Restart: Ernst & Young's 2011 European Attractiveness Survey

Overview

The world has a growing number of important spheres of economic influence.

The European Union's share of foreign direct investment (FDI) inflows (26pc, first place) now equals its share of world GDP. Its recovery, however, remains mixed and tentative.

In 2010, emerging markets collectively reaped more than half of global inward FDI for the first time, although their performance was mixed: while the value of FDI into Brazil grew 16.3pc on the back of commodities and consumption, capital inward investment in India fell 31.5pc, slowed by strong internal competition for investments projects. Growth of FDI in China was sustained because investors there are benefiting from stable returns on investment (ROI).

When considering where to invest in 2010, companies view transport and logistics infrastructure (63pc), telecommunications infrastructure (62pc) and stability and transparency of the political, legal and regulatory environment (62pc) as the most critical factors.

FDI in Europe: Europe's true market value

In 2010, the number of European FDI projects (3,757) rose 14pc year on year and 137,337 new jobs were created by FDI in Europe, up 10pc from 2009. This marks a clear recovery of international investment in Europe's 43 countries.

The UK and France remain FDI leaders in Europe, but they are losing market share to countries such as Germany and a host of smaller more cost-competitive countries, for example, Poland, Hungary and the Baltics. The greatest number of projects in Europe come from business services, software, machinery and automotive. Most jobs are created by business services and automotive. The United States, Germany and the UK remain the leading source countries for FDI projects in Europe. China and India provide 6pc of all FDI projects in Europe, unchanged year on year, but fewer of the new jobs.

In 2011, the number of companies looking to invest in Europe rose 5pc, and the number of investors without investment plans for Europe fell 6pc. Overall, 33pc will invest in Europe this year and, of these, 44pc are expanding facilities.