The latest UNCTAD IPA Observer highlights the critical role of investment promotion agencies during the COVID-19 pandemic. It looks at how the agencies have transformed, and which changes are likely to stay after the crisis.
The current COVID-19 crisis has brought to light the critical role of investment promotion agencies (IPAs). They have shown agility and reactiveness in supporting the evolving needs of investors during the pandemic and have been instrumental and valuable to governments as intermediaries between the pubic and private sector.
In the past months, IPAs have continued to strengthen their online presence. A total of 77% of national IPAs worldwide have provided COVID-related information and services online as they developed specialized virtual platforms and tools.
The response, however, has been asymmetric, and differences in their digital capacity, culture and resources have surfaced. While developed countries are multiplying their digital channels of communication on COVID-related business issues for investors, 44% of national IPAs from developing countries provided no or little information for investors about the pandemic on their websites or social media channels.
The offering of investment facilitation and aftercare services by IPAs has expanded, with an increased focus on strengthening linkages between foreign companies and the local economy. The enhanced role of IPAs as troubleshooters and business support institutions will likely remain after the pandemic.
After focusing almost exclusively on providing retention and aftercare support to existing investors during the past few months, IPAs are now promoting investment help to restart economies. The new focus is on traditional as well as emerging opportunity areas linked to renewed national priorities and a growing demand in sectors such as health, food and agriculture, and tech-related sectors.
IPAs are investing in data to strengthen their functions, including a more robust policy advocacy role. It is a “make or break” moment for them. They are expected to more with less – and differently. How they perform during these critical times and how relevant they are seen by their governments and the investment community may determine their future post-pandemic.