overview of the latest trends in investment promotion hugues de cibon oco global, paris belgrade,...

Overview of the

latest trends in

Investment promotion

Hugues de Cibon

OCO Global, Paris

Belgrade, March 2015

2

FDI will not be the same again andneither will the organisationsmandated to attract investment– Fragmented market

– Sectors, sources and modes ofinvestment are changing

– Smaller and specialised projects

– Decreased appetite for risk

– More intense competition forthese projects

EDOs & IPAs need to revisit strategy, targets and ways of engagement in the new landscape

Summary

3

Implications

FDI

Market

Specific

Competitive

Advantages

Strategy Organisation Marketing

4

Segment choice – a strategic step

Automotive Energy Agrofood ICT …

HQ / Regional HQ

R&D ?

Design

Components manufacturing ?

Systems manufacturing ?

Integration / Assembly ? ?

Logistic

Service centers

Back-offi ces

…

Sectors

Functions

5

Segments choices have to be based on :

Full understanding of the value chain

Good knowledge of companies requirements

Awarness of my competitive position for each key factor

Market potential

6

Objectives– quantity (capex, jobs…) vs.

quality (added value, impact…)

Targets– countries – brIC…,

– sectors – "hybrid" sectors…,

– activities – data centres, training centres, KPO…,

– companies – strategic companies, key accounts, start up

– Talents, Financing (VC), Support services,"Global References"…

Performance measurement– productivity

Strategy

7

Processes – and Services– setting-up:

• "strategic projects" vs. "fast-track",

• "soft landing" / “welcome package"

– alternative forms of FDI:

• M&A

• scientific collaborations

Partnerships – with partners who can provide specialist content and expertise…

and who have a stake in the outcomes

Outsourcing

Organisation

8

Pipeline qualification andstrategic company assessment– business intelligence

Message:– "solutions":

• tailor made information package, benchmarking, simulations, testimonials, case studies…,

Channels:– social media

Marketing

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Merge with innovation support organisations Merge with trade organisations Stronger commitment with local companies and sector

organisations Innovative marketing to face stronger competition Partnership with local clusters More attention given to entrepreneurs, talents, …

Trends in IPA observed

An overview of the Balkan IPOs

• Albania• Bosnia-Herzegovina • Bulgaria• Croatia• Kosovo * (under UN Security

Resolution 1244) • Former Yugoslav Republic of

Macedonia• Montenegro• Serbia• Slovenia

1995-2000 2001-2005 2006-2010 No information

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3

2 2

Year of Creation

Years

N° o

f IPA

s cr

eate

d

No specific peak in the creation of the investment promotion organisations (IPOs) surveyed

…but some have been restructured and transferred to Governmental bodies/Ministries or merged with other economic development organisations

Year of Creation

11%

22%

33%

33%

Budget

Less than €500,000

Between €500,000 and €1M

Between €1M and €5M

No information

Structure

Most of the IPOs have limited budget and human resource in respect to the cost of doing investment promotion internationally and compared to their competitors of other regions

Public89%

Public-Private11%

Funding

Structure

FDI44%

FDI+Trade22%

FDI+Trade+SMEs

11%

FDI+Trade+SMEs+Innovation

22%

Type of Missions 45% of the IPOs dedicate their efforts

exclusively to investment promotion

The remaining 55% offer complementary services such as:

Trade (export) SMEs support Innovation & Technology transfer Financing/Public Private Partnership

…following a global trend based on both strategic (synergy between economic development missions and tools) and tactical (budget) considerations

Targeting

Most of the IPAs claim to work on: 7 to 10 “strategic” sectors … which is a high number of projects for

agencies which have limited budget and staff

The most common sectors are: ICT Automotive Metals & Machinery Agri-food Textile Logistics

Limited interest for BPO and Pharma

No information11%

1 to 4 sectors11%

5 to 9 sectors56%

10 and more22%

Sectors Targeting

Targeting

Auto Metals

Agro-food

Wood Textile

Pharma

Energy

Logis-tics

Electronics

ICT BPO & SSC

Tou-rism

Others

Slovenia

Croatia

Serbia

Montenegro

Bosnia-Herz.

Albania

Kosovo*

FYROM**

Bulgaria

** Former Yugoslav Republic of Macedonia* Kosovo (under UN Security Resolution 1244)

Structure

Three of the nine IPOs that were researched had offices overseas

Nevertheless, these representations also have multiple functions such as trade and are not 100% focused on FDI.

The countries for international representation remain in the European region

Other countries covered are: USA China, Turkey and Russia

The IPA with the largest number of representation abroad is Former Yugoslav Republic of Macedonia

with around 18 points of contact abroad, covering 22 countries

Yes33%

No67%

International Offices

Communication

Almost all the agencies provide detailed sector information.

Most of the IPAs include success cases or testimonials as one of their selling strategies

About 45% of the agencies have designed interactive tools for cost/site selection simulation

Sucess cases Interactive tools Detailed sector info.

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4

8

3

2

7

1

Website Information

Yes Partial No

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Hugues de Cibon

Deputy Director,Paris

T: +33 (0)1 43 87 56 40

E: hugues.decibon@ocoglobal.com

OCO Global Ltd (Head office)

6 Citylink Business Park - Durham St.

Belfast BT12 4HB, Northern Ireland

OCO Global (Europe)

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75009 Paris, France

OCO Global (North America)

45 Broadway – 21st FloorNew York, NY 10006, USA

OCO Global (UK)

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London, EC4Y 8BH, United-Kingdom

OCO Global (Asia)

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« Strategic target company » – UKTI

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« Proposition » – Kansas City, MO

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Co-branding – IDA Ireland

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Welcome package – BIE Bruxelles &Recruiting Package – Berlin Partner

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BDD & Mapping – ProMexico & UKTI

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Dedicated incubator (/per geography) –AWEX Wallonia

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Support services – Invest in Finland

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EDO/IPA Positioning – ITD Hungary

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Webinars – SDI Scotland

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Social media – Enterprise Florida

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Apps – Berlin Partner