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Legacy of Investment

    Looking at investment activity for both 2004 and the first two quarters of 2005, as recorded by the European Investment Monitor, almost all large-scale investments with 1,000 or more new jobs are going to CEE countries, with 40 percent of large-scale projects being in the automotive sector. Strong destination countries of large-scale projects are the Czech Republic and Russia.
      Decision-makers overwhelmingly view the service and software sectors as the future drivers of the Western European economy, and not surprisingly, these were among the most dynamic sectors during this period. The U.K., France, Germany, Sweden and Spain head the list of software destinations and, as the U.S. still accounts for two thirds of those projects, Lhermitte does not see these locations changing. "Software companies look for R&D, proximity to OEMs, high-volume, low-cost production and access to capital due to the high need for financing and investors."
      While such investments are on the wish list for CEE, Lhermitte believes that they are at least five years away from having the necessary education, language skills, labor productivity, telecommunication and infrastructure. Also, leading software companies such as Microsoft and SAP tend to invest in regions where their products and services are most prevalent. SAP invests in markets with its integration systems, which are mostly Western Europe, Asia and the U.S., while Microsoft is more research-focused.
      With centers of innovation, clusters of universities, capital and research in established EU countries, moreover, it is not surprising that these markets are in a strong position to continue to lead the way in terms of developing them into sectors such as software, biotech, electronics, fashion and design. Foreign investors, meanwhile, continue to enjoy the strengths and diversity of the European region as a whole. Site Selection
      Julia Cox is founding partner of Oxford Intelligence ( and a member of Site Selection's Editorial Advisory Board. Ernst and Young's European Investment Monitor, powered by Oxford Intelligence, is the most comprehensive source of information on foreign direct investment projects throughout Europe. For more information, visit:

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©2005 Conway Data, Inc. All rights reserved. SiteNet data is from many sources and not warranted to be accurate or current.