Hi guys. Welcome back to Global Business Environment course two. This is module six, and we are in part two of Module Six, in which we are trying to understand what are the current trends and state of the global business environment. We've been talking about the rise and importance of the, many of the important emerging economies around the world. And that rise is not simply that the, the countries themselves are developing internally and becoming better off or more wealthy on their own. But this rise in the emerging economies around the world is reflected in their corporate importance across borders. And one thing we haven't talked that much about in the course is something called foreign direct investment. When we talk about companies going abroad, sometimes we've been talking about exports and imports, which is an example, or examples of trade selling one thing into another country across borders. Foreign direct investment is something different, and we discussed this a little bit when we discussed outsourcing. Foreign direct investment is when one company actually makes an investment and has control of assets across borders, a significant percentage of some ownership stake for example, in another foreign land. So we call that off-shoring in, in this other module in this course. An example of that would be if Nike makes builds a plant that it owns and has its own brand its own name on the, the building and they're Nike employees in another country like Brazil. Or if Samsung, a South Korean company, builds a research and development center in Ireland, that is an example of foreign direct investment. There's control of assets owned by one foreignly located and headquartered entity in this other location. And the rise of foreign direct investment over the last 30 to 50 years has been very significant. In fact I'd like to show you some data that will give us a little better sense for this rise in in foreign direct investment. One way to look at it is to see how much companies have invested in a cumulative sense across the globe. Total stock of investment. We call that, actually, a stock of foreign direct investment. And here's a list of countries by their stock of total investment around the globe. And in 2008, there was an estimate that there was significant stock cumulative value of investment across the globe over $16 trillion. And the United States of America leads that list with over almost $5 million of total cumulative value in investments abroad. And so, this is what historically we've seen, we've seen these developed economies. Great Britain is the next or the United Kingdom is the next nation ranked second. But it's these developed economies which have dominated this list and that historically have been so involved in investing across the world. And we haven't seen the data yet but mostly it's been these countries investing in other similar countries, other developed economies. For example, American country, companies investing in Europe or Japan. And Japan, and we see is a significant investor. It's been Japanese companies investing in the United States and Europe. One of the most significant things about the rise of these emerging economies, whether they're BRIC, or MIST, or MINT, is the significant amount of investment these, that these companies from the foreign from, from the emerging markets of the world have across borders. For example, China has over half a, a trillion, over $500 billion worth of investment in cumulative value across the globe. It is made major acquisitions or its companies have made major acquisitions all across the globe. For example, they've bought American companies, they bought Euronki, European companies. Made investments in Africa, Latin America. And so this again was if we look 30 years ago was almost nothing. And so this is why when we look at the BRIC nations, we're, we're, we're trying to emphasize, and we see Russia here as another important emerging economy. We see South Korea and Brazil and Mexico, all, and India, are all, about in the top 25. And then we saw South Africa, which sometimes is included with the BRICS. So we see this major cross border complex web network across the world of, of companies that have, of, from foreign countries making investment in other countries. As we go down the list, we see some countries that aren't very involved in foreign direct investment. Some of them are quite small nations. Some of them are nations that might surprise you that you would expect to have had made more investment across boarders. But this reflects a lot of things about our world today. You can't go almost anywhere without seeing some evidence of a foreign brand, or a foreign facility, almost in any country in the world. We don't see a completely domestic dominated industries when we travel the globe. So the next time you have the chance to see that on some type of media or actually go there, pay attention to what you see and to the brands. Sometimes we think brands are from our home country but in fact are owned by some foreign entity from obviously a foreign country. And so, this rise is very significant. What we'll look at next time is the change in the the value of investment received by host countries around the globe over the last decades, and see where we are today in terms of the stock or value of foreign direct investment received. And so this will end part two, and we'll see you back very soon next time and talk more about this subject. Thank you very much.
