FDI Flows Hold Firm As Tech, Policy Shape Investment Trends: Kearney
Kearney has released its 2026 Foreign Direct Investment Confidence Index (FDICI), highlighting a resilient yet increasingly selective global investment environment shaped by geopolitical tensions, industrial policy expansion and rapid technological competition.
Based on a January 2026 survey of over 500 senior executives worldwide, the report finds that 88% of companies plan to increase foreign direct investment over the next three years, signalling sustained long-term confidence despite rising uncertainty, including ongoing tensions in West Asia that could disrupt or redirect capital flows.
The report notes a clear shift in investment priorities, with technological and innovation capabilities emerging as the most influential factors in determining investment destinations, overtaking traditional metrics such as regulatory efficiency and economic performance. Markets with strong ecosystems in artificial intelligence, digital infrastructure and data-driven technologies are increasingly attracting global capital.
The United States retains its position as the world’s top FDI destination for the 14th consecutive year, supported by its technological leadership and economic resilience, although investor optimism around its three-year outlook has moderated. Canada remains second, followed by Japan in third and China in fourth, reflecting Asia’s growing prominence in global investment flows.
Asia accounts for the largest share of markets on the Index for the first time in over a decade, underlining investor preference for regions combining innovation, growth potential and geopolitical relevance. Middle-power economies such as Singapore and South Korea have also gained traction as strategic hubs within global supply chains.
Among emerging markets, China, United Arab Emirates and Saudi Arabia continue to lead the rankings, while countries like Thailand and Malaysia have recorded notable gains amid supply chain diversification. Several emerging economies, including India, also feature in the global rankings, highlighting the increasing overlap between developed and emerging investment destinations.
The report further underscores the growing influence of industrial policy, with 84% of investors considering it a critical factor in decision-making. While infrastructure development and tax incentives are viewed as the most effective tools, nearly 90% of respondents flagged risks arising from competing national policies.
Overall, the findings suggest that while global FDI flows remain robust, investment strategies are becoming more nuanced, with companies placing greater emphasis on innovation capacity, policy frameworks and geopolitical stability when allocating capital.
