Economics

Aug 13, 2026 Jan Mischke , Anna Kortis, and Chris Bradley

The balance of global investment has shifted dramatically over the past three decades, with China emerging as the leading destination for productive capital. Europe and the United States can still narrow the gap, but only by making it cheaper and easier to build, operate, and innovate.

ZURICH—Ask what makes a country competitive and you will drown in answers. Existing frameworks, including those used by the World Bank, rely on hundreds of indicators. In new research, we propose a simpler measure: investment. Where companies choose to build their next factory, laboratory, research center, or power plant is the clearest indicator—and the ultimate test—of competitiveness.