Lithuania into top 10 global investment locations
In the latest IBM Global Location Trends report, Lithuania has been ranked 10th globally for the number of jobs created thanks to foreign direct investment, a jump of 8 places on last year.
And according to Mantas Katinas, General Director of foreign investment development agency Invest Lithuania, this high level of job creation shows foreign investment is having a tangible impact on improving the economy. “The authors of the report argue that job creation is the best indicator to use when assessing foreign direct investment,” explains Mr Katinas. “Most organisations tend to assess investments in terms of fixed assets, with job creation underemphasised as a factor. The authors of the report note that up to 70-80% of foreign investments are spent on equipment and supplies sourced elsewhere, which have little effect on the economy of the country. In contrast, job creation measures the immediate economic impact since these jobs are filled by people living in the location,” Mr Katinas pointed out.
Lithuania is leading the region according to the report, with Estonia ranked 12th and Latvia 17th, whilst Poland failed to make the top 20. Macedonia and Serbia topped the rankings this year.
Lithuania is also ranked 10th for the added value created by new jobs from investment projects, a category which takes into account factors such as knowledge and skills transfer. Ireland, Singapore and Switzerland are also among the leaders in this field in 2016.
“Only two countries, Ireland and Lithuania, make it into the top 10 in both categories; the highest number of planned jobs per 1 million inhabitants and the level of added value created by these jobs,” highlights Mr Katinas. “Foreign investors into these countries tend to create better paid jobs that require higher education levels. This factor could be crucial in the future, as increased automation will have a negative effect on countries whose main advantage is a cheap labour force. Meanwhile, countries which boast excellent digital infrastructure, talented specialists and easy access to core markets may well benefit from the growth in automated production, particularly in the medium-term and long-term,” Mr. Katinas noted.
The report also singles out Lithuania as a top location for investments in financial services.
“The fact that Lithuania is seeing an increase both in manufacturing and in investments from foreign companies which employ higher added value specialists for a number of years is a good sign for the economy of the country. An economy should be balanced to enable every employee to find their place within in,” explained Lithuania’s Economy Minister Evaldas Gustas.
According to data provided by analysts from Invest Lithuania, 55 foreign direct investment projects were implemented in Lithuania in 2015. These projects will create over 3,140 jobs. Invest Lithuania attracted 31 of these projects, and the number of jobs they will provide is almost 2,650.