Strengthening Investment Policies Beyond the Crisis

Transcription

1 Strengthening Investment Policies Beyond the Crisis - Leading Through Uncertainty Barry Condron Strategy Partners Ireland 1

2 Background Background and experience Some initial observations - MENA and other regions Actions of the top IPA performers What attracts the investor, including the soft factors Innovation challenge for IPA s Developing Special Economic Zones issues to consider Summary 2

3 IPA Role - The Four Pillars Establish and Grow Businesses Sectoral Expertise Guide to State Services Principal Contact for FDI/investor 3

4 Summary of Views IPA s pursuing a defensive strategy will fare less well in the longer term. Revise policies, seek new sectors, innovate. Current focus by many Governments is on fire fighting but will move on to economic stimulus IPA s must prepare and lead from the front Public concern how will the evolving economic environment affect them and expectation that Government can help Prepare to seize the opportunity to develop new business avenues Be flexible, aware and resilient 4

5 Initiatives The winners will be IPA s who make thoughtful choices by assessing alternative scenarios honestly, considering their implications and preparing accordingly Focus on what gives you a competitive edge such as skills, technology, infrastructure, finance, incentives, location etc Be aware of the dead hand of bureaucracy and pursue your objectives honestly 5

6 Challenges of Developing Countries... Absence of a national development strategy, unfocussed sector development, lack of relevant skills. Lack of coordinating between IPA s and other development agencies and Government organisations. Underutilisation and poor link up with educational institutions. Poor marketing and promotions at both national and international levels initial burst of enthusiasm but poor follow through. 6

7 Limiting the Pace of Development No one-stop-shop approach to business development No commitment to life long learning and developing an adaptable workforce Underutilisation of the Diaspora, international connections, existing leads etc No SME focus, JV opportunities missed and existing investors largely ignored Inertia and poor use of advisors and consultants 7

8 Why Attract Foreign Direct Investment Promotes industrialisation, business development and new opportunities Creates much needed employment at both national and local level Helps develop SME s and business clusters and introduces JV and technology transfer opportunities Generates wealth, jobs and foreign exchange for the host Government Contributes to balanced regional development and investment 8

9 Competitive Environment The marketplace is crowded, competition fierce All developing countries see FDI as a means of enhancing and developing the industry base. Implications for SME development as well Each of these counties have an incentive programme and usually some competitive advantage There is a need for clarity in identifying precisely what is on offer and that it can be delivered! 9

10 INVESTMENT PROMOTION PIPELINE 10

11 Actions of Top IPA Performers Clear Mandate and Strategy. Negotiations/incentive process managed by a single agency or single point of contact Immediate and professional response to enquiries, with consistent follow up and response to detailed questions A comprehensive system for industry/business sector research and knowledge. Staffed by personnel with business experience Supply of high quality reliable, business related information, statistics etc. Ability to complete negotiations in a speedy and professional manner 11

12 Influencing Factors for Investors Political stability and ongoing Government support and contact Availability of suitable skilled personnel, sites/buildings/business Parks with a range of options Affordable communications and good linkages with existing industries and educational institutions Lower cost base for doing business Management capability and potential to grow Investment Promotion Agency (or equivalent) available to help with day to day issues 12

13 Subjective Soft Factors Attractive business environment for companies and employees Professionalism and hospitality of hosting IPA and other related Government agencies Attractive towns and cities where their key personnel can live and develop Quality of life, cost of living, security, transportation etc Personal ties or historic links (Diaspora) Competitive rents and flexible lease/ purchase terms 13

14 Investor s Choice of Location - Summary Market access - national, regional, global Labour availability (skills, favourable regulations) Strong support from educational institutions Good infrastructure, communications Property buildings/offices, serviced sites, quality business Parks for ICT companies Low development costs Raw material availability for some industry types 14

15 Characteristics of an Innovative Organisation Innovation requires companies & individuals to : Take Risks Endure Uncertainty Accept Failure Encourage Diversity and Cross Fertilisation Have more porous boundaries Identify and challenge Organisational Dogma Empower Autonomy, Trust and Democracy Champion Creativity 15

16 The IPA Innovation Challenge For each and every one of us as individuals to: View Innovation in everything we do as the key to our success Embrace and value innovation characteristics Constantly look where each one of us can make a change for the better Respect every innovation no matter how small 16

17 Creativity: The ability to use the imagination to develop new and original ideas or things Innovation: Is the result of creative activity that implements those ideas and turns them into organisational and marketplace reality 17

18 Fostering Innovation in IPA s Is not just about R&D, science and technology but is equally relevant to and can impact in every area of business such as: - Business development - International Marketing - Public Private Partnership - Supply Chain Management - Sectoral strategies - Leadership Development - Commercialisation - Customer Support/OSS - New Market creation - Organisational Design - etc 18

19 IPA and Innovation Ongoing success is derived from it s ability to: Be exceptionally innovative internally Drive innovation in national enterprise policy Act as a catalyst for client innovation Innovate the country product to win investment 19

20 In Summary. Advocate policy changes needed to improve investment climate; Focus on sectors which can maximize net economic gain; professionally promote sector benefits through innovative promotional events in target markets; Fully service needs of investors, improve country image and generate investment; Develop and implement investment promotion strategy and develop skills to successfully implement same Building robust and effective public and private partnerships, promote regions, involve all stakeholders 20

21 Thank you for your attention Barry Condron Strategy Partners Ireland 21

22 Developing Special Economic Zones (SEZs) Start with a basic marketing rule If you cannot sell it, don t make it Make sure you have a high level political sponsor before you start Any worthwhile strategic plan must give significant attention to the marketing and branding of a proposed SEZ. We tend to overlook the marketing plan because the challenges are often huge and daunting! An effective marketing plan can be both successful and cost effective but you must be committed for the long haul attraction of FDI is a slow process 22

23 Developing Special Economic Zones (SEZs) Seek the advice of other Zone developers, consultants, NGO s, other country experiences and then make up your own marketing plan don t depend on others to do it for you Remember the international market for FDI is highly competitive and the failure rate of SEZ s are high No harm in imitating - see what other SEZ s are doing and then do it better SEZ s must engage with the outside world in a clear, coordinated and communicative way if they are to obtain political and public support and win FDI 23