UAE primed to convert FDI inflows into economic velocity, says new report

The UAE has built one of the world’s most successful models for attracting foreign direct investment (FDI) and is now positioned to convert that capital into lasting innovation and skill development, according to a white paper from White Paper Media Consulting (WPM), a UAE-based strategic research house that is shaping business and policy conversations in the region using credible datasets and analytical tools. 

Beyond the Numbers: The Transformative Intangible Impact of FDI argues that the real returns on FDI now lie in the intangible value it embeds within host economies, with the UAE a defining case study. The paper contends that the next phase will go beyond investment volumes, number of projects, and job creation and be measured also in patents generated, skills transferred, data ecosystems built, and clean technologies commercialized, among other things.

Official data shows that the UAE attracted more than $48.3 billion in FDI inflows in 2025, capturing 3.1% of global flows. Greenfield FDI reflected both volume and capital depth, with 1,562 projects announced for a combined $34.1 billion in capex, or 1.8% of the global total.

The country’s ability to attract investment reflects its competitiveness as a hub for operational efficiency, supply chain integration, and regional headquarters functions. The UAE has deliberately repositioned its FDI strategy toward knowledge-intensive and future-oriented sectors, recognizing that long-term competitiveness is increasingly driven by innovation, digital capabilities, and human capital. This approach aligns closely with the OECD FDI Qualities framework, with tangible examples across each dimension: including the innovation and competitiveness, digitalization and technology adoption, sustainability and clean energy investments for climate targets, and human capital and local expertise.

Drawing on the OECD framework and benchmarks from Ireland, Singapore, Israel, Costa Rica, and Malaysia, the report documents how leading economies have shifted focus from the volume of capital they attract to the long-term value it creates. In the context of UAE, this is visible in the shift in the country’s policies across phases that begin with the Foundation Phase from 1985 to 2005 of Market Liberalization and Infrastructure Creation, culminating in the current positioning as Global Capital and Technology Hub.

The shift to value in the UAE has made a huge difference to the job-creation intensity of FDI. Approximately 2,816 jobs were created in the UAE for every billion dollars received in greenfield FDI in the five years from 2019 to 2023, compared to 2,265 in the previous five years. This is higher than the OECD average of 2,318 and 1,880 respectively.

The paper identifies seven ongoing policy shifts that deepen the qualitative impact of FDI in the UAE, including extending spillovers from free zones into the mainland economy, prioritizing R&D-intensive investment, embedding skills transfer requirements in major projects, and positioning the country as a global leader in IP creation and data governance.

Yazad Darasha, co-founder and director, WPM, said: “As trusted partners of public and private sector clients, we have tracked the UAE’s investment story for years, and the pattern is unmistakable. The country has positioned itself at the front of the race for capital. What we set out to map in this paper is the harder, more valuable contest: converting investment into skills, technology, and economic velocity. It reflects what we do at White Paper Media, turning complex evidence into decisions leaders can act on.”

Dr. Joachim Arnold, CEO of OCO Global, which advises governments and businesses on attracting FDI, building competitiveness, and strengthening economic resilience, and contributed to the study, said: “The UAE’s infrastructure, free zones, and business-friendly environment helped attract companies and drive growth. The National Investment Strategy 2031 signals a more deliberate focus on investment that raises productivity and embeds benefits into the wider economy. The question is no longer only how to attract capital, but how investment creates lasting value, strengthens existing companies, and helps domestic businesses upgrade their capabilities.”

The paper highlights live examples of this transition already underway, among them the Space42 and ICEYE joint venture building satellites on UAE soil, Microsoft’s $15.2 billion investment plan with a commitment to skill one million people, and the UAE’s $30 billion pledge to the Alterra climate fund.