The Covid-19 pandemic caused overall greenfield foreign direct investment (FDI) project numbers to decline by 17.5% in 2020. However, as the world reopened in 2021, investors reacted quickly and FDI levels rose by 18.1%, according to the Global FDI Annual Report 2022.  

Most sectors witnessed a rise in their number of projects, with companies keen to make up for lost time, yet the rise is not expected to be sustained. Investment levels will likely fall again in 2022. Russia’s invasion of Ukraine has led to heightened geopolitical tensions, a global cost of living crisis, slow economic growth and continued supply chain disruptions, all of which will claw back the resurgence FDI experienced in 2021. 

Education FDI rose in 2021

When it comes to greenfield FDI in education, our FDI Projects Database shows that there were 169 projects in education in 2021, up from 92 the year before. The 2021 figure was higher the 143 recorded in 2019, signalling the industry’s return to growth following the Covid-19 pandemic. 

Out of the 169 FDI projects in education in 2021, 96% were new, with the remaining being expansion of existing facilities. 

Where are the leading destinations for education FDI?

Asia-Pacific was the leading region when it came to attracting FDI projects in education in 2021, with 40% of all projects announced or opened globally.  

Asia-Pacific, the Middle East and North Africa, sub-Saharan Africa, and central and eastern Europe and the Commonwealth of Independent States were the regions that attracted more FDI projects in education in 2021 when compared with their pre-Covid 2019 figures. 

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India remained the leading destination country for education FDI in 2021. It received 29 inbound education projects – almost five times higher than the number it attracted in 2019. Australia was the key source market for education FDI in India in 2021, followed by the US and the UK. 

In 2021, Study Square, an Australia-based international student placement consultancy, announced plans to open new offices in several cities in India, including Ambala, Bangalore, Delhi, Guwahati, Kochi, Lucknow, Moga, Pune, Vadodara and Vijayawada. 

The United Arab Emirates, China, Egypt and Iraq were also key locations when it came to attracting FDI projects in education in 2021. 

What are the top education FDI operations?

Business and professional services became the leading business operation for foreign education investors in 2021. A total of 84 related projects were created in the year, up from 38 the year before. 

Training operations ranked second in 2021, although this business function attracted the majority of FDI projects when measured across the three years from 2019 to 2021. 

What are the top subsectors for education FDI? 

Education support services was the top subsector when it came to FDI projects in education in 2021. The subsector attracted 55 projects in the year, up from 23 in 2020 and 14 in 2019, placing ahead of the higher education subsector, which had topped the subsector ranking in 2019. 

India ranked first in attracting education support services in 2021, with 24 projects. A key investment was from Idp Education, an Australia-based international education organisation offering student placement services. It has opened new offices in several cities including Dehradun, Bhubaneswar, Bhopal and Rajkot. 

Where are the leading education investors located? 

The UK remained the leading source market for outbound education FDI in 2021. In addition, the number of outbound projects from the UK is growing. There were 39 projects in 2021, up from 25 in 2020 and ten in 2019. 

SI-UK Global, a UK-based international student placement company, opened new offices in several areas in this period, including Hong Kong, Indonesia, Kazakhstan, Morocco, Poland, Spain and Uzbekistan.

The US ranked second in outbound investments in 2021 with 28 projects, matching its pre-Covid levels. Investments from Australia, India and Singapore-based companies rose significantly in 2021 compared with 2019.

What does the future hold for FDI in education? 

The post-Covid recovery in the education sector has been much faster compared with other FDI sectors. The sector has attracted more projects in 2021 compared with 2019 levels and there are positive signs that this trend is set to continue. However, the Ukraine-Russia conflict and the range of geopolitical and cost of living problems afflicting countries all over the world will affect consumer demand, which could potentially impact the education sector. 

Download the full Global FDI Annual Report 2022 here.