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Why Investment Promotion Agencies Need To Expand Their KPIs

Direct and indirect contributions of IPAs Investment promotion agencies (IPAs) can contribute a tremendous amount to the society and the location they represent. Besides their core mandate and KPI of attracting capital and creating employment, they are increasingly being asked to contribute to a wider range of economic and social objectives, including innovation, digitalisation, regional development, inclusiveness, sustainability and talent attraction.

Yet in most of the IPAs around the world, the number of jobs created as a result of foreign direct investment is the main KPI used to measure their impact. A recent study released by FDI Center reviewed a sample of IPA performance reports from around the world. The study showed that the KPIs used most frequently by IPAs are the value of the investment, creation of employment and the number of projects.

However, the knock-on positive effects of FDI include indirect employment, exports, taxes, training, opportunities for local businesses and many more. To not report on a broader range of indicators is to miss an opportunity to truly capture an IPA’s wider impact and value added.

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