability with administrative agility will hold a decisive edge.
Nearshoring advantages
Regional patterns reflect this recalibration. Developed economies continue to attract large-scale projects. But Southern Europe, Central and Eastern Europe and agile smaller markets are positioning themselves effectively by emphasising nearshoring advantages, competitive talent pools and reform-driven responsiveness. Investors are increasingly willing to look beyond traditional scale, valuing flexibility, proximity to key markets and credible long-term strategies.
What worries investors most? Regulatory fragmentation, policy volatility and infrastructure constraints — particularly grid capacity for high-compute and energy-intensive projects. Talent shortages and the risk of short-termism in public policy also loom large. In a competitive landscape, inconsistency can undermine even the most generous incentive regimes.
Yet the optimism expressed by many contributors is grounded in the fact that businesses still need growth, efficiency and secure market access. Capital remains available for the right projects. Where public vision aligns with private investment — around innovation, sustainability and competitiveness — momentum can be built or maintained even in a challenging global dynamic.
For investment promotion agencies, 2026 is a decisive year. The era of broad-brush promotion is over. Agencies must become precision strategists: identifying high-value sectors, aligning with national industrial policy, anticipating investor concerns and articulating a coherent long-term proposition. Those that can demonstrate ecosystem strength, provide clarity in an uncertain world and deliver end-to-end support will stand out as trusted partners.
Courtney Fingar is the founding partner of Fingar Direct Investment and a contributing editor to Real Asset Insight.
