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Global Investors Confident in U.S. Economy, Not Government

August 21, 2014

Global investors are more confident investing in the U.S. than anywhere else in the world, according to a recent survey from Deloitte and the National Venture Capital Association (NVCA).  Confidence in the U.S. macroeconomy and U.S. investments has now grown for the third straight year and continues to lead among the 12 countries included in the study. Respondents, however, indicated that they had a negative opinion of the country’s investment policy environment. U.S. investors have the lowest confidence of any country in their government’s ability to enact policies favorable to domestic investment.

The 2014 Deloitte/NVCA survey incorporated data from 331 venture capital, private equity and growth equity general partners in 17 countries, polled in May and June 2014. About one quarter of participating investors were based in the U.S. Respondents were asked to assign a one-to-five rating to their confidence level on a number of investment-related topics, including global economic trends, national economic prospects, and industry sectors.

Global investors, as a whole, rated the U.S. the top country for investments, according to the findings. On the one-to-five confidence scale, the U.S. rated 4.03, with Finnish, Indian, Canadian and U.S. investors most comfortable with U.S. investments. Confidence in the U.S. has ticked up over the past few years, growing 4 percent from 2013 and 6 percent from 2014. Confidence also improved in the United Kingdom, Israel and Canada, while declining in Brazil, China and India.

U.S.-based investors remain more inclined to invest in the U.S. than anywhere else. Confidence was also high among U.S. investors for activities in Israel, Canada, the United Kingdom and Austrailia. Global investor confidence in Brazil fell substantially this year, with U.S. investors reporting 22 percent less confidence than in 2013. U.S. investor confidence in the U.S. economy was 3 percent higher than last year, and confidence in the global economy grew by 7 percent. U.S. investors are less positive than other global investors in the global capital market system. Americans have the lowest degree of confidence in global markets, but a fairly high degree of confidence in the U.S. market. They also expressed confidence in their fundraising ability, at home and abroad.

Global and U.S. investor confidence remain very high in the cloud computing and mobile sectors. While confidence levels for both sectors remained fairly stable, U.S. investors reported substantially higher levels of excitement for cloud and mobile investments. In fact, U.S. confidence in most sectors grew over the previous year, with the exception of the semiconductor industry.

Despite the largely positive expectations for U.S. investments and the U.S. economy, investors remain discouraged by the U.S. government’s inability to provide a favorable policy environment for investors. While investors have always had reservations about the government’s ability to support capital markets, confidence has fallen drastically over the past few years, dropping 13 percent in 2013 and 6 percent in 2014.

Deloitte and NVCA attributed the overall optimism among U.S. investors to a strong IPO market, a promising pipeline of companies and technologies and encouraging fundraising prospects.

Read the results of the survey…

capital, venture capital