Feb #1 Trade News: 2022 FDI, Photonics, Cambridge Tech, Job creators, Electric vehicles, UK FTAs, Europe Mercosur, Sicily solar panels

fDi Intelligence 2022 Investment matrix

A new fDi Intelligence matrix shows hydrogen and cleantech leading the sectors with renewable energy attracting more FDI across all sectors for the third year in a row. Semiconductors & microchips experienced the second most investment after renewables.

Amazon was the largest single foreign investor in 2022. In 2022, more mega-projects worth more than £1bn were announced than in any other year, numbering 136 projects.

Oil & gas sector attracted significant investment in 2022 due to the global energy shortage caused by the war in Ukraine. At $57bn invested in 2022 it is more than 10 x the record low investment $5.4bn the year before.

Momentous supply chain restructuring initiatives and US policies such as the Chips Act have stimulated somewhat of a revolution in geopolitical motivations and capabilities in 2022.

Photonics market growth

Photonics © Kelvinsong via Flickr

Some sources expect the global photonics market to grow at almost 20% between 2022 and 2023 with 5 year growth estimated at 25%.

The popularity of silicon photonics which replace electric conductors is due to their efficiency transferring data in comparison as light travels faster than electricity.

However, photonics chips create much more thermal energy than electric components. Significant time and resources are now dedicated to reducing the heat generated such as the European Horizon 2020 Thermally Integrated Smart Photonics Systems project.

Due to the potential of silicon photonics to transfer data at ever increasing speeds it is a sector which is receiving much attention and investment globally. In addition the supply chain issues experienced globally as a result of COVID has accelerated investment into the sector.

Asia Pacific region is expected to experience the fastest growth in the global photonics market due to the high number of internet users in China and India.

Cambridge University top for tech

Cambridge © Cmglee via Wikimedia Commons

Cambridge University has been named the world’s top university for producing successful tech founders in a recent report ‘The Next Generation of Tech Ecosystems.’

500 Cambridge alumni founders have each raised more than $10 million in funding which is more than MIT, Harvard and Oxford.

Globally this puts the UK’s tech ecosystem third globally behind America and China.

The University states that its 12 week entrepreneurship mentoring programme called impulse is behind the successes where 1 in 2 students go on to start a business. Impulse alumni have raised £134 million of which around 20% is Government funding (Innovate UK) and the rest in private investments.

Biggest job creators of 2022

As a nation India was a popular destination for new inbound foreign direct investment in 2022. French consulting firm Capgemini announced an increase of 600,000 headcount to add to the existing 175,000.

Foxconn the Taiwanese technology Apple phone manufacturer has announced 53,000 new jobs in India as it diversifies away from China due to the negative affect China’s zero-COVID policy has had on output. It has also announced 30,000 more jobs in Vietnam in a new factory. Tata the Indian electronics company is the newest announced Apple manufacturer and has announced 60,000 new jobs in a new factory. Around 20,000 iPhones are sold each day globally.

Australian logistics company Logos has just announced 50,000 jobs to work in a new warehousing facility in Kolkata.

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Electric vehicle advances

Investment Monitor has released an article which states that software will offer the largest development in electric vehicle market capacity.

Despite a number of infrastructure and hardware challenges which impede the rapidly-growing EV market such as charging points and batteries, the article proposes that once these problems are solved, software advances will facilitate the furthest gains.

UK free trade agreements

The UK has 70 free trade agreements in place. The most recent agreements signed are Singapore Digital Agreement, Japan Agreement, and Norway Iceland Lichtenstein Agreement.

The UK has recently signed free trade agreements with Australia, New Zealand and Eastern & Southern Africa countries but these agreements are not yet in force.

The UK is currently under negotiation to enter 7 more free trade agreements being CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), India, Canada, Mexico, GCC (Gulf Cooperation Council), Israel and Ukraine.

The stage before starting trade deal preparation is consultation. Recently closed consultations include Korea and Switzerland.

Europe Mercosur trade agreement

The Mercosur states consist of Argentina, Brazil Paraguay and Uruguay. Mercosur has been in negotiation with the EU to enter a new trade deal. Negotiations started 20 years ago but have faced challenges and delays. An agreement was reached in 2019 on the basis of more protection of the Amazon rainforest and better access for South American agricultural producers.

The present moment is seen as a window in time when a deal could be signed as the new Brazilian leftist President is in favour of EU relations however Argentina goes to the polls in October so there is not much time to get a deal signed and ratified.

Left-leaning EU is keen to do a deal to diversify its supply chain away from China as it sees South America as an alternative.

Sicilian solar panel factory

Italian energy giant Enel has announced it will expand its solar panel factory in Sicily and provide renewable energy to the island.

Enel will invest €600m in the factory to increase capacity by 15 times current capacity.

The project is receiving funding from both the Italian Government and European Union of around a third of the total.

80% of solar panels are currently manufactured in China. The factory will be the largest in Europe after the expansion and will supply into Europe and export outside of Europe.