International capital flows are increasing, but new industrial projects are becoming less frequent. Behind the apparent recovery in foreign direct investment lies a transformation of globalization: major acquisitions, digital infrastructure and financial transactions are accounting for a growing share of investment value, while the geographical expansion of productive capacity is slowing.

A Global Economy Investing More but Building Less

Global investment presents a paradox in 2026 that reveals the changing structure of the international economy. Capital flows appear to be recovering strongly, even as several indicators of productive investment continue to deteriorate.

According to preliminary estimates published on October 25 by the United Nations Conference on Trade and Development (UNCTAD), global foreign direct investment (FDI) flows increased by 37% in the first half of 2026 compared with the average half-year level recorded in 2025.

Such an increase might suggest a renewed expansion of multinational business activity. Yet data on new industrial facilities, infrastructure projects and cross-border transactions point to a markedly different development.

The number of announced greenfield investment projects, involving the establishment of new facilities rather than the acquisition of existing assets, declined by 15%. International project finance deals fell by 11%, while announced manufacturing projects decreased by 5%.

The divergence is significant. It suggests that growth in the financial value of international investment is no longer necessarily accompanied by an increase in new productive facilities.

The global economy continues to attract and redistribute capital. But these flows do not translate everywhere into new factories, energy networks or infrastructure.

The question is therefore no longer simply how much the world invests. It is where that investment goes, which assets it targets and how it materializes in the real economy.

The Growing Weight of Major Acquisitions

This transformation is particularly visible in cross-border mergers and acquisitions.

During the first nine months of 2026, their combined value increased by 57%, reaching $494 billion. Over the same period, the number of transactions declined by 23%.

In other words, aggregate transaction values increased substantially even as deal activity became less frequent.

This development points to a greater concentration of investment value in a smaller number of transactions. It may reflect major acquisitions, industry consolidation or corporate restructuring involving multinational companies.

It also highlights a fundamental economic distinction.

When a corporation acquires a foreign company for several billion dollars, the transaction constitutes an international investment. It can profoundly alter ownership structures, industrial strategies and the geographical distribution of corporate assets.

But it does not automatically create a new factory, an additional research center or new employment.

An acquisition may subsequently generate productive investment. It may also facilitate technology transfers, improve operational efficiency or support international expansion.

Conversely, it may lead to capacity rationalization, workforce reductions or the consolidation of existing facilities.

The financial value of a transaction therefore cannot, on its own, measure its contribution to global productive capacity.

This distinction becomes increasingly important in an economy where a handful of megadeals can significantly influence international investment statistics.

FDI growth can consequently coexist with a decline in the number of new projects.

Financial Centers Complicate the Investment Picture

The geography of international finance also contributes to this divergence.

A portion of foreign direct investment flows passes through international financial centers, holding companies or ownership structures established in intermediary jurisdictions.

These movements may serve financing, asset ownership, international tax planning or corporate restructuring purposes.

The Benelux economies, particularly the Netherlands and Luxembourg, have historically played an important role in these financial networks.

The investment flows recorded through these jurisdictions can reach substantial amounts without corresponding entirely to new productive facilities within their borders.

This does not mean that such investments are fictitious. Rather, their statistical location may differ from the location of the underlying economic activities they finance or control.

A multinational company may reorganize ownership of several international subsidiaries through a holding company. The operation can generate significant FDI flows without immediately changing the group's industrial capacity.

Similarly, intragroup loans and certain equity transactions can produce substantial statistical fluctuations.

It is therefore necessary to distinguish three dimensions: the international movement of capital, the transfer of asset ownership and the actual creation of new economic capacity.

These processes may reinforce one another, but they are not equivalent.

The 37% increase recorded in the first half of 2026 must be interpreted in light of this complexity.

It provides information about the scale of international financial flows without demonstrating a comparable acceleration in productive capital formation.

Artificial Intelligence Is Reshaping Capital Allocation

Another factor is changing the structure of international investment: the rapid expansion of infrastructure required for artificial intelligence.

Data centers, computing equipment, electricity networks and processing capacity now mobilize enormous amounts of capital.

This transformation has a genuine industrial dimension. Building a data center requires physical facilities, equipment, electricity connections, cooling systems and telecommunications infrastructure.

But it also changes the sectoral and geographical distribution of investment.

