UNCTAD warns that strategic investment is becoming more concentrated
The US, Europe and China dominate strategic investment, leaving most developing nations unable to compete.
Investment in strategic sectors, including AI infrastructure, semiconductors, critical minerals and energy transition technologies, has surged over the past five years. According to UN Trade and Development’s (UNCTAD) World Investment Report 2026, these sectors accounted for 44% of global greenfield investment in 2025, up from 16% in 2020.
The report also highlights a growing concentration of investment among advanced economies. The three largest investor economies accounted for 72% of strategic sector project values in 2025, while the three biggest recipient economies attracted 56%. Low-income and lower-middle-income countries received just 10% of global greenfield investment in strategic sectors between 2020 and 2025, compared with more than 20% in other industries.
At the same time, manufacturing investment outside strategic sectors is declining. The value of announced greenfield manufacturing investment beyond these industries fell by 17% between 2021 and 2025 compared with the 2015–2019 period. The decline was particularly pronounced in developing and least-developed countries, where manufacturing has traditionally played a key role in building productive capacity and creating jobs.
The report also highlights widening differences in technological capabilities. The United States leads outward investment in AI and advanced technologies, while the EU has become the largest destination for those investments. China remains a major investor in critical minerals and downstream supply chains. Between 2016 and 2024, developed economies provided an estimated US$174 billion in industrial subsidies, compared with just US$19 billion in developing economies.
Why does it matter?
The report points to a structural shift in global investment that could deepen the divide between advanced and developing economies. Countries lacking the capital, infrastructure and skills needed to compete in strategic sectors risk missing out on the industries expected to drive future growth and productivity.
Rather than competing directly with the large subsidy programmes of major economies, UNCTAD argues that developing countries should identify targeted opportunities within strategic value chains, such as critical minerals processing, data infrastructure or regional manufacturing networks. Without stronger international cooperation and investment partnerships, the report warns that technological and economic disparities are likely to widen, with implications for global development and geopolitical stability.
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