There is a clear premium being placed on countries whose companies are adept at converting innovation into marketable goods and services. A similar premium is accorded to countries most adept at straddling geopolitical struggles, and that can provide investors with an attractive base to produce goods.
Not surprisingly, the profound shifts of recent times — intensifying geopolitical tensions that threaten to split the world into two camps, a trade war with many twists and turns, and transformational technological advances — are setting in motion a reallocation of capital flows.
Overall, the big trends in the world have hurt foreign direct investment (FDI) — investors do not like trade wars or geopolitical frictions. But the trends diverge across countries, investment types and industries: these disparities give us an insight into how capital is being redirected and which countries in our region are gaining and which are lagging.
