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Distinguished guests,
Colleagues,
Friends all,
Welcome to this 8th OECD Roundtable on Investment and Sustainable Development, part of our flagship “Sustainable Investment Days.”
Your discussions today are an opportunity to exchange views on policy tools to unlock new, high-quality investment for stronger, more sustainable economic growth.
There has been a sharp decline in both public and private investment since the 2008 Global Financial Crisis — despite the historically low borrowing costs and despite strong corporate profits during much of that period.
Across advanced economies, total real investment volumes last year were 22% below the pre-global financial crisis trend level,
They were even 7% below the pre-COVID trend level.
Among businesses, investments in tangible assets such as infrastructure and machinery have declined as a proportion of revenue since 2000.
This has, in turn contributed to a marked slowing in productivity growth and weakened the long-term growth prospects of our economies.
Current potential GDP per capita growth in the OECD is estimated at 1.3%, down from around 2.4% in the 1990s.
Recent policy uncertainty, tighter financial conditions, geopolitical tensions, and mounting restrictions on trade and cross-border investment are now weighing further on consumer, business and investor confidence putting further downward pressure on growth prospects moving forward.
Our latest data, published just last week, shows that global foreign direct investment flows in the first half of 2025 were 6% below their levels in the first half of 2024.
Cross-border merger and acquisition activity has slowed, particularly in advanced economies.
Indeed in advanced economies, deal values declined by 9% and the number of concluded deals fell by 6% in the first half of 2025 compared to the last half of 2024.
And, for the first time since 2018, the OECD Foreign Direct Investment Regulatory Restrictiveness Index recorded a small increase in restrictions last year.
This increase was driven by new restrictions in strategic sectors like energy, critical minerals, and financial services.
Restoring a higher level of economic and trade policy certainty, resolving trade tensions through dialogue and co-operation, remains a high priority to help boost the global growth momentum.
And it would help to reinvigorate investment flows around the world.
Our strong advice to all Governments is to work harder, bilaterally and multilaterally, to find the best possible ways to make our international trading arrangements fairer and function better, in a way that preserves the economic benefits of open markets and rules-based global trade.
Foreign direct investment is a powerful force for business dynamism in domestic industries.
When a firm receives foreign investment, positive spillovers often boost the productivity of nearby companies.
Foreign multinational enterprises, owing to their larger scale and access to technology and capital, are also on average 70% more productive than domestic firms.
And foreign direct investment supports innovation, particularly in the green and digital economy, which together attracted half of all global greenfield foreign direct investment flows between 2021 and 2024.
So we need to continue to draw on these very real benefits of foreign direct investment, while tackling genuine concerns about an unlevel playing field, supply chain resilience and economic security.
Towards this, the OECD is supporting policymakers with our unique data, analysis and evidence-based policy advice on:
First, we need to better balance the need for higher beneficial foreign investment flows with national security related considerations.
The list of sectors with more stringent foreign direct investment screening has been expanding as new risks to national security are identified, including in energy, new and emerging technologies and health infrastructure.
Many of the sectors which are facing more stringent investment scrutiny are also those where greater investment is needed.
For example, if we are to meet our carbon neutrality by 2040 objectives, the energy sector will require a total global clean energy investment of USD 4.5 trillion over the period to 2030. That is equivalent to two and a half times all clean energy investments made to date.
Foreign direct investment is key to meeting these financing requirements, supporting new renewable energy generation, transmission, storage and transport electrification projects.
Greenfield foreign direct investment represented almost half of global investment in renewable energy in 2023, nearly double the 25% back in 2015.
To support governments in better balancing the need for more foreign investment with national security related considerations, the OECD has developed “Guidelines for Recipient Country Investment Policies relating to National Security” which provide guidance on how best to ensure that any national security related safeguards and screening tools are non-discriminatory, transparent, predictable and proportional.
Effective investment promotion efforts are also needed to support companies in complying with national security safeguards and navigating policy uncertainty.
Our 10th OECD Investment Promotion Agency Network Meeting yesterday explored how agencies can refine their services to investors and optimise their strategies in the current complex environment.
Second, ensuring a supportive policy environment to attract investments in the digital transformation and AI.
Investment in new and emerging technologies is concentrated among large multinational firms and in a limited number of markets – which risks accentuating existing gaps as a result of the different levels of development and adoption of new technologies.
So far this year, the United States represented 79% of all AI-related venture capital investments across the OECD.
Cumbersome foreign investment screening procedures, complex legal frameworks for digital technology investments, and an underdeveloped start-up and AI ecosystem of entrepreneurs and investors are key obstacles limiting investment in other markets.
The upcoming OECD FDI Qualities Policy Framework for the Digital Transformation provides guidance on how best to improve the environment for investments in the digital transformation, including on:
- Strong competition policies, intellectual property protection and facilitation of cross-border data flows to level the playing field between firms,
- Targeted incentives and capacity building activities to support small- and medium-sized businesses with technology adoption, and
- Simplified administrative processes and enhanced facilitation services to connect potential investors and domestic firms.
Third, aligning investment tax incentives with economic development priorities, avoiding competition that is harmful to public finances.
Tax incentives are one of the most common measures to attract foreign direct investment.
Last year all but three out of the 70 economies covered by the OECD Investment Tax Incentives Database granted at least one investment incentive in the form of a tax exemption.
If well designed, tax incentives can help address market failures that constrain much-needed investment in support of government policy priorities, but poorly designed measures can be wasteful or disrupt the level playing field, creating significant fiscal and economic costs.
The forthcoming OECD Practical Guide on Investment Tax Incentives will offer step-by-step advice to help governments, especially in developing and emerging economies, with designing, implementing, monitoring and evaluating sound investment tax incentive schemes.
In conclusion,
We need ambitious policy reform and investment facilitation efforts to unlock new investment, and ultimately boost productivity and growth, while safeguarding national security and progressing towards achieving our sustainability objectives.
The OECD will continue to provide data and evidence-based recommendations to help make that happen.
My very best wishes for a positive, constructive and productive discussion.
Thank you.
Working with over 100 countries, the OECD is a global policy forum that promotes policies to preserve individual liberty and improve the economic and social well-being of people around the world.