Product update

Targeting investors and markets in a multipolar world

Global investment flows are being reshaped by geopolitical tensions and shifting trade policies. Rory McRobbie examines what this means for Economic Development Organisations and how refreshed sector priorities and smarter market strategies can help them stay competitive in a multipolar world.

September 16, 2025
By Rory McRobbie

From globalisation to fragmentation: What it means for EDOs

Foreign direct investment (FDI) into the United States is no longer driven by economic fundamentals alone. Geopolitical tensions, trade barriers and shifting regulatory landscapes are increasingly shaping where capital is landing globally.

For Economic Development Organisations (EDOs), this means adapting to a more fragmented and uncertain global market, with prioritisation of sectors and markets no longer just about tracking the largest sources of capital. This blog explores how shifts in the global FDI landscape are reshaping FDI competition, and how EDOs should review their investment attraction strategies to stay ahead.

Digital stock market board with figures displayed

Geopolitical and geoeconomic fragmentation: What it means for FDI decision-making and strategy

Based on analysis from numerous international organisations including the IMF, WEF, MIGA and WAIPA, the global FDI landscape is undergoing a significant transformation away from intense economic integration associated with globalisation towards a fragmented, multipolar economy. The result is that the division of economies into competing geopolitical blocs with differing strategic interests is intensifying at an accelerated rate, with consequences on trade, investment, and supply chains between these blocs.

For EDOs, understanding these dynamics is essential when reviewing their sector and market strategies. Traditional source markets may no longer represent low-risk opportunities, while new markets may emerge as emerging opportunities in strategic sectors. Key trends and policies to be aware of include:

Geopolitical fragmentation:

Tariffs, export controls, and restrictions on sensitive technologies (e.g., semiconductors, AI, cleantech) are prompting firms to relocate production and R&D to safe haven locations. Although major emphasis has been placed on US and US-aligned countries seeking to redirect supply chains to geopolitically friendlier locations, these developments have also had a pronounced impact on the operations of China-based multinationals in the US and other US-aligned jurisdictions, where heightened investment screening and export controls have impacted its potential as a source market into sensitive sectors.

Close-up of US dollar bills

United States tariffs:

The introduction of reciprocal tariffs on all US trading partners in 2025 have significantly impacted the competitiveness of foreign exports to the country across all products, which has increased interest in ‘tariff-hopping’ FDI from MNCs to access the market. According to the fDi Markets database, tariff-related greenfield projects increased by 133% in the first half of 2025 compared with the entirety of 2024 (with announced CapEx increasing from $473 million to $5.5 billion). For US-based EDOs, this shift represents both a challenge and an opportunity. While global supply chains are being disrupted, US locations demonstrating efficient logistics, existing infrastructure, skilled labour pools, industry clusters, and business regulatory fundamentals are in a strong position to capture this market-seeking FDI.

Scientists working on advanced machinery in a lab

Industrial Strategies:

Are being implemented across major economies, with the use of incentives such as subsidies, tax credits, and grants, and access to public procurement contracts as a tool to attract new FDI and reshore investments in strategic sectors. For the United States, this has been most evident with the IRA and CHIPS act for the cleantech and semiconductor sectors, however these are being scaled back as part of the Trump Administration’s OBBB act in June 2025 which has weakened these programs as selling messages for US locations.

Concerns over market access and geopolitical alignment now sit alongside energy costs, existing infrastructure, industry clusters, and labour quality and availability is increasingly shaping investment decisions. For EDOs, responding means more than promoting assets, it requires providing credible solutions that address these challenges directly. Corporations are not only asking “Where is the best return?” but also “Where am I safest in deploying capital?”. EDOs must provide compelling answers to this question to land investment projects in a fragmented global economy.

How is your organisation’s investment promotion strategy addressing the risks of a multipolar world?

Sector and market prioritisation requires EDOs to track not only which sectors are the highest potential for your location and where that FDI originates, but also how government policy, geopolitics, and macroeconomic conditions shape outbound FDI. EDOs should evaluate which of these sectors and markets are both contestable (high outbound investment intent) and strategically aligned with your location’s sector strengths. In a multipolar world, success will come from considering and implementing the following key best practices:

Team reviewing charts and data at a table

Sector prioritisation refresh:

While your EDO may already have prioritised sectors for promotion, conducting a sector analysis refresh is essential to ensure these sectors 1) continue to align with your location’s value proposition; 2) continue to attract significant volumes of investment and demonstrate growth and; 3) align with your location’s economic development goals (e.g., CapEx invested, jobs created, exports, R&D). This exercise is critical to undertake now, as sector FDI potential is being reshaped by tariffs, energy costs and supply chain changes. In today’s multipolar world, where geopolitical realignments, competing industrial policies, and investment screening regimes are fragmenting traditional flows, locations must position themselves to address future policy changes affecting corporate location decision-making. Data-driven approaches are key. Databases such as fDi Markets provide comprehensive greenfield FDI and inter-state investment breakdowns across both traditional and emerging sectors and across all international source markets for investment.

Welder at work with sparks flying

Segmented market prioritisation:

Instead of pursuing all FDI source markets equally, your EDO should focus marketing and lead generation resources on a core set of high-yield, high-alignment source countries that are investing in your priority sectors and are actively investing in their US-based footprint. Target markets for your location should be categorised by primary, secondary, and tertiary tiers, based on their strengths as FDI source markets, and the level of effort your team is able to commit to targeting them. Clear segmentation is essential to maximise competitiveness and ensure limited resources are deployed with strategic impact.

Skyline of major financial institutions in Canary Wharf, London

Go-to-market strategy development:

Identifying the largest concentrations of firms operating and investing in your target sectors by regions and cities will help your organisation prioritise where to focus outreach, lead generation efforts, and in-market visits to build deeper relationships with the highest priority investors. For each of your location’s international target markets, customised go-to-market strategies are required, with a mix of digital promotion, intermediary partnership development, and in-person attendance of events and roadshows working at varying degrees of effectiveness in different markets. In a landscape where investment decisions are shaped not only by economic drivers but also by geopolitical alignment, shifting trade flows, and regional policy incentives, tailored go-to-market strategies, employing a variety of tactics, are critical to ensure your location stands out to investors navigating an increasingly fragmented global economy.

Magnifying glass over charts and a laptop

Is your FDI strategy built on assumptions - or real intelligence about today’s investors?

In a multipolar and increasingly divided global economy, the landscape for targeting the right sectors and markets for FDI attraction is shifting, and incorporating these shifting factors into an EDOs investment attraction strategy is crucial to managing this.

At FT Locations, we have a strong track record of conducting sector and market strategy analysis, and practice-based go-to-market strategies for EDOs across the United States and internationally. Our work is focused on ensuring locations are targeting the highest value sectors and markets based on their economic development goals. Get in touch to learn more about how we can help your organisation stay ahead.