Europe becomes more attractive but competition from high-growth countries is sharp. Inward investment rebounded in Europe in 2010 with a record number of projects according to Ernst & Young's 9th annual European Attractiveness Survey. This report combines an analysis of international investment into Europe over the last year with a survey of over 812 global executives on their views about how and where global investment will take place in the next decade. Across Europe there was a 14% increase in projects from 3,303 in 2009 to 3,757 in 2010. The majority of the 43 countries in Europe whose inward investment is measured by the survey showed an improvement. The number of new jobs created across Europe as a result of these investments was also up by 10% to 137,000. Investment from Asia (particularly China, India, South Korea and Japan) significantly increased in Europe. Investment from South Korea is a good illustration of the Asian zone investment dynamic in Europe. In 2010, South Korea was responsible for launching 67 projects and creating 4% of jobs (5 147 new jobs). According to Marc Lhermitte who headed the study, “after a significant fall in investment at the peak of the crisis, investors are returning in force to Europe, following on from the US. Investors from-growth countries, mainly China and India, also chose to set up in 43 different European countries in 2010 and. Although the UK and France remained the most attractive countries for investors with 728 and 562 (Foreign Investment from Abroad) FDI projects a growth of 7% and 6% respectively, the real success story for 2010 among the major European economies was Germany whose project numbers rose by 34% to 560 in 2010 challenging France for second place. Countries in Central and Eastern Europe saw strong growth in 2010 with Russia, Poland, Hungary and the Baltics all recording double digit growth in the numbers of projects reflecting the strong economic recovery in the region and its growing attractiveness to business. Portugal, Greece and Spain, however, all saw a decline in project numbers and the latter was overtaken by Russia as the fourth largest recipient for FDI in Europe. By contrast Ireland saw a 36% growth in projects in 2010 underlining its long-term competitiveness in terms of tax rates and a highly skilled workforce. Sectors that were hit in 2009 with a decline in FDI projects saw a significant rebound in 2010. Investments in the automotive sector doubled in 2010 and provided 25% of the jobs created by FDI projects in Europe. FDI projects in business services and software also went up by 15% with a 65% increase in jobs created. Europe also attracted 204 projects in renewable energy in 2010, up 29% on the previous year. Not all sectors saw an increase: Food (-11%), Pharmaceuticals (-12%), Minerals (-9%) and Telecoms (-10%) which did comparatively well in 2009 all saw a decline in project numbers in 2010. The recovery in investment from the United States was a significant component of the improvement in the overall inward investment picture into Europe in 2010 with a record number of projects - 972 - announced. Other countries that showed a strong improvement in terms of intra-European investment included the UK, Switzerland and the Netherlands. Outside of Europe the numbers of investment projects from India and South Korea showed the most significant increase (up 32% and 148% respectively). Investors are more optimistic about prospects for 2011. Research highlights a 5% increase this year in the number of companies looking to invest in Europe and a 6% fall in the number of investors with no plans to do the same in Europe. A third of those interviewed said they intended to invest in Europe this year with half looking to expand existing operations and a quarter planning an acquisition or joint venture. In the next two years investors believe that IT and cleantech will be the strongest drivers of European growth. China remained the most attractive place in which to establish operations. Looking three years ahead, investors remain confident in Europe with Western Europe ranking joint first with China. India and Brazil have also seen slight increases in terms of their attractiveness to foreign investors. (I.L.trans/fl)