Kearney's 2026 FDI Confidence Index® finds investors recalibrating strategies amid geopolitical tension and industrial policy expansion

• Results from the 2026 survey capture a snapshot of investor sentiment in January.
  
  
• Asia holds the largest share of ranked markets on the main Index for the first time in more than a decade.
  
  
• Technological and innovation capabilities emerge as the most important factor shaping investment decisions.
  
  
• Industrial policy is now a critical factor in investment decisions, with 84 percent of investors citing it as extremely or very important.

WASHINGTON, April 9, 2026 /PRNewswire/ -- Kearney's Global Business Policy Council today released the 2026 Foreign Direct Investment Confidence Index (FDICI), an annual survey of global business executives that ranks markets most likely to attract foreign direct investment (FDI) over the next three years. The 2026 Index reflects a global investment environment shaped by intensifying geopolitical tensions, expanding industrial policy, and accelerating technological competition.

The survey, conducted in January 2026 among more than 500 senior executives from leading corporations worldwide, shows that companies are committed to international investment despite mounting uncertainty. Eighty-eight percent of respondents say they plan to increase foreign direct investment over the next three years, signaling sustained confidence in long-term global opportunities. 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.

"Investors still believe in the value of FDI, but they are recalibrating how they make their decisions in a more turbulent operating environment," said Erik R. Peterson, partner and managing director of Kearney's Global Business Policy Council and co-author of the report. "Capital continues to flow, but companies are becoming more selective about where they invest as they weigh technological capabilities, geopolitical risks, and the growing influence of industrial policy."

Innovation drives investment decisions

Technological and innovation capabilities rank as the most important factor influencing where companies choose to invest, surpassing traditional considerations such as 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. As investment in artificial intelligence, digital infrastructure, and data-driven technologies accelerates worldwide, markets with strong innovation ecosystems are increasingly viewed as the most attractive destinations for long-term investment.

This preference for technologically advanced economies is evidenced by the United States maintaining its position as the world's most attractive destination for foreign direct investment for the 14th consecutive year. Investors continue to cite the country's technological leadership and economic resilience as key reasons for investing. However, despite the United States maintaining its top ranking, investor sentiment has softened, with net optimism about the 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.

Emerging markets attract renewed investor interest

Emerging markets remain dynamic and increasingly interconnected with global investment flows. China, the United Arab Emirates, 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 United Arab Emirates, 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 over year, with investors expressing the strongest optimism about the economic outlook for markets such as 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.

Geopolitical risk and industrial policy reshape the investment landscape

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 percent), followed by commodity price increases and political instability in developed markets (30 percent).

At the same time, industrial policy is playing a central role in shaping investment decisions. According to the survey, 84 percent of investors say industrial policy is extremely or very important in determining where they invest, and 57 percent 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 80 percent saying infrastructure investment is effective in achieving economic and security goals, while enthusiasm for tariffs and export controls is significantly lower.

"Industrial policy is reshaping the global investment landscape and fast becoming a key factor in FDI decision-making," says Terry Toland, principal at Kearney's Global Business Policy Council and co-author of the report. "Investors are weighing the opportunities created by subsidies and other policy incentives with the complexity of competing industrial policies across markets."

About the 2026 Kearney FDI Confidence Index^®

The 2026 Kearney FDI Confidence Index^® is constructed using primary data from a proprietary survey of 507 senior executives of the world's leading corporations. The survey was conducted in January 2026. Respondents include C-level executives and regional and business leaders. All participating companies have annual revenues of $500 million or more. The companies are headquartered in 29 countries and span all sectors.

The Index is calculated as a weighted average of the number of high, medium, and low responses to questions on the likelihood of making a direct investment in a select market over the next three years.

Index values are based on responses only from companies headquartered in foreign markets. For example, the Index value for the United States was calculated without responses from US-headquartered investors. Higher Index values indicate more attractive investment targets.

All economic growth figures presented in the report are the latest estimates and forecasts available from Oxford Economics unless otherwise noted. Other secondary sources include investment promotion agencies, central banks, ministries of finance and trade, relevant news media, and other major data sources.

About Kearney

For 100 years, Kearney has been a leading management consulting firm and trusted partner to three-quarters of the Fortune Global 500 and governments around the world. With a presence across more than 40 countries, our people make us who we are. We work impact first, tackling your toughest challenges with original thinking and a commitment to making change happen together. By your side, we deliver—value, results, impact. Learn more at www.kearney.com.

For past editions of the FDI Confidence Index, please go to:
www.kearney.com/foreign-direct-investment-confidence-index.

For more information, contact the Global Business Policy Council ([email protected]).

Media contact:

Meir Kahtan
Meir Kahtan Public Relations, LLC
+1 917-864-0800
[email protected]

SOURCE Kearney