What is the new paradigm for FDI discussed by Mikael Wigell?

The new paradigm is 'strategic capitalism,' where states actively steer investment for national security, technological capacity, and geopolitical leverage.

Why is Europe expected to see a decline in FDI?

Factors include U.S. tariffs, regional conflicts, political instability, budget crises, and a weak economic climate in the EU.

Which industry is still gaining momentum in Europe for FDI?

Investment in the artificial intelligence (AI) industry continues to gain momentum across all sectors.

Home / Business and Economy / FDI Faces Turbulence: Security Trumps Efficiency

FDI Faces Turbulence: Security Trumps Efficiency

19 Dec, 2025

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Summary

FDI priorities shift from efficiency to security and resilience.
Europe faces significant FDI decline in 2025 and 2026.
AI investment is a growing exception amidst European decline.

FDI Faces Turbulence: Security Trumps Efficiency

The global foreign direct investment landscape has been profoundly reshaped by a year of political and economic instability. Security, resilience, and strategic advantage now outweigh efficiency as primary investor considerations. This evolving paradigm of "strategic capitalism" sees nations actively directing investment to bolster national security and technological capabilities.

Across Europe, a significant decline in FDI project volumes is anticipated for 2025 and will likely persist into 2026. Investor decisions are increasingly hampered by U.S. tariff measures, ongoing regional conflicts, political instability in countries like France, and a generally weak economic climate.

Despite this downturn, investment in the artificial intelligence industry is showing strong momentum across various sectors. Western Europe, with its robust research and development infrastructure and skilled workforce, remains a key hub for international companies establishing advanced research and engineering centers.