2017 World Investment Report with the latest FDI data and investment policy trends

This year’s special theme (and the sub-title of the Report) is Investment and the Digital Economy. The Report investigates the impact of digital technologies on international production trends. Highlights include:

• Between 2010 and 2015, the number of tech companies in UNCTAD’s ranking of the top 100 MNEs more than doubled. The assets of these MNEs increased by 65 per cent and their operating revenues and employees by about 30 per cent, against flat trends for other top 100 MNEs. 
• The importance of digital MNEs – including internet platforms, e-commerce and digital content firms – is also growing rapidly. WIR17 presents a new top 100, ranking digital MNEs and their international production footprint. 
• Digital MNEs make about 70 per cent of their sales abroad with only 40 per cent of their assets based outside their home countries, compared to balanced international footprints of other MNEs. The impact of digital MNEs on host countries is less directly visible in physical investment and job creation, but their investments can have important indirect and productivity effects.
• The adoption of digital technologies in global supply chains across all industries will have profound effects on international production. Depending on industry- and MNE-specific preferences, it can lead to fewer large investments in centralized, “big-data-enabled” production, but also to nimbler, distributed, “3D printing” production. 
• Analogue-era investment rules and regulations, and policies and institutions for the promotion and facilitation of investment, may need to be reviewed to avoid that they become obsolete or an unintended drag on digital adoption. Of the top 10 traditional industries most affected by digitalization, 5 coincide with the top 10 industries in which countries maintain investment restrictions. 

The Report also looks at the investment dimension in digital development strategies, through a survey of the national strategies of more than 100 countries. Some key findings:

• Many digital development strategies fail to address investment or discuss investment needs only at a very general level. Less than 25 per cent contain details on investment requirements for infrastructure, and less than 5 per cent on investment needs beyond infrastructure, including for the development of digital industries. 
• A comprehensive digital development strategy should cover not only investment in digital infrastructure, but also in digital industries and in digital adoption by firms across all sectors. Infrastructure investments in basic connectivity have largely been made in most developing countries. UNCTAD estimates the investment costs associated with near universal coverage (a prerequisite for the SDG universal access target) at less than $100 billion. 
• Promoting investment in local digital content and services is crucial to speed up digital development. This means creating and maintaining a conducive regulatory framework for digital firms, as well as active support measures, which may include technology or innovation hubs and incubators; building or improving e-government services; and supporting innovative financing approaches. 

The findings of the Report will be debated this week at the World Summit on the Information Society Forum (WSIS) 2017, in a dedicated session on Investment and the Digital Economy on Thursday 15 June.

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