TALENT IS THE NEW CURRENCY OF GLOBAL FDI

Why countries investing in skills and innovation are winning the race for investors

- BY MOHAMMAD JUMA AL MUSHARRKH | Special to Gulf News

For decades, the global competition for Foreign Direct Investment (FDI) was a straightforward race to the bottom; with nations around the world enticing investment through lucrative incentives including tax breaks, attractive land and real estate opportunities, and relaxed regulations.

While these still play a role in a global context, especially within developing nations, a major shift is underway; and the most valuable asset a country can now offer is no longer financial, but human capital; and arguably, the future of FDI is talent.

A 2025 survey by the Society for Human Resource Management (SHRM) finds that 71 per cent of global business leaders now rank access to skilled talent as the single most important factor in investment decisions, surpassing even costs, regulations, and location. Investors increasingly ask not just, “What will it cost?” but, “Who will run it, and do they have the skills?” This reality is even more pressing as global FDI flows slow: while world FDI fell by 11 per cent in 2024 according to UNCTAD, countries prioritising digital literacy and innovative ecosystems outperformed the rest.

Skills-backed economy