The Impact of Automation on Global FDI
After the 2008 financial crisis there was a significant decrease in global trade of manufactured goods. This was seen to be a blip caused by the crash, however levels have failed to recover to pre-recession levels. Cross-border trade in services, such as IT, telecoms, and transport however, are growing.
In the 1980s, 90s, and early 2000s, global trade in manufactured products was characterized by North American and Western European companies offshoring manufacturing to lower-wage countries, such as Southeast Asia and Latin America. Products were manufactured where workers were paid a fraction of their counterparts at home, and then put onto a container and shipped to the consumer markets.
However, the increase in automation on the factory floor has led to a decreased emphasis on high-volume, low cost labor, and more of a focus on a smaller number of higher qualified, better trained workers. This is also allowing companies to produce closer to their end customers, often businesses or consumers in developed markets.
For an economic developer in North America or Western Europe, this leads to increased opportunities to attract investments and jobs back from lower cost countries. Being able to position your region as a hub for advanced engineering training, with a strong workforce and investments in advanced infrastructure (5G networks, AI technology development, a start-up ecosystem, etc.) will give you a strong advantage in landing these kinds of projects in the future.
To listen to some great discourse on this topic, we would recommend listening to this podcast by the McKinsey Global Institute.
ABOUT THE AUTHOR
Paul Brogan is Vice President, Client Services at ROI Research on Investment. Paul joined the ROI team in 2009 and is a recognized thought leader in the field of lead generation and investment attraction for economic development organizations. Having led the strategic development and execution of over 200 global lead generation campaigns, Paul is an expert in target market development, outreach strategies, inbound marketing and lead nurturing. Paul is a highly sought after speaker and writes a regular blog on how FDI is affected by geopolitics, macroeconomics and industry trends. He is an avid runner, listens to too many podcasts, and enjoys dance parties with his daughter.
Interested in finding companies primed for expansion?
We’ll identify potential projects and schedule qualified meetings for you!
As a world leader in investment attraction, ROI Research On Investment combines cutting-edge technology with big data and talented people to help you win. Fill out this form and we will contact you shortly: