Mounting Global tensions cause investors to seek stability
The 2025 Global Investment Report from UNCTAD - the United Nations organisation working on trade and development – shows that global FDI flows declined by 11% from 2023 to 20241, noting that “Rising trade tensions, policy uncertainty and geopolitical divisions risk making the investment environment even worse”.
In a context of heightened tensions, uncertainty and risk, investors will likely be looking towards countries that provide investors with predictable framework conditions, political stability and low geopolitical risk.
Denmark is generally considered a country with high degrees of political stability and low geopolitical risk. For example, the World Bank Political Stability and Absence of Violence/Terrorism Index2 ranks Denmark 10th in the world amongst countries with over 5 million inhabitants, and fourth among the EU Member States.
Moreover, the Danish economy is performing strongly, with economic growth of 3.6% in 20243, and was recently ranked fourth-best in the world for global competitiveness by the IMD. Reflecting Denmark’s position as an excellent place to invest, the total value of the stock of FDI invested in Denmark was estimated by UNCTAD (official corroborated figures will be published in the autumn) to have increased by around 40% from 2023 to 2024.
This suggests Denmark could be well-positioned to capitalise on heightened uncertainty which, as the UNCTAD reports concludes, “presents both risks and opportunities”.
The UNCTAD report also identified a number of other interesting global trends in the investment landscape: In particular, whilst total FDI flows declined by 11%, investment in the digital economy boomed, with growth of 107% from 2023 to 20244, whereas investments in the extractive sector and in infrastructure plummeted. According to the report, “At the sectoral level, investment in the digital economy and technology continues to act as a growth engine. Sectors such as artificial intelligence (AI), cloud computing and cybersecurity have attracted substantial investment. Data centre development is also expanding rapidly, driven by growing digital demand and strategic industrial policies”.
As a highly digitalised and innovation-oriented economy, for example ranking first in the EU on the European Innovation Scoreboard5 for research and innovative capabilities, Denmark is also excellently positioned to capitalise on this trend of strong investment growth in digital and high-tech sectors.
1 Excluding the inflating effects of volatile flows through conduit economies
2 Political Stability and Absence of Violence/Terrorism: Percentile Rank | Data
3 NYT: Markant BNP-fremgang i 2024 - Danmarks Statistik
4 In the number of announced greenfield projects, cf. page 22/table I.6