ifi-inverstment promotion essentials

8/14/2019 IFI-Inverstment Promotion Essentials

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IN PRACTICE

Most governments depend on investmentpromotion agencies, economic developmentboards, industrial development agencies, andother investment promotion intermediaries(IPIs) to compete globally or critical oreigninvestment and the development benets itbrings. Te Global Investment PromotionBenchmarking 2009 study empirically assessed213 IPIs in 181 countries, yielding a ranking o

eectiveness in investment acilitation. Using amethodology pioneered by the MultilateralInvestment Guarantee Agency (MIGA), theGIPB study evaluated each IPIs ability to meetthe inormational needs o potential investorsduring the site-selection process, based on IPIresponses to two simulated inquiries and theeectiveness o its Web site.

Building on this wealth o inormation, theInvestment Climate Advisory Services o the

World Bank Group with unding rom the multi-donor FIAS platorm, undertook a second, survey-based study o 96 GIPB-ranked IPIs. Tis survey

was designed to identiy priorities and practicesshared by top-perorming IPIs but lacking amongthe weaker IPIs. A comparison o the 33 top-ranked IPIs (top IPIs) with a sample o IPIs romthe bottom hal o GIPB (weak IPIs) uncovered14 essential practices or eective acilitation. Te

14 practices described in this note were evidentamong the top IPIs but much less so among the

weak IPIs. Tese practices relate mostly to prioritiesand management, and oer governments low-cost, high-impact pathways or reorm.

Te worlds top-perorming IPIs distinguishthemselves by ostering a private sector-mindedculture, accumulating deep business knowledge,and implementing internal systems that ensurethe agencies can provide oreign investors with

Inestment Prmtin Essentias

What sets the worlds best investment facilitators

apart from the rest

More than 70 percent o investment promotion intermediaries may be

missing out on oreign investment by ailing to provide investors with

accurate and timely inormation, according to the Global Investment

Promotion Benchmarking 2009 report. Tis unction, known as

investment acilitation, is one o the simplest and most cost

eective, yet it is neglected at many agencies. A new survey by the

Investment Climate Advisory Services o the World Bank Group has

identied 14 common practices o the top-perorming agencies in the

benchmarking study. Weaker perormers can inexpensively implement

many o these practices to win a larger share o the trillion-dollarmarket or oreign investment.

INVESTMENT POLICY AND PROMOTION

investment climate

Celia Ortega

Carlos Griffin

Celia Ortega (cortega@

worldbank.org) is an Investmen

Promotion Ocer. She

is primarily involved in project

work in East Arica and

in product development or

the Investment Policy and

Promotion team. Carlos Grin

([email protected]) is a consulta

on investor acilitation and

atercare to the Investment

Policy and Promotion team.

The authors grateully

acknowledge the insights

provided by Dermot Coey,

Valeria Di Fiori, Armando

Heilbron, Eduardo Hernandez,

Kusisami Hornberger,

Karin Millett, Charles Ng, and

Robert Whyte.

This note was developed by

the Investment Policy and

Promotion team o the World

Bank Groups Investment

Climate Advisory Services.

The team advises governments

on attracting and retaining

investment in order

to create jobs and oster

economic growth.


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IN PRACTICE INVESTMENT POLICY AND PROMOTION 2

the necessary inormation to inuence theirinvestment decisions. Tese three areas encompassthe 14 essential practices identied by the survey(see Box 1).

Fster a priate sectr-

minded cuture

1. Private sector experience. One o the greatchallenges o public sector IPIs is to understandprivate sector service standards. Public agencies

have a natural tendency to be task- rather thancustomer-oriented. op IPIs ace this challenge byhiring sta with private sector experience. Seventy-our percent o sta members at top IPIs have

private-sector experience, more than double thepercentage at weak IPIs. Tis is a crucial dimensionin understanding the needs o private companiesprojecting the proessionalism they will trust, andconvincing them that a location best meets theirrequirements. Tese acts have made private sectomarketing experience and industry knowledge keyhiring criteria or investor-acing sta at IrelandIndustrial Development Agency (IDA), a bestpractice IPI or many years.

While this is true o the rank-and-le sta, it ieven more evident among the managers and board

members who lead IPIs. For example, CINDECosta Ricas IPI, is led by a ormer executive oIntel, arguably that countrys most importantoreign investor. In dening the countrys valueproposition, she brings special knowledge andunderstanding o those actors that in practiceaect company decisions to invest, expanddiversiy, or disinvest. In articulating that valueproposition to investors, she knows which bits oinormation are most needed to make a businesscase and what kind o marketing will resonate withinvestors.

