IBM’s 2012 Global Location Trends report attempts to provide a current view of the world’s “location landscape,” as companies determine where to locate their operations in order to maintain their competitiveness. According to report authors Jacob Dencik and Roel Spee, companies are taking a more strategic approach to optimizing their international operations by reducing risk, while continuing to seek new market opportunities. And these markets — or locations — must ensure that they improve their value propositions for investors by identifying their strengths and addressing their weaknesses.
Fiscal imbalances in Europe, political upheavals in the Middle East, and natural disasters in Asia that have disrupted supply chains are affecting international investment decisions. Companies are looking to optimize their current global operations while preparing for an eventual return to worldwide economic growth.
The United States continues to be the top investor in other parts of the world. However, job creation by foreign investment of U.S.-headquartered countries decreased 7 percent from 2010 to 2011. Japan, Germany, France, and China are the next largest creators of jobs by outward investment. The top ranking countries for jobs created by inward foreign investment are China, India, the United States, Mexico, and the United Kingdom, in that order. However, China and India saw this job creation drop by 15 percent and 21 percent, respectively, from 2010 to 2011. China suffered from a decline in the electronics sector and India from a decline in the business services sector. On the other hand, Mexico (+25 percent) and the UK (+16 percent) both saw an increase in the number of jobs created by inward investment.
Overall inward foreign investment in the United States was stable from 2010 to 2011. According to the report’s authors, U.S. business environments show less differentiation among states and communities than in other parts of the world. Consequently, investing companies often have many candidate locations to choose from, and powerful economic development strategies and marketing tools (such as financial incentives) can strongly impact foreign companies’ location decisions. The top three performing states in attracting jobs through foreign investment in 2011 were South Carolina, Texas, and North Carolina. These were followed by Indiana, Ohio, Georgia, Alabama, California, Mississippi, and Illinois.
IBM’s Global Location Trends report also looks at the types of jobs created globally — not just the number of jobs — for their added value and knowledge intensity. With this in mind, Ireland is the world’s top ranked nation, followed by Singapore, Denmark, Switzerland, and Japan.