In the race for knowledge competitiveness, the US cannot afford to let up speed. And with Asia coming up fast on the inside, Europe better step on it, says Courtney Fingar.

With China’s banking market predicted to outpace gross domestic product (GDP) growth in the next five years and efforts to stabilise the sector starting to bear fruit, foreign investors are moving in.

The Indian government has launched an ambitious $21.6bn project to improve urban infrastructure and basic services across the country.

An increasing number of US states and cities are joining their investment promotion competitors (European and worldwide) in the annual pilgrimage to the March MIPIM, the international real estate industry exhibition in Cannes.

At the end of January, another step was taken on the road towards corporate transparency with the publication of a report on bank lending in environmentally and socially sensitive areas.

Microsoft is considering a potential “mega investment” in Chile, according to reports in the local media.

Taiwan, having identified the nanotech sector as likely to stimulate growth in existing industries, has promised to invest $660m to develop the sector over the next six years.

The Gulf Opportunity Zone Act was signed into law in late December.

Cultural differences between west and east can make doing business fraught for those involved, and leave some westerners baffled. However, if both parties are prepared to get to know each other, build trust and be patient, the relationship can pay dividends, as Lawrence Yeo explains.

Legal challenges from the world of foreign direct investment.By Luke Peterson.

Amgen investment in Ireland and UK:
 California-based Amgen is to invest $1bn in new projects in Cork, Ireland, and will open a European development centre near London and additional facilities in Cambridge, UK.

Photronics Plant for South Korea:
Connecticut-based semiconductor equipment maker Photronics Inc is to build a photomask plant in South Korea in anticipation of a rise in demand for chip components.

Faurecia Plans US sites:
French car parts maker Faurecia has announced plans to open six facilities in North America in 2006 to increase its product offering to US automotive manufacturers.

Berlex Inc, the New Jersey-based US subsidiary of German drug manufacturer Schering AG, has set the stage for introducing to world markets a potential advancement in Crohn’s disease treatments.

Wal-Mart opened its first Supercenter in China 11 years ago and by the end of this year will have 36 outlets across the country. Karen E Thuermer reports.

Estonia may be small but this recent entrant into the EU is perfectly formed when it comes to e-government and economic management. Courtney Fingar talks to prime minister Andrus Ansip.

Tartu, Estonia’s second city, has 16 European twins. Mayor Laine Jänes is now keen to forge connections in the UK, as she tells Courtney Fingar.

In a morning meeting at her hotel in London’s Belgravia, Laine Jänes, the fresh-faced mayor of Tartu, Estonia, chats amiably over coffee about her first visit to the UK. She is clearly in networking mode.

Despite bold promises, the EU’s drive to become the world’s most competitive knowledge economy by 2010 has failed to gain any real momentum. Not only has Europe failed to close the gap with the US, it may soon be surpassed by Asia, says Courtney Fingar.

Five years ago this March, European Union leaders gathered for a summit in Portugal’s capital city and boldly vowed to make Europe the world’s most competitive knowledge economy by 2010.

NEW GERMAN chancellor Angela Merkel already has a long list of things to do to jump-start Germany’s economy, much less help accelerate the EU’s stalled Lisbon strategy.

As the cost advantages erode, IT investors are less sweet on central and eastern Europe than they once were. But the region still has its attractions, writes Jim Hydzik.

Rajesh Sharma and Daniel Grant detail the tax benefits associated with conducting research and development in the UK – and how bestto take advantage of them.

The votes for the first round of the European Cities and Regions of the Future 2006/07 have been counted. Charles Piggott reports on the locations that scored highest in the 28 individual criteria across the seven main categories.

REGIONS

CENTRAL EUROPE/AUSTRIA:

Winner: Vienna region

Cork offers investment incentives, skilled workers and excellent links, together with a high quality of life in a scenic setting.

Slovenia’s Pomurje region boasts all the qualities an investor could want.

Italy’s Lazio region is a major hub for the markets of central Europe and the Mediterranean.

The region of Rivne in Ukraine offers an excellent location, a skilled and educated workforce, and highly competitive operating costs.

Kocaeli, Manisa, Konya and Adana are Turkey’s top cities. And they are leading the country’s charge into the rest of the world.

Manisa, once home to ancient civilisations, today offers investors the most modern facilities.

An industrial powerhouse with excellent logistical links, Kocaeli also boasts a wealth of human resources and culture.

Strategically located at the crossroads of the Middle East and Europe, and host of many civilisations in history, Adana is one of the five largest economic, social and cultural centres in Turkey.

In little over a decade, shared service centres have become central in corporate drives for efficiency. As the concept matures, European locations are working hard to persuade investors that theirs is best for business, writes Karen E Thuermer.

The northern enclave of Kurdistan likes to stress its separateness from less stable parts of Iraq. But its economic fate is not entirely removed from that of the rest of the country. Tom Blass reports.

Anti-American sentiment is on the rise in South Korea and the US has a hard job ahead if its business in the country is not to suffer. Jeffrey Robertson reports.

A case has reached the US Supreme Court that may decide that state and local incentive regimes are unlawful. Prospective investors and development officials await the outcome with bated breath. Erika Morphy reports.

When agreements between investors and host countries break down, mediation can be a useful way to avoid the costs, bad feelings and negative publicity associated with litigation. Moina Varkie explains.

Breaking into the lucrative US market is full of pitfalls, even for UK companies sharing a common language and culture. In an economy as self-sufficient as that of the US, local help and advice could make the difference between success and failure, explains Hugo Williams.

The use of public-private partnerships to finance and run building projects is growing around the world. There are key lessons that those new to PPPs can learn from others who have already implemented them successfully, says Edward Farquharson.

US regions still dominate the rankings of the world’s knowledge economies but two contenders from Sweden and Japan have made great improvements. An UNCTAD survey has also shown that transnational companies from Japan and Korea lead a trend to invest in foreign R&D.

The pace of research and development (R&D) internationalisation may be accelerating, according to an UNCTAD survey of the world’s largest R&D investors.

Konya invites investors to come and benefit from its industrial

expertise, modern infrastructure and low-cost, skilled workforce.

India’s economic boom is being reflected in its surging real estate sector, helped by the government’s liberalisation of construction development rules. Karen E Thuermer reports.

Demand for China’s office space is healthy, even at the top end of the market. Randy White gives a round-up of the current trends and hot spots .

While Europe is not experiencing an all-out boom to rival that of the US, real estate experts are upbeat, believing there is still mileage in the market and that prospects for investment are positive. Karen E Thuermer reports.

There are still real estate investment opportunities in eastern Europe, but they are becoming few and far between – so the trick is to act quickly and ensure you do your research, advises Ewen Hill.

Demand for scarce office space, growth in residential developments and a tourist boom sparked by the decoupling of the peso are all making Buenos Aires a popular destination for real estate investment, writes Jason Mitchell.