2. Salaries and bonuses. A demand or privatesector experience puts public IPIs in competition

with private sector rms or talented staConsequently, nearly all o the top IPIs (83percent) oer salaries above public sector levelsincluding 23 percent that pay at private sectorlevels. A large majority o weak IPIs (62 percent)on the other hand, pay only at public sector levels

Some IPIs, such as Invest in Bogota, ollow theprivate sector practice o oering perormancebased bonuses. I a sta member exceeds goals and

gets positive assessments rom customers, a veryclear-cut bonus ormula rewards the employee

with up to 25 percent o his or her annual salaryTe transparency o the perormance indicatorsand bonus ormula allows sta members to know

when they are on track or a bonus and how muchit will be.

In the absence o sufcient resources, some topIPIs have ound other ways to recruit and motivate

Bx 1. Checkist: 14 Steps t Becmin aTp IPI in Inestment Faciitatin

Foster a Private Sector-Minded Culture

1. Build a sta with public and private sector experience.

2. Oer salaries and bonuses closer to private sector standards.

3. Secure operational reedom and high-level reporting channels.

4. Establish and concentrate eorts in a ew priority sectors.

5. Coordinate acilitation with networks and partners

subnationally and overseas.

6. Maintain English-speaking sta in sufcient numbers and with

the ull range o acilitation skills.

7. Continually train and develop sta, especially in sot skills.

Accumulate Deep Business Knowledge

8. Establish a minimum level o in-house research capacity.

9. Develop account managers into reservoirs o knowledge on

particular sectors.

10. Ensure the accumulation o knowledge and its relevance.

Implement Internal Systems or Consistently Good Facilitation

11. Make acilitation a priority within the overall strategy, including

by training and dedicating an adequate proportion o sta.

12. Maintain the equipment and practices to be easily reached

and to quickly return calls and e-mails.

13. Demonstrate proessionalism and dynamism through the Web

site with requent news updates o importance to investors.

14. Follow detailed guidelines on the content, style, timerame,

and quality assurance o inquiry responses.


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IN PRACTICE INVESTMENT POLICY AND PROMOTION

talented sta. CzechInvest recruits very youngsta, looking or people with quality universitydegrees, just a couple o years in the private sector,and personalities suited to communications,

marketing, and teamwork. Tis young, talented,and energetic sta is motivated by the prospect oquick promotion, high levels o responsibilityrelative to their experience, and an annual,perormance-based competition or a ullscholarship to obtain a masters degree in businessadministration (MBA) at a well-respecteduniversity.

IDA, on the other hand, benets rom an internalculture and external reputation as an agency that isunique within the public sector or winning job-creating investment in a highly competitive

environment. Te exceptional personal satisactionIDA sta derives rom this sense o contributing tothe economic development o Ireland is also apowerul motivation.

3. Operational reedom. Te most successul IPIsare given ocused mandates and then allowed topursue them through results-oriented strategies

with minimal intererence and the reedom toallocate resources accordingly. Tis autonomyhelps to preserve a private sector-like clarity omission and means.

Although 73 percent o top IPIs are purely publicbodies, only about three in ten o these areministerial subunits. Te rest are autonomouspublic bodies, which are mostly positioned outsideo ministries and report directly to a minister orhigher authority. For example, the chie executiveo Invest in urkey reports directly to the primeminister, meeting every two or three weeks todiscuss investment opportunities and remedies orobstacles to investment. Tis allows or moreocused strategy development and autonomy toimplement than in most ministerial subunits.

wenty-seven percent o top IPIs are wholly orpartially private. One o these, Invest in Bogota,receives hal o its unding rom the citys chambero commerce, and ve o its nine board membersare rom the private sector. Because Invest inBogota is successul in investment promotion,there may be temptation within the government to

widen the agencys mandate to include other publicunctions. However, its mostly private nature has

enabled it to resist such mission creep, intoexport promotion, or example.

Nearly hal o the weak IPIs are subunits o

ministries. Such ministries typically haveresponsibility or several other economic mandates,such as export promotion, tourism generation,small- or medium-sized enterprise development,and investment regulation. Under such a structure,oten investment promotion ofcials do not havethe resources, policy support, or strategic reedomto achieve substantial goals. Among the top 33IPIs, only 7 operate as ministerial subunits.

IPIs within a ministry may also suer rompoliticization. In one recent case, an IPIs chieexecutive campaigned with the minister o

economy or his partys reelection, touting the jobsand growth generated by the IPI under thatadministration. Had that party lost, there wouldhave been a real danger o the IPI and itsmanagement being out o avor with the newadministration.

Politicization can be more subtle and even wellintentioned, such as when an IPI is prevented romocusing on just a ew high-potential sectors orear that domestic stakeholders in other sectorsmight eel discriminated against. Equally

promoting all sectors may sound air in principle,but a lack o targeting can spread an IPI too thin,orcing it to expend resources on low-potentialsectors and reduce promotion o high-potentialsectors.

