The survey, conducted in January covering more than 500 senior executives from leading corporations worldwide, shows that companies are committed to international investment despite mounting uncertainty.

Eighty-eight per cent of respondents in the Kearney 2026 FDI Confidence Index survey said they plan to raise FDI over the next three years, signalling sustained confidence in long-term global opportunities.
Technological and innovation capabilities rank as the key factor influencing where firms choose to invest.
Asia has the largest share of markets on the index for the first time in more than a decade.

The recent escalation of conflict in the Middle East adds a layer of uncertainty to the global investment environment, with the potential to disrupt, delay or redirect FDI flows depending on how risks evolve, it observed.

Technological and innovation capabilities rank as the most important factor influencing where companies choose to invest, surpassing traditional considerations like regulatory efficiency and domestic economic performance.

Investors cite technological innovation as the strongest or tied strongest reason to invest in 10 of the 25 markets on the index, underscoring the growing importance of innovation ecosystems in attracting global capital, a release from the management consulting firm said citing the study.

The United States maintains its position as the world’s most attractive destination for FDI for the 14th consecutive year. Investors continue to cite the country’s technological leadership and economic resilience as key reasons for investing.

However, despite that, investor sentiment has softened, with net optimism about the US market’s three-year economic outlook falling by 17 points compared with last year.

Canada holds the second position for the fourth year in a row and continues to close the gap with the United States. Investors point to Canada’s natural resource base, stable economic fundamentals and growing technology capabilities as key strengths.

Asia shows particularly strong momentum in this year’s rankings. Japan rises to third place, supported by investor confidence in its innovation ecosystem and targeted investment incentives. China climbs to fourth, reflecting the scale of its domestic market and its continued progress in technology development.

More broadly, Asia claims the largest share of markets on the index for the first time in more than a decade. The shift underscores a growing investor focus on markets that combine technological capability, economic growth potential, and geopolitical relevance.

So-called ‘middle power’ economies are also gaining prominence in this year’s results. Singapore posts one of the most notable improvements in the rankings, while South Korea also climbs in the index, reflecting strong investor interest in its technological innovation and advanced industrial capabilities. These markets are viewed as strategic investment hubs, offering growing roles in global supply chains.

China, the United Arab Emirates (UAE) and Saudi Arabia rank as the top three markets on the emerging markets index for the third consecutive year, while Thailand and Malaysia post some of the largest gains in the rankings amid ongoing supply chain diversification.

Several emerging markets—including China, the UAE, Brazil, Mexico, Thailand, Malaysia and India—also appear on the global rankings, highlighting the growing overlap between global and emerging investment destinations.

Investor sentiment toward emerging markets has improved modestly year on year, with investors expressing the strongest optimism about the economic outlook for markets like the United Arab Emirates and Thailand.

The results suggest that more companies are looking beyond traditional investment hubs as they expand supply chains and pursue growth opportunities across a broader set of emerging markets.

Executives remain alert to rising global risks even as investment intentions are strong. Geopolitical tensions rank as the most likely development over the next year (36 per cent), followed by commodity price increases and political instability in developed markets (30 per cent).

At the same time, industrial policy is playing a central role in shaping investment decisions. According to the survey, 84 per cent of investors say industrial policy is extremely or very important in determining where they invest, and 57 per cent believe it has a positive impact on their company’s business performance.

However, nearly nine in 10 investors report at least moderate business risk from competing national industrial policies, underscoring the complexity created by overlapping policy frameworks.

Investors view infrastructure development and tax incentives as the most effective industrial policy tools, with roughly four-fifths saying infrastructure investment is effective in achieving economic and security goals, while enthusiasm for tariffs and export controls is significantly lower.

Fibre2Fashion News Desk (DS)