Analysis by Péter Goreczky
Global manufacturing industries and supply chains have been hit by a number of turbulences, some of which will also have an impact on the site selection of FDI projects. Rising geopolitical tensions, recurring lockdowns due to the COVID-pandemic, turmoil in maritime logistics, or the global semiconductor shortage all increase the necessity of reshoring and in-house manufacturing, although relocating production to the homeland is facing serious headwinds in many cases. Experience shows that most multinational companies are considering different scenarios of decentralising production, through which they are seeking a balance of scale, proximity of markets, and flexibility. Overall, the main task of countries competing for FDI remains unchanged: securing attractive conditions and a supportive environment for corporate value creation in the long run. Beyond the current spectacular turbulences of supply chains, the future of the manufacturing industries and the site selection of the related FDI projects will mostly be determined by the rollout of Industry 4.0 and the digital transformation, and this is what national investment promotion must prepare for.
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