4. Strategic ocus on a ew priority sectors.Although good IPIs respond to every inquiry, oneo the most widely shared characteristics amongtop IPIs is that they have identied a ew prioritysectors on which to ocus the bulk o theirpromotion and acilitation eorts. Tis approach isessential in permitting the development o the

deep business knowledge required to understandand speak to the needs o specic investors.

In developing a well-considered list o prioritysectors, IPIs need to determine what the countryhas to oer new oreign companies and the benetsthe country hopes to realize rom their investments.Commonly sought benets include jobs, specicskills, access to technologies and markets,leadership in a certain industry, improved global


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economic integration, uller utilization oparticular resources, and an enhanced image orinternational reputation.

Clear priorities set the oundation or an IPIstrategy and its allocation o resources. In act,every top IPI responding to the survey said itprioritizes inquiries according to their potentialvalue. Tis ensures that with limited time andresources, the sta ocuses on delivering the mostimpact (see Table 1).

5.a. Networks o subnational agencies andoces. Just as being outside o a ministry supportsstrategic ocus, being inside a network o

investment promoters allows or specialization andgeographic ocus, as well as a cost-saving divisiono labor. At least 76 percent o the top IPIs t intoone o three categories:

Subnational agency National agency with subnational oces National agency in a country with separate

province-level agencies, including specialeconomic zones

Te 24 percent o top IPIs that do not t into thesecategories are in countries with small land areas opopulations o 0.8 to 5.2 million. Coordinationamong national and subnational ofces allows staat the subnational level to ocus even morenarrowly on developing specic subsectors o

lling individual economic zones. At the nationalevel, sta can make reerrals to subnational experts

when an inquiry does not all within the nationaIPIs purview or priorities.

Four o the top 33 IPIs are in the United KingdomTe large economies in London, Scotland, andManchester led naturally to the creation odedicated agencies, with national coordinationspringing up in response. oday the nationaagency, UK rade and Investment, and 12subnational agencies meet regularly to review

coordination o issues and discuss approaches andconcerns. A 2007 agreement sets out sharedobjectives, mechanisms or coordinating strategyand responsibilities or service delivery. Newer orless well-unded IPIs may nd it difcult to closelycoordinate strategy and capabilities, but they canidentiy potential partners and work toward moresynergies over time.

A more integrated orm o coordination is thhub-and-spoke network, in which the nationaagency receives inquiries and channels them to thebest-suited regional agencies. Tis system aces two

basic challenges: i) ensuring that the subnationaagencies keep the national agency updated on theirinvestment opportunities and conditions, and ii)making sure that the national agency airlychannels inquiries to the subnational regionsInvest in Spain meets these challenges with anonline bidding system that inorms all 17subnational agencies o new inquiries and the typeo inormation needed. Invest in Spain receivesresponses rom those interested in attracting a

Tabe 1. Strateic Fcus: A Basis fr

Success in Inestment Faciitatin

It can be a tough decision, but deciding what sectors to ocus an IPIs scarceresources on is the rst step in successully promoting them. Nearly withoutexception, the top 33 IPIs (25 national, 8 subnational) have targeted specicpriority sectors and prominently display them on their Web sites. In mostcases, a visitor can access a list o priority sectors in two or ewer clicks, andone more click will oer the visitor detailed inormation on the costs,advantages, and procedures or investing in each. Here is a sample o ve topIPIs, the way they present their priorities on their Web sites, how manypriorities they have, and what those priorities are.

AgencyWeb SiteHeading

Number oPrioritySectors

Sample o Priority Sectors

Invest in France Agency Key Sectors 9 Aerospace, agribusiness, health,inormation and communications

technology, shared services

PRONicaragua Investment

Opportunities

6 extiles and apparel, tourism,

contact centers and businessprocess outsourcing, light

manuacturing and assembly,

agribusiness, orestry

Hungarian Investmentand rade Development

Agency

PrioritySectors

8 Automotive, biotech, electronics,logistics, research and

development

Invest Hong Kong Business

Sectors

9 Financial services, business

proessional services, technology,consumer retail services

Botswana Export

Development and

Investment Authority

Sectors 5 Leather, textiles, glass, bee,

inormation technology


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particular investment, checks them orcompleteness, and passes them on to the investor.Once a region has won the opportunity to pursuethe investment, the investor deals directly with its

agency, although Invest in Spain maintains contactwith both parties to ensure a successul investmentprocess.