According to figures presented by UNCTAD, AI-related activities accounted for more than 40% of the value of announced greenfield investments in the United States.

This proportion illustrates the exceptional weight of digital infrastructure in contemporary investment decisions.

It also reveals a form of concentration.

The largest projects tend to favor territories capable of combining several advantages: energy availability, digital infrastructure, access to advanced equipment, deep financial markets and proximity to major technology companies.

These advantages are not evenly distributed.

The United States benefits from a particularly favorable ecosystem, combining large technology companies, sophisticated capital markets and substantial demand for computing capacity.

Other economies are attempting to establish positions within this emerging industrial geography, but their ability to attract projects depends on constraints that can be difficult to overcome.

Reliable and competitively priced electricity is becoming an especially important determinant.

Artificial intelligence is therefore not eliminating the physical dimension of investment. It is reorganizing it around highly capital-intensive infrastructure and territories capable of meeting its requirements.

The risk is a growing concentration of investment value in a limited number of sectors and economies.

Developing Economies Are Losing Projects

The divergence between financial value and productive expansion is particularly concerning in developing economies.

Announced greenfield projects declined by more than 20% over the period examined.

This contraction exceeded the global decline.

Projects associated with the United Nations Sustainable Development Goals fell by more than 25%.

These figures concern investment announcements rather than expenditure already undertaken. They therefore cannot directly measure a contraction in physical investment.

Nevertheless, they represent an important leading indicator.

Investment location decisions made today help determine the production capacity, infrastructure and employment that will emerge over the coming years.

A sustained decline in new projects can consequently reduce future opportunities for industrial diversification and integration into international value chains.

For emerging economies, foreign investment often represents more than a source of financing.

It can provide access to technology, export markets, organizational expertise and international supplier networks.

A new manufacturing facility may generate economic effects extending far beyond its initial investment value.

It can stimulate vocational training, expand logistics services, encourage the emergence of local subcontractors and strengthen export revenues.

When projects become less frequent, these potential benefits become harder to secure.

The decline in announcements does not mean that all developing countries are following the same trajectory. Differences in industrial policy, institutional stability, infrastructure and market access remain decisive.

But it reveals a collective vulnerability: the territories most in need of new productive capacity are not necessarily those capturing the largest financial flows.

The Energy Transition Reveals an Investment Divide

Energy infrastructure financing provides one of the clearest indicators of this development.

In developing economies, the number of international renewable energy project finance deals declined by approximately one-third.

In developed economies, the corresponding decrease was only 4%.

The gap is substantial.

It highlights a divergence in the ability of different regions to mobilize international financing for energy infrastructure.

Renewable energy projects have particular financial characteristics. They generally require substantial upfront expenditure, while their revenues are distributed over long periods.

Their viability therefore depends heavily on the cost of capital, financing conditions, regulatory stability and the quality of electricity infrastructure.

In many emerging economies, these constraints are intensified by exchange-rate risks, high borrowing costs and the financial difficulties of public utilities.

A solar or wind project that is technically competitive may consequently become financially difficult to implement.

The decline in announced transactions does not necessarily imply a proportional reduction in installed renewable energy capacity. Projects can differ considerably in size and generating potential.

It nevertheless indicates a weakening international project finance pipeline.

This development comes at a time when electrification, grid modernization and energy diversification needs remain substantial.

It could widen the gap between economies capable of financing their energy transition rapidly and those whose projects remain constrained by financial conditions.

The global energy transition therefore depends not only on technological availability but also on the international allocation of capital.

A Digital Economy That Does Not Benefit Emerging Markets Equally

Artificial intelligence could theoretically become a new source of investment for developing economies.

Data centers, connectivity infrastructure and digital services offer opportunities for economic diversification.

Yet UNCTAD's figures suggest a more uneven picture.

The announced value of data center investments in developing economies declined by $32 billion.

This decrease contrasts with the growing importance of AI-related projects in investment announcements in the United States.

It would nevertheless be premature to conclude that digital investment as a whole is permanently moving away from emerging economies.

Data center projects are frequently large in scale. The postponement or cancellation of a small number of projects can substantially affect announced investment values.

The comparison nevertheless reveals an asymmetry.

Advanced computing infrastructure requires a combination of resources that not all economies can provide simultaneously.

Energy demand, network quality, land availability, cooling capacity and access to advanced technologies strongly influence location decisions.

Investment may therefore concentrate in markets that already possess structural advantages.

