European Future Cities and Regions 2027 Selection: Insights into the New Competitive Landscape for Attracting Foreign Investment in Europe

The Investment Logic Behind the Selection

In February 2027, fDi Intelligence will release its flagship report "European Cities and Regions of the Future 2027," providing a systematic ranking of the economic strength and investment promotion capabilities of cities and regions across the European continent. Based on the announced selection categories, six major dimensions—Economic Potential, Cost Effectiveness, Human Capital and Lifestyle, Connectivity, Business Friendliness, and FDI Strategy—precisely reflect the core considerations of multinational enterprises in their location decisions in the contemporary era.

As an important destination for global foreign direct investment (FDI), Europe is undergoing a profound restructuring of its competitive landscape. Traditionally, Western European cities have long held advantages due to mature markets and infrastructure, but in recent years, the rise of Central and Eastern Europe has attracted manufacturing and service greenfield investments with better cost effectiveness and policy incentives. This selection is not only a ranking of locations but also a mirror reflecting the structural changes in the flow of global capital within Europe.

The Signaling Significance of the Selection Criteria

**Economic Potential** assessment focuses on market growth and innovation vitality, which is closely related to the divergence in Europe's post-pandemic economic recovery. Southern European countries are gradually recovering, while traditional engines like Germany face industrial transformation pressures. The shifting rankings among cities will reveal the migration of growth momentum.

**Cost Effectiveness** remains a key factor in manufacturing relocation. The relative advantages of Central and Eastern European cities in labor costs and tax incentives continue to attract the layout of industrial chain segments such as automotive and electronics. However, pure cost competition is giving way to comprehensive efficiency—automation and digital capabilities are beginning to offset differences in labor costs.

**Human Capital and Lifestyle** has become the primary consideration for high-end services and R&D investment. Cities like Stockholm and Berlin attract tech giants to establish innovation centers through high-quality education, diverse culture, and livable environments, while second- and third-tier cities compete for spillover talent by improving quality of life.

**Connectivity** covers transportation, digital infrastructure, and international flight networks. High-speed rail and 5G coverage are changing the investment attractiveness of "peripheral regions" within Europe. For example, Łódź in Poland, leveraging its status as a railway logistics hub, has become a hotspot for e-commerce warehouse investment.

**Business Friendliness** reflects institutional competitiveness. Countries with streamlined administrative processes, stable regulatory environments, and transparent tax systems, such as the Netherlands and Estonia, have consistently performed well in past rankings.

**FDI Strategy** is included as a separate scoring item for the first time, highlighting the importance of the initiative of Investment Promotion Agencies (IPAs). Based on the detail in the materials inviting IPAs to submit strategy questionnaires, it is evident that fDi Intelligence is promoting a shift in evaluation from static indicators to dynamic capabilities—the success of a region in attracting foreign investment increasingly depends on its proactive marketing, targeted industry selection, and post-investment services.

New Focal Points of Regional Competition

Through the selection framework, several key trends in European FDI competition by 2027 can be anticipated:- **Green Transition and Sustainable Investment**: Driven by the EU's Carbon Border Adjustment Mechanism (CBAM) and the Fit for 55 policy, cities in Northern Europe and the Iberian Peninsula with abundant renewable energy will attract more clean technology investments. - **Nearshoring and Supply Chain Resilience**: Eastern European countries, benefiting from geographical proximity, skilled labor, and EU integration, continue to take over capacity relocated from Asia. - **Deepening Tech Clusters**: Megacities like London, Paris, and Munich remain hubs for venture capital and digital innovation, but cost-of-living pressures are driving some R&D activities to second-tier cities such as Porto and Krakow. - **Geoeconomic Rebalancing**: Following the Russia-Ukraine conflict, the Baltic states and Poland have further strengthened security and energy resilience, attracting defense- and energy-related FDI.