5.b. Networks o overseas oces. Eighty-onepercent o top IPIs, including ve o the eightsubnationals, have established their own ofcesnear concentrations o potential investors or havededicated sta in their countries embassies andconsulates. Particularly when this sta reportsdirectly to the IPI (rather than to a ministry orambassador, or example), these arrangements havethe advantages o:

deepening IPI knowledge of targetedmarkets;

developing many more face-to-facerelationships;

allowing more frequent visits toinvestors; and,

improving responsiveness to inquiries.

Eighty-ve percent o the surveys top IPIs saidthat their overseas ofces respond directly toinvestor inquiries. Tis permits quicker response

and ollow-up by phone or in person.

Te obvious disadvantages are the cost anddifculty o supervising distant sta. Invest HongKong keeps costs lower by using local site locationconsultants in target markets to handle inquiries inthose countries, as well as to generate and ollowup on leads.

Te management o Mauritius Board oInvestment can count on good perormance romits Paris and Mumbai ofces, because they arestaed by senior managers with many years o

experience and good records on the ground inMauritius. CzechInvest maintains seven overseasofces, but with only one sta member in each.

Although not supervised in person, these stamembers are motivated by the same prospects opromotion and a scholarship as previouslymentioned.

6. Competency in English and other oreignlanguages.English has become the de acto global

language o business. Ninety percent o all the IPIssurveyed report that English is the language usedmost oten in the investor inquiries they receive.

For IPIs in countries without the benet o massEnglish-language education, managers shouldensure that at least a small core o sta memberscan communicate eectively in spoken and writtenbusiness English. Such is the case o Senegals

APIX, where the CEO and all investmentpromotion ofcers are ully uent in French andEnglish.

Tis can be a challenge in developing countrieswith strong linguistic and historical ties to a largesource country or investment, such as France inthe case o Senegal. Such ties can make an IPI

complacent in its pursuit o the much largernumber o investors who conduct their business inEnglish. It is worth noting that 18 o the 20 lowestranked IPIs in the GIPB study are in countries

where English is at best a third language.

Beyond English uency, some IPIs nd itstrategically advantageous to accumulate a pool ocommunication skills specic to their targetmarkets or oreign investment. Te AustrianBusiness Agency not only makes its Web siteavailable in seven languages, it has sta who can

respond to inquiries in those languages, includingChinese, Japanese, and Russian. Tese languagesare spoken in countries that are important sourceso oreign investment, but they are not widelyspoken outside those countries. Tus, agenciesprocient in these languages have an advantage inmarketing to them.

However, eective communication andrelationship building with investors depends notonly on linguistic understanding, but also oncultural understanding. Although an IPIs privatesector experience helps it to develop a general sense

o how private investors think and what theyexpect, it must also recognize that the investorscountry o origin adds another layer o corporateculture. For example, as PRONicaragua targetedmostly American companies or investmentpromotion, it deliberately built up a sta withpersonal exposure to the United States throughschool, amily, or work. Te result was a marketingteam that was not only multilingual, but alsomulticultural. Tis enabled the sta to better


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understand the perspective o American investorsand the service standards to which they wereaccustomed.

7. Continuous staf development. op IPIsrecognize that it is not always possible to hiretheright people; oten the right people have to bedeveloped. Tis is especially true or sot skillsthat are used in sales, proessional presentation,and customer service. Tese skills are crucial toinvestment acilitation but rarely taught inuniversities.

In just the last two years, about three-quarters othe top IPIs have trained their stas in marketingand investment acilitation, while about 40 percenthave provided training in customer service,

writing, and research. For example, IDAacknowledges the importance o sta developmentby investing signicant resources in comprehensivetraining, including MBA and executive programsrom top international business schools. IPIs withewer resources, such as PRONicaragua and Investin Bogota, have sought and obtained training,including in marketing and customer service, rominternational organizations and consulting rms.

At Invest in Bogota, this training continues to bereplicated in-house or new sta.

Sta development is a way o raising the IPIscapacity or replenishing capacity ater staturnover, but it can also be motivational when thesta sees it as a way to build skills and advancecareers. Around 42 percent o sta members atboth top and weak IPIs have less than two yearsexperience at the IPI. And, only about a quarter otheir stas have more than ve years experience.High sta turnover is a problem or strong and

weak IPIs alike. Te dierence is that the top IPIsembrace this act and cultivate an image as a goodstepping stone in the careers o talented people.

When ormer employees o an IPI are highly

sought by public and private employers, the qualityo applicants to the IPI rises.

Accumuate deep business

knwede

Once an IPI knows its strategic ocus, the next stepis to build the deepest knowledge possible opriority sectors through industry research and by

building relationships with people in the industryIn this way the IPI can understand the opportunitiesand challenges aced by the companies it is tryingto attract. Most IPI employees do not have a degree

or specialized training in the sectors they serveHowever, there is a clear dierence between thetop and weak IPIs in the tools and practices used tobuild and manage knowledge. Tese includeresearch capacity, the use o account managers, andsystems or the management o knowledge andrelationships.

