International investment increased in value during the first six months of 2026, but the number of new investment projects continued to decline, revealing a growing concentration of global capital in a relatively small number of countries and strategically important industries.
The findings, released by UN Trade and Development (UNCTAD) on 25 October, suggest that a recovery in headline investment figures is not translating into a broad expansion of productive investment across the world economy.
According to the agency’s latest investment assessment, investment in sectors considered essential for development — including infrastructure, energy, healthcare and food systems — fell by more than 25 per cent in developing economies during the first half of the year.
The figures were presented as the ninth World Investment Forum opened in Doha, Qatar, bringing together governments, international investors, financial institutions and business leaders from 25 to 27 October.
The contrast between rising investment values and declining project activity is significant. It suggests that major transactions in selected industries are supporting aggregate figures while the wider investment environment remains difficult.
Why headline investment figures can be misleading
Foreign direct investment can increase substantially when multinational companies undertake large acquisitions or establish expensive facilities in particular industries.
Such transactions may raise total investment values without producing a corresponding increase in the number of businesses expanding overseas.
The distinction matters because new investment projects often generate demand for construction, equipment, local services and employment.
Large financial transactions may also deliver economic benefits, but they do not necessarily create equivalent levels of new productive capacity.
UNCTAD’s assessment indicates that investment has become increasingly selective as companies respond to geopolitical tensions, uncertain economic conditions and changing supply-chain strategies.
Investors are concentrating resources in markets that offer political stability, established infrastructure, skilled labour and access to major customers.
This favours countries already capable of attracting substantial international capital.
Developing economies lose ground
The geographical concentration of investment has become particularly pronounced.
UNCTAD’s World Investment Report 2026 found that more than 80 per cent of global foreign direct investment in 2025 went to just 20 economies.
The report also recorded a six per cent increase in global foreign direct investment to approximately $1.6 trillion that year, ending two consecutive years of decline.
However, the recovery was distributed unevenly.
Developing economies outside the principal investment destinations face increasingly difficult conditions, particularly where energy infrastructure, transport links and financial markets remain underdeveloped.
For these countries, declining investment in productive sectors can create a self-reinforcing problem.
Weak infrastructure discourages investors, while insufficient investment prevents governments from improving the infrastructure required to attract future projects.
The consequences extend to employment, productivity, public revenues and access to essential services.
The rise of strategic investment
One of the defining features of the current investment environment is the concentration of capital in industries regarded as strategically important.
Artificial intelligence, data centres, semiconductors, critical minerals and energy infrastructure are attracting considerable interest.
Governments are also encouraging investment in domestic manufacturing and supply-chain security, reflecting growing concern about dependence on foreign suppliers.
This changing environment creates opportunities for countries able to establish themselves within emerging industrial networks.
However, it also raises barriers to entry.
Large technology and manufacturing projects frequently require reliable electricity supplies, specialised workers, suitable land and substantial public infrastructure.
Countries lacking these capabilities may find themselves excluded from the most attractive new investment flows.
The trend is particularly relevant to Europe’s industrial strategy.
As QuestComms recently reported, the European Union is supporting strategic raw-materials projects to reduce reliance on concentrated international supply chains.
Such initiatives can improve economic resilience, but they also contribute to greater competition between governments for limited investment capital.
What governments can do
Investment promotion increasingly requires more than offering tax incentives or announcing favourable business policies.
Investors evaluate the reliability of legal institutions, infrastructure, administrative procedures and the availability of skilled employees.
Lengthy permitting processes and uncertainty over regulations can discourage projects even in markets offering attractive commercial opportunities.
UNCTAD argues that investment policy must therefore address the wider conditions necessary for businesses to commit capital over extended periods.
The World Investment Forum programme includes discussions on sustainable finance, entrepreneurship, artificial intelligence, energy and the use of special economic zones to attract investment.
These measures may help governments improve their position, although their effectiveness depends on implementation and the availability of financing.
For Europe, the investment challenge also concerns the ability of smaller businesses to obtain capital for expansion.
QuestComms has previously examined EU securitisation reforms intended to expand bank lending and investment, highlighting the importance of financial-market structures in supporting economic growth.
A recovery with important limitations
The latest UNCTAD figures do not indicate that international investment has collapsed.
Capital remains available, and significant projects continue to proceed in technologically advanced and strategically important sectors.
The problem is that investment is becoming concentrated geographically and industrially.
This creates a widening difference between countries participating in the latest wave of economic development and those struggling to attract basic productive investment.
For businesses, the changing environment will influence decisions about where to establish operations, develop supply chains and seek international partnerships.
For governments, it raises questions about industrial policy, investment incentives and the role of public institutions in reducing commercial risk.
The central message from Doha is that higher global investment totals should not be confused with a broad recovery.
Unless new projects become more widely distributed, the benefits of international capital may continue to accumulate in economies already best placed to attract it.