This raises a broader question: will artificial intelligence encourage the international diffusion of technological capacity, or will it reinforce the geographical concentration of digital infrastructure?

Available data do not yet provide a definitive answer.

They do, however, demonstrate that rising global AI-related expenditure does not guarantee an even distribution of investment across economies.

Globalization Is Changing Its Logic

For several decades, the expansion of international investment accompanied the geographical fragmentation of production.

Multinational corporations distributed their activities across territories to benefit from competitive costs, access new markets and organize international supply chains.

This process supported the emergence of major manufacturing centers, particularly in Asia, while helping several developing economies integrate into global trade.

The current environment displays different characteristics.

Geopolitical considerations, industrial policies, supply-chain security and control over critical technologies now occupy a central position in investment decisions.

Companies are simultaneously seeking to reduce certain dependencies, secure infrastructure and consolidate their competitive positions.

These strategies may encourage new industrial investment in some territories.

But they may also concentrate projects in economies that already possess substantial technological, financial and energy capabilities.

Globalization can therefore no longer be understood solely through the search for the lowest production costs.

It increasingly incorporates objectives related to resilience, strategic control and proximity to markets considered essential.

In this environment, major acquisitions can provide rapid access to technologies, commercial networks or industrial positions without requiring the immediate construction of new facilities.

International investment may consequently shift toward consolidating existing assets rather than continuously expanding the geographical distribution of productive capacity.

This transformation does not represent the disappearance of globalization.

It changes the mechanisms through which its economic benefits are distributed.

The Risk of Financial Growth Without Proportional Development

The figures for 2026 reveal a fundamental tension.

On one side, international financial flows are increasing strongly, and major transactions continue to mobilize hundreds of billions of dollars.

On the other, announcements of new industrial projects, infrastructure investments and development-related projects are declining.

It would be methodologically incorrect to compare these variations as though they measured the same economic phenomenon.

FDI flows are financial transactions recorded over a given period. Greenfield projects represent announcements of future investment. Mergers and acquisitions measure transfers of ownership. Project finance follows another statistical framework.

The observation periods also differ: some estimates cover the first half of 2026, while transaction data extend across the first nine months of the year.

These distinctions prevent any conclusion that global productive investment has declined by 15% or that worldwide industrial capacity is contracting.

They do not, however, diminish the significance of the underlying signal.

Growth in the financial value of international investment is occurring alongside a decline in the number of several categories of projects.

This divergence suggests increasing investment concentration in terms of transaction size, sectoral destination and geographical distribution.

For developed economies, it may accompany technological transformation and industrial consolidation.

For emerging economies, it risks reducing opportunities to access the capital required to build new productive capacity.

The distinction is fundamental.

An economy can attract capital without experiencing a proportional expansion of its productive base. Conversely, a relatively modest investment can generate lasting economic benefits when it develops skills, supplier networks and local industrial capabilities.

The quality of investment therefore cannot be assessed solely through its financial value.

It also depends on its ability to transform economic structures over time.

A New Divide in the Global Economy

UNCTAD's Global Investment Trends Monitor No. 51 does not describe a collapse in international investment.

It reveals a transformation in its composition.

Capital continues to circulate, corporations continue to pursue acquisitions, and technological infrastructure continues to attract substantial resources.

But the number of new productive projects is not necessarily following the same trajectory.

This development may signal a form of globalization in which rising investment values become increasingly disconnected from the geographical diffusion of industrial capacity.

Economies capable of attracting major digital infrastructure projects, strategic technologies and long-term financing may strengthen their positions.

Those that depend more heavily on new foreign investment projects to develop their industrial base may instead face diminishing opportunities for productive integration.

The divide would no longer exist solely between countries receiving substantial investment and those receiving relatively little.

It would also separate territories that concentrate financial value from those capable of transforming capital into production capacity, infrastructure and skills.

This is precisely what aggregate investment statistics risk concealing.

In 2026, the global economy can report strong growth in FDI flows while recording fewer new projects.

The paradox is only apparent: the movement of capital and the creation of productive capacity are two distinct economic processes.

The decisive question for the coming years is whether international investment will continue to expand the geography of global production or primarily reinforce established economic positions.

Because a form of globalization capable of moving ever-larger volumes of capital, while spreading the means of production less widely, could ultimately deepen the imbalances it once helped to reduce.