8. Research capacity. Te survey results show thaor each person employed, top IPIs will have onaverage 1.05 computers with high-speed Interneaccess. On the other hand, weak IPIs have only 0.6computers per person, meaning their sta members

have limited access to the primary tool or research

Tis lower research capacity may reect costconstraints, but also a lack o emphasis bymanagement on the accumulation o sector- andinvestor-specic knowledge. An IPI with a lowerlevel o knowledge will misdirect, and thereore

waste, more energy. Unable to oresee maninvestor needs, this IPI will provide inadequateresponses to inquiries, diminishing investocondence. Tose investors that do set upoperations in the country will not include the IPI

in strategic collaboration or growth anddiversication, because the IPI brings little to thetable. IPIs with a low level o industry knowledge

will be relegated by their customers to a role oadministrative support.

Every standard unction o an IPI requires research whether image building, proactive promotioninvestor atercare, policy advocacy, or investmenacilitation. Tereore, each proessional stamember should have easy access to a computer andthe Internet. When this is not possible, a ew stamembers should be dedicated exclusively to

research with a ocus on:

preparing stock proles of priority sectorsand investment sites; and

providing a quick turnaround for requests totailor stock proles to specic inquiries.

9. Account managers. Eighty-eight percent o topIPIs always have inquiries handled by a singleperson throughout the entire lie cycle o the


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inquiry. Putting a single account managerin chargeo each customer enables the IPI to:

build familiarity with potential investors

needs and interests, conveying that they arevalued and sparing them the need to repeattheir issues to multiple people;

take advantage of and build on theknowledge o the IPIs sectoral specialists;

establish relationships with investors that arepersonal as well as institutional, therebyimproving inormation sharing and opennessto collaboration; and,

smoothly advance investor interest throughprogressive stages o inquiries, site visits,negotiations, start-up, and urtherdevelopment.

It is difcult to imagine investors sharinginormation about their long-term goals, costs,suppliers, production processes, and corporatetrends i they are not personally comortable withthe IPI sta members who work with them. And,the IPIs ability to collect this type o inormationrom the investor directly aects the quality o theinormation the IPI can provide the investor. Tisinvestor condence can best be nurtured by anaccount manager. Te investor needs to know,however, that because the account manager

represents the ideals o an institution, thecooperation and condentiality established withone individual will continue should he or she leavethe agency.

10. Knowledge and relationship managementsystems. Beyond desk research and news updates,deep knowledge is acquired through relationships

with companies and other industry players. As anaccount manager builds these special relationshipsand knowledge, it is critical to ensure that theybecome assets o the IPI and not just o theindividual. Considering the high turnover rates o

many IPIs, it is important to have systems orcollecting, storing, and sharing inormation withinthe IPI beore it is lost.

Inormation provided to individual investors maybe similar to that requested in other cases.Knowledge management tools allow IPIs to storeand reuse valuable inormation as it is collected.Tis enables partial standardization o inquiryresponses, and promotes efciency, consistency,

currency, and condentiality o inormation.

Five common tools and practices used by top IPIsor knowledge management are:

i. Investor inormation systems. Tese may be assimple as shared network drives, where stockinormation is available to all inquiry responderson a countrys general business climate and itsindustry-specic characteristics. Tis access allowsthe responders to quickly assemble consistent,high-quality responses and spend their timetailoring the response. As the IPI builds its store oinormational material in electronic orm,inormation o general interest may be madeavailable online to investors or remote ofces.

ii. Regular staf meetings.Te simplest and mostinexpensive o knowledge management practices isthe regular, perhaps weekly, sta meeting. Hereaccount managers can recount their ongoingactivities with investors, describing opportunities,challenges, concrete steps taken, successes, andlessons learned. Tis keeps all sta inormed oindividual accounts, allows the account manager tolearn rom the experiences o others, and enablesthe sta as a whole to improve efciency byidentiying common issues and approaches.Ninety-one percent o top IPIs have regular, team-

ocused sta meetings, while slightly over hal oweak IPIs do.

iii. Databases o available land. op IPIsunderstand that or their investment locations tobe seriously considered, they must be able toprovide quick, relevant inormation to potentialinvestors on actual land and ofce space that issuitable or their projects in terms o location,inrastructure, regulation, and incentives. Nearlyall (91 percent) o the top IPIs have their own landdatabases or access to databases hosted by partnerorganizations. CzechInvest takes the extra step o

putting interactive maps o the country on its Website. Te maps allow visitors to select and viewcombinations o transportation inrastructure,sectoral concentrations, and potential supplierlocations.

