According to an FDI survey by Investment Monitor in the first quarter of 2023, 48% of respondents preferred to use a law firm or a trusted intermediary as opposed to going direct to a free zone or IPA. This proves that more work needs to be done to show that IPAs are a trusted source of objective insights that enable a prospective investor to make informed decisions pre-expansion; and not simply a one-stop shop to enable companies to expand once confirmed.
Investment promotion agencies must adopt a dynamic, digital, and data-driven approach to attracting FDI.
In today’s rapidly changing global economy, foreign direct investment (FDI) has become a critical component of economic growth, development and innovation. According to a report by EY, foreign-owned companies can account for up to 50% of a country’s research and development. However, with competition for investment intensifying, international promotion agencies (IPAs) are increasingly seeking new strategies and approaches to attract and retain foreign investors.
One such strategy is turning to embrace digital. As the digital age continues to transform the business landscape, digitalisation has emerged as a key driver of FDI attraction. Today’s investors are savvier than ever before. The IPAs that can tell a coherent, data-led story and reach more potential investors through the latest digital platforms have a clear advantage. This also involves leveraging company insights, macroeconomic data and digital platforms that use AI-driven tools and dashboards and real-time data about new investors showing an intent to invest.
By adopting this ‘triple D’ approach – dynamic, digital, data-driven – IPAs can unlock more opportunities in new markets proactively.