A global dialogue between startup and FDI ecosystems

Developing a global dialogue between startup and FDI ecosystems to increase cross-border investment

 

Jacoppo  Dettoni, Deputy Editor, fDi Magazine – Financial Times, Carsten Borring, Associate Vice President Listings EMEA and Head of Listings & Capital Markets, NASDAQ Copenhagen, Dr Jarmo  T. Kotilaine, Chief of Planning and Monitoring, Bahrain’s Labour Fund and Sergio  Vella, Director of Financing and Investor Relations, ICEX-Invest in Spain, Bence Katona, CEO of Hiventures of Hungary and Jeffrey Steiner, President of the Ontorio Angels of Canada joined the round table on developing a global dialogue between startup and FDI ecosystems to increase cross-border investment at the 2020 World Congress – World Business Angels investment Forum 17 February 2020 Istanbul. It was moderated by Skalar Boštjan, CEO of the World Association of Investment Promotion Agencies (WAIPA).

 

Here you can watch the full session: https://youtu.be/18E43z3sUaI

 

In 2018, the estimated global Foreign Direct Investment (FDI) flows were $1.3 trillion, which is a 13% decline compared to the previous year. This is the third consecutive drop in FDI flows and the lowest level since the 2008 global financial crisis. The FDI slide is concentrated mainly in developed economies, which experienced a staggering 40% decline in FDI inflows.

 

By contrast, new types of investment – angel investment, venture capital (VC), corporate venture capital (CVC), sovereign wealth funds (SWF), family offices, and impact investments – offer new opportunities for countries to boost their development. VC and CVC investments in new companies with high growth potential are at record high levels, despite negative global FDI trends. An analysis of global venture funding by KPMG reveals a six-year growth in VC investments, reaching $254 billion in 2018. Additionally, CVC investments reached an all-time high, with corporations participating in 20% of all VC deals in 2018.

 

The digital revolution has had a profound impact on the overall global economy. Recent statistics show that half of the world’s population is online, and the internet industry has made a significant contribution to countries’ GDP. The agenda of the G20 leaders reveals that financial technologies will play a key role in increasing financial inclusion globally. The numbers confirm this. Worldwide investments in fintech jumped to $111.8 billion in 2018, a staggering 120% over the 2017 figure of $50.8 billion.

 

Early and post-early stage equity markets are developing rapidly as well. In 2018, 320,000 angel investors invested 9.8 billion EUR in Europe, and in the U.S., 340,000 angel investors invested $27 billion. The size of the global investment in early-stage businesses in 2018 reached $60 billion, up 20% from $50 billion in 2017.

 

These figures show that, worldwide, we have an increasing startup economy and a decreasing FDI economy. The implications of negative FDI trends are a significant concern for policymakers, as FDI is an essential element in a country’s efforts to stimulate and enhance economic development. It is particularly significant for the developing world and transition economies, owing to their need for capital to stimulate industrialization.

 

This panel seeked practical ways to develop a dialogue between FDI ecosystems and startup ecosystems to empower local economies through co-investment and to develop innovative financial policies that would enhance the capabilities of FDI and startup investors. It attempted also explore ways to encourage the FDI ecosystem to engage with the startup economy and ways to create a global awareness about the benefits of collaboration between the world’s FDI economies and startup economies.

 

Here you can watch the full session: https://youtu.be/18E43z3sUaI