iv. Directories o business service providers. Inaddition to land, potential investors will oten seeklocal proessional services, including legal,accounting, tax consultancy, personnel consultancy,


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construction, and translation. Many top IPIs willmaintain lists o proven service providers, althoughthey generally rerain rom making endorsements.In the Czech Republic, the Association or Foreign

Investment is an association o proessional serviceproviders that acts as a single point o contact

dedicated to the smooth entry o oreign investorinto the country. Te strict membershiprequirements include our recommendations romassociation members, two rom multinationa

corporations, proo o good nancial standingpolice clearance o the applicants agent, and aminimum o three years experience.

v. Customer relationship management sotwareCRM sotware typically stores key companyinormation and records all interactions with thacustomer. It will remind an account manager oopen issues and next steps to be taken. It canthereore track progress toward goals and oten cangenerate perormance reports. Te sotware usedby IPIs tends to be or the front-end, ocusing onlead ollow-up and the tracking o service tickets

(open customer issues). However, or those IPIstasked with regulatory or monitoring unctionsthere is also sotware or tracking back-endpaperwork and processes. By making sure that anIPI remembers a companys history in thegreatest detail and that all open issues are ollowedup in a timely manner, CRM sotware makesinvestors eel better served and more likely to relyon the IPI as a valuable resource (see Box 2).

Impement interna systems

fr cnsistenty d

faciitatin

11. Making acilitation a priority. In the GIPBresults, 70 percent o the IPIs did not respond inthe time requested to one or both o two investorinquiries. Tere is no easier potential sale than

when an investor knocks at an IPIs door. And ewthings are more damaging to an IPIs image andactual perormance than giving a rst impressiono being disinterested or incapable o providing abasic, proessional response. Even i the IPI iunable to respond in detail, proessionalism

demands that the inquiry be acknowledged. TeIPI should be ready to make reerrals to otheragencies that might help, and it should takeadvantage o contact with the investor to provideany promotional material that might inuence theinvestors appreciation o location advantages andIPI services.

Te survey evidence suggests that top IPIs and weak IPIs receive about the same number o

Bx 2. Makin the Mst f Custmer

Reatinship Manaement Sftware

IPIs unable to aord specialized CRM sotware may use less expensive

sotware such as standard Microsot Ofce programs (Excel and Access)

or basic record-keeping and customer statistics. Brazils APEX has

developed an investor database on Access, and Senegals APIX relies on the

same program or the smooth operation o its one-stop shop.

For its lead-tracking, APIX uses AC!, which is one o the less expensive

ormal CRM sotwares and is also avored by PRONicaragua, Invest in

Bogota, and until recently, CINDE. Now CINDE uses Microsot CRM,

as do Invest Hong Kong, Invest in urkey, and the worlds top-ranked

acilitator, Austrian Business Agency.

Manchester Investment Development Agency Service uses Evolutive,

which is designed specically or economic development and inward

investment agencies. Although little known in the rest o the world, its

manuacturer claims that Evolutive is the best seller or public sector

organizations in the United Kingdom. MIDAS system extends to 10 local

authorities, which can access and update news o projects and investors.

As IPIs grow, mature, and diversiy their goals, it is natural or them to

adapt their CRM sotware accordingly. CzechInvest started with an Excel

spreadsheet, later moving to GoldMine sotware and then to a tailored

orm o Lotus Notes, which is also used by Copenhagen Capacity, the

worlds second highest perorming acilitator. oday CzechInvest is

gradually shiting to web-based applications.

Most crucially, CzechInvest management ensured that all sta

communications and goal achievements were recorded within the system.

I not recorded, they did not count. Similarly, Invest in Bogotas sta

bonuses are calculated based only on inormation reected in the CRM

sotware. Te most common problem with CRM sotware is that it is not

used by sta. Without management attention to creating a CRM mindset,

it can become a costly tool that is never taken out o the toolbox.


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inquiries per week, on average 18 to 21. However,top IPIs assign about double the percentage o stato inquiry handling. Invest in Spain dedicates 20percent o its sta exclusively to inquiry response,

and each o Austrian Business Agencys 24-membersta must be prepared to respond to investorinquiries and does.

12. Being accessible. In order to requestinormation rom an IPI, an investor must rst beable to reach its sta by phone and e-mail. Tisseems an obvious point, but many weak IPIs hurttheir chances to make their cases to investorsbecause o one or more o the ollowing:

A Web site with no contact names, numbers,or e-mail addresses or general reception or

or sector-specic managers and specialists. Receptionists who are unable or unauthorized

to transer investor calls to the sta most ableto help investors.

No chance to leave voicemail or othermessages.

