Last week, global management consulting firm A.T. Kearney released its 2013 Foreign Direct Investment Confidence Index. The major surprise: For the first time in more than a decade, senior executives in large companies chose the US as the most favorable place to make foreign direct investment (FDI).
According to Kearney, the US rose to the top for the following reasons:
- After downturn-induced cutbacks, companies are investing in productivity-enhancing tools and equipment.
- The dollar has weakened, while wages in developing countries have risen.
- Most notably, China slipped to second place because increasing labor costs raise questions about the long-term attractiveness of China’s development model.