IBM Annual Survey: Europe Regains Number One Position for Inward Investment

Mature Economies Recover as Some Emerging Markets Slightly Cool, Business Services Ranks as Most Popular Inward Investment

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ARMONK, NY - 18 Sep 2006: IBM's (NYSE: IBM) annual survey of countries receiving investment from multinational companies in the areas of manufacturing, services and R&D reveals Europe regained from Asia its top position in 2005, attracting 39 percent of all projects. Asia attracted 31 percent of all projects. In 2004, both regions tied at 35 percent.

The survey by IBM-Plant Location International (IBM-PLI), the global location strategies service within IBM Global Business Services, reports a slight rebound by mature economies due to strong economic growth while some leading emerging markets cooled after a number of years of very strong investment.

Business services ranked as the most popular type of inward investment project, accounting for 20 percent of all global projects, while manufacturing investment decreased globally on average by 20 percent -- to some 800 projects per quarter in 2005. Investment in new R&D centers remained fairly stable in 2005 at 200 projects every quarter globally.

Additionally, the survey found 15 countries again receiving 70 percent of overall inward investment. Four countries entered the top 15 in 2005 -- Poland, Romania, Singapore and UAE, replacing Hong Kong, Hungary, Spain and Sweden. Notably, the United Kingdom, France and Poland won considerably more investment and increased their market share.

"Even though mature economies have caught up slightly, the survey illustrates multinational companies can increasingly seek talent pools anywhere in the world," said Roel Spee, co-leader of IBM-Plant Location International. "Global competition for new jobs and capital investment is increasing continuously; developed and developing regions must continually define and implement new strategies to attract investment. Competitiveness in innovation and technology-driven strategy will play a vital role in creating new economy jobs."

The dominant emerging markets of Brazil, Russia, India, and China -- commonly referred to as the BRIC countries -- showed an average decrease in foreign inbound investment of almost a fifth in 2005 compared to the previous year. At the same time, the most mature economies began to recover from prior years, recording a 5 percent increase in foreign investment projects in 2005 compared to 2004. More R&D projects were registered in 2005 by Australia, Canada, Denmark, France, Germany, Ireland, Singapore, United States and UK than in 2004.

For the third consecutive year, China and India combined received more investment projects than the U.S -- 1,650 to 1,200 respectively. U.S. headquartered companies remained the largest generators of cross border investments, with 2,800 projects. However, German-based companies took over second place from their Japanese counterparts, 720 to 670 outward investment projects in 2005 respectively.

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Notes to Editors
Inward investment also is referred to as Foreign Direct Investment (FDI).

About the survey
The IBM -- Plant Location International group maintains a database of every publicly announced corporate location decision around the world in the areas of manufacturing, services and R&D since 2003. Besides client specific analysis for companies and economic development organizations, every year the group produces a report announcing an analysis of the corporate investment trends shown by the Global Investment Locations Database (GILD) for the previous year. For the 2005 report about to be published, the analysis was carried out on the January to December 2005 data between May and July 2006.

GILD is the leading corporate investment tracking database, allowing up-to-date representative trend analysis on a global scale by recording announcements and openings of new and expansion projects by companies. GILD is used by corporate executives to monitor which locations are preferred investment options for peer and other companies and to assess whether these locations should be considered for their own projects. Investment promotion and economic development agencies use GILD for accurate and up-to-date market intelligence to support their marketing strategies.

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