Use of personal e-mail accounts instead ofagency-specic addresses.

op IPIs have three times more telephones perperson (0.85) than weak IPIs (0.28), and mostallow callers to leave a message so that an investor

only has to call once. When there is no voicemailon a direct line, an investor may call several timeswhile the IPI sta member is away and give up inrustration, all without the sta member everknowing about the lost opportunity. Personale-mail accounts tend to be unreliable because theyare oten on ree public-use systems and businesse-mails can be lost among personal and junke-mails or blocked entirely by the providers spamlters. Most damagingly, the use o personal e-mailconveys an unproessional image to investors.

Personnel made available to answer investor

inquiries should be organized according to investorneeds rather than internal, bureaucratic unctions.For example, poor acilitators may have a singleinvestor speak with one person about locations,another about incentives, and another aboutlicensing. Instead, an investor should be able toquestion one person about all the relevant issues.

Within three clicks rom Copenhagen Capacityshome page, investors can arrive at names, photos,proles, and direct contact inormation (including

mobile phone numbers) or each o its industryspecialists.

13. A Web site work plan. An IPIs Web site is

oten an investors rst point o contact with theagency. Not having one is simply no longer anoption or a serious IPI. Te Web site acts not onlyas a portal or investor inormation, but also as theace o the IPI. Keeping inormation on the Website current and relevant is necessary to ensure thatinvestors are not misinormed and that the IPIgives a proessional rst impression.

Eighty-six percent o top IPIs update their Websites more than once a month, and more than halo those update daily. On the other hand, most

weak IPIs do not update their Web sites more oten

than every three months.

A Web site should include timely updates on newregulations, projects, and opportunities.Copenhagen Capacity posts a monthly newsletter(also available by e-mail subscription) that presentsthe latest news about Copenhagens businessclimate, investments, company establishments anddevelopments in our key industries.

Updates also keep promotional material resh andinteresting. Invest in urkey, a top IPI, uses daily

updates to oer new evidence that its country is aprime investment location. In 50 seconds, a newsticker on the Invest in urkey home page givesvisitors 10 Breaking News headlines makingurkeys case (see Box 3). In alerting Web site users

with resh inormation, these updates also act asadvertisements or the IPIs proessionalism anddynamism.

Bx 3. Recent Breakin News frm the

News Ticker n Inest in Turkeys Web Site

Mobile operator Avea opens technopark in Istanbul... USD 6 billion

o agricultural investments on the way... Foreign banks make prot in

urkey, while incurring loss abroad ommy Hilger to run urkish

operations independently urkey, popular destination or heavy

construction equipment investments


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14. Response guidelines. All the practicesdescribed to this point must be integrated into asingle, coherent system or the smooth andthorough handling o inquiries every time.

A best-practice system will have xed processes orthe channeling o inquiries, updating oinormation, and evaluation and adjustment othese practices. Tis cycle translates into a smooth

process o inquiry receipt, response, and ollow-upor the investor (see Figure 1).

o ensure the high quality and timeliness o

inquiry responses, most top IPIs employ:

written guidelines or content (84 percent); quality control by managers (91 percent);

and, deadlines or submission (94 percent).

Fiure 1. An Interated System fr Inquiry Handin

Best-practice IPIs address the four key dimensions of inquiry handlingavailability and contactability, responsiveness and handling,

response quality, and ongoing customer carein an integrated system that is continuously monitored for improvement.

Source: Investment Climate Advisory Services o the World Bank Group


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A good investment acilitator puts a new inquirythrough a xed screening process, or investorscorecard, and assigns it a level o priority. Teinvestor receives an acknowledgement o the

inquirys receipt and a timerame or its response.Te inquiry is channeled to the appropriatespecialist to prepare the response according to setguidelines on content and presentation. Teinquiry response is reviewed by a manager andapproved or returned to the specialist or more

work. Te response is sent and ollowed up withina xed time limit. Te objective o the ollow-up isto move the investor to a next step, such as an in-person meeting, a site visit, or an introduction tokey ofcials. When this process ends with theinvestor taking a next step or declining urtherassistance, the manager records what went right

and wrong. In a periodic review o the inquiry-handling system, these notes, input rom stainvolved, and investor eedback help identiyoptions or enhancing eectiveness.

Invest in Spain provides a good example o howinquiry priorities can be systematically addressed.Te agency assigns a responder according toinquiry categories o Level 1 (general), Level 2(non-priority sector), or Level 3 (priority sector). A

junior ofcer replies within 24 hours to Level 1inquiries, using stock inormation about the

economy, investment climate, and investmentprocedures. For Level 2 inquiries, a senior ofcercalls the company within 24 hours to demonstrateattentiveness and to collect more detailedinormation on its plans and constraints. Teresulting compilation o inormational material isdelivered to the investor within ve days. For Level3 inquiries, a sector specialist is assigned to do thesame work, but with more research and sector-specic details.

