Top 25 Countries for Foreign Direct Investment by Software & IT Service Operations
by King White, on Aug 24, 2021 9:26:55 AM
Global corporate site selection strategies for software development, software engineering and IT service operations continually change as companies migrate jobs onshore, nearshore and offshore. When the economy is good, companies move jobs onshore where labor quality is the best but the costs are high. However, during challenging economic times you will find many companies shifting jobs nearshore and offshore. One way to track these location trends is by foreign direct investment (FDI) data — one of the standard methods of measuring global corporate investment.
By definition, FDI occurs when the controlling ownership in a business enterprise in one country makes a direct investment into an entity based in another country. When successful, global location trends are created and economies can experience significant diversification of their industry as evidenced by countries such as India where software development and IT service operations have rapidly expanded.
To help identify which countries have had the most success, Site Selection Group evaluated 33,537 FDI projects in 81 countries to identify the top 25 countries that had the most software and IT service operations opened by foreign companies since 2003. The following table provides a summary of the results.
Top 25 Countries for Foreign Direct Investment
| Rank | Country | Software and IT Services |
| 1 | UK | 4,055 |
| 2 | USA | 3,952 |
| 3 | India | 2,525 |
| 4 | Germany | 2,277 |
| 5 | France | 1,719 |
| 6 | Australia | 1,441 |
| 7 | China | 1,403 |
| 8 | Singapore | 1,334 |
| 9 | Canada | 1,000 |
| 10 | Spain | 969 |
| 11 | Ireland | 864 |
| 12 | Japan | 763 |
| 13 | UAE | 757 |
| 14 | Netherlands | 727 |
| 15 | Brazil | 682 |
| 16 | Hong Kong | 525 |
| 17 | Mexico | 491 |
| 18 | Poland | 470 |
| 19 | Switzerland | 394 |
| 20 | Romania | 362 |
| 21 | Malaysia | 338 |
| 22 | Italy | 302 |
| 23 | Denmark | 289 |
| 24 | South Africa | 285 |
| 25 | Sweden | 284 |
Source: FDI Markets
Trending countries that did not make the top 25
There are many countries that did not make the top 25 list but have been gaining a lot of momentum in recent years. Columbia, Philippines, Vietnam, Czech Republic, Costa Rica and Bulgaria, to name a few. The tech industry sector is growing rapidly in these geographies but just doesn’t have the historic track record to break into the top 25. This can be a good opportunity for companies trying to find emerging or less saturated countries for expansion but these countries can often come with trade-offs such as lack of scalability or political instability.
Conclusions
Software and IT services operations faced with the demand for high-quality talent but at a reasonable cost. As companies try to balance these demands, foreign direct investment will continue as the operations shift between onshore, nearshore and offshore geographies. FDI data is one way to help you identify these corporate site selection trends.
