Fact of the Week: Foreign Direct Investment Flowing Into the United States More Than Doubled in 2021

Luke Dascoli January 31, 2022
January 31, 2022

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Source: James Zhan, “Investment Trends Monitor, No.40,” United Nations Conference on Trade and Development, January 2022.

Commentary: Despite the pandemic-induced shocks of 2020, investor confidence has since appeared to recover. The technology-driven recoveries pursued by innovation leaders aiming to navigate a labor market disrupted by COVID-19 has created new opportunities for reinvigorated foreign investment (FDI) around the world, as reported by a recent publication by the United Nations. The report identified a 77 percent increase in global FDI to an estimated $1.65 trillion, from $929 billion in 2020, surpassing pre-pandemic levels of recent years.

The United States deepened its receipts of inward FDI by more than 114 percent in a single year, reporting $323 billion in 2021 and maintaining its position as the largest host economy of foreign investment. In fact, the United States reported nearly double the EU’s inward FDI, which in sum came to $165 billion in the same year.

As global demand for information and communication technologies (ICT) rose as a response to the pandemic’s disruption on in-person work and life, the ICT industry has grown to be the highest receiver of FDI for new projects of any global industry, reporting $100 billion toward new projects in ICT around the world. Compared to 2019 levels, both the information and communications industry and the electronics and electrical equipment industry doubled their receipt of global FDI for new projects, where they were previously outranked in new FDI by the automotive industry, the construction industry, and the electricity and gas supply industries. This growth shows the market for global investment has since fully recovered from its 2020 shock and that the need for innovative ICT amid the pandemic has spurred greater investment opportunities than in previous years.