McKinsey Global Institute

Shifts in greenfield FDI are shaking up the industries of the future and rewiring global trade. Geographic distance is easy to understand: look at a map and countries that are eight centimeters apart are obviously more distant than those three centimeters apart. “Geopolitical distance” is a more sophisticated idea: it refers to how closely aligned trade and investment partners are. Japan and the United States, for example, are close geopolitically. Germany and Russia are not, write Olivia White and Tiago Devesa in Foreign Policy.

From electric vehicles and generative AI to modular construction and obesity drugs, new industries are transforming economies and societies worldwide. To seize these opportunities, developing countries must create welcoming business environments, attract foreign direct investment, and invest in human capital, write Kweilin Ellingrud, Kevin Russell, and Suhayl Chettih in Project Syndicate.

Europe must boost investment. Its productivity and competitiveness depend on it – as do its future wealth and debt sustainability. Europe, like much of the rest of the world, still faces a bloated balance sheet. Its assets have ballooned faster than its productive output for more than two decades now. And as the world’s wealth grew to an unprecedented $600tn this year, the eurozone’s wealth also climbed to $135tn – 6.6 times its GDP, write Tiago Devesa, Jan Mischke, and Sylvain Johansson in Friends of Europe.