However, an outcome-oriented IPI must remainexible enough to spot opportunities or acilitation

outside the guidelines. When a European cosmeticsmanuacturer in Colombia inquired about theprocedures and challenges or expansion, Invest inBogota recognized that the local afliate was

working to convince its European headquartersthat the Bogota acility was ripe or expansion.Invest in Bogota oered to make a pitch directly tothe headquarters, which helped seal the deal. Te

agency regularly makes a similar pitch to thecustomers o one o Bogotas investors, a call-centercompany. Invest in Bogota has ound that helpinginvestors in this way can lead to job creation in

targeted sectors and win investor loyalty or thecity.

Te goodwill generated by this sort o interventionin turn catalyzes another IPI tool or acilitation:investor testimonials. estimonials (written, video,or in-person) send a powerul signal to potentialinvestors that an investment location is protable,stable, and even strategic in the views o their peers.

An investor may not ask or testimonials orinormation other than what is necessary ornancial calculations o costs and revenue. It is upto the IPI to master the art o giving investors the

inormation they neednot just the inormationthey requestto choose their investment locations.

Te tools or handling inquiries are regularlymaintained through systematic processes bydesignated sta. Databases and directories areupdated. News on developments in sectors and theinvestment climate is collected and incorporatedinto stock inormation. When newly acilitatedinvestors launch their operations they are asked ortestimonials, which are added to promotionalmaterials. Changes in personnel trigger prompt

updates o contact inormation on the Web siteand training on the inquiry-handling system.Finally, sta members responsible or even a smallpart o the system are aware they are being evaluatedon their contribution to its smooth unctioning.Managers provide the necessary incentives and setpriorities to ensure this.

Cncusin

Given the vital role that an IPI can play in winningoreign investment, there is simply no reason why

an investor inquiry should go unacknowledged orwhy investors should not be able to get in touchquickly with an IPI sta member who can helpthem. Failing to acilitate site selection or investors

with real interest wastes the scarce time andresources spent on image building and investoroutreach. Tereore, every inquiry deserves aresponse, and making sure each investor gets one is


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essential to the IPIs reputation or proessionalism.

Tose practices that set the worlds top acilitatorsapart rom their competition relate more to the

priorities and internal systems that create anenabling environment than to nancial resources.In act, many IPIs may be able to improve theircountrys share o the trillion-dollar global marketor oreign investment simply by makingacilitation a top priority. By ocusing acilitationeorts on a ew priority sectors, dedicating a ewpeople to research in those areas, mapping out aninquiry-handling system, and evaluating staspecically on acilitation, an IPI has already takena big step toward good acilitation.

Over time and without additional resources, an

IPI can urther develop an enabling environmentby recruiting sta members on the basis o theirsot skills, private sector experience, and languageprociencies. It can implement rudimentaryknowledge-building techniques such as stameetings, shared computer drives, and training oincoming sta on internal systems and priorities. Itcan reach agreement with similarly mandatedinstitutions subnationally and overseas tocoordinate investor acilitation.

With a small, additional investment, more

telephones and computers can be made available,and bonuses or supplemental salaries can encouragethe competitive spirit needed to win investment intodays very competitive international marketplace.Finally, success in acilitation may earn an IPIgreater autonomy and the reedom to set sectoralpriorities and budgets or personnel andequipment. Success breeds success, and the rightocus with the right internal system is enough tokick-start this virtuous cycle.

References

FIAS. 2009. IPI Characteristics Survey: Providing

Inormation to Potential Investors. Unpublished survey,

FIAS, Washington, D.C.

Investment Climate Advisory Services. 2009. Global

Investment Promotion Benchmarking 2009: Summary Report.

Te World Bank Group, Washington, D.C.

UK rade and Investment. 2006. National Framework or

Joint Working between RDAs and UKI. https://www.

uktradeinvest.gov.uk/ukti/appmanager/ukti/ournetwork?_

ns=alse&_npb=true&_pageLabel=england.

IN PRACTICE

The Investment Climate IN

PRACTICEnote series is publishedby the Investment Climate

Advisory Services o the World

Bank Group. It discusses practical

considerations and approaches

or implementing reorms that

aim to improve the business

environment. The ndings,

interpretations, and conclusions

included in this note are those o

the authors and do not necessarily

refect the views o the ExecutiveDirectors o the World Bank or the

governments they represent.

Abut the Inestment

Cimate Adisry

Serices

The Investment Climate Advisory

Services o the World Bank Group

helps governments implement

reorms to improve their business

environments and encourage and

retain investment, thus ostering

competitive markets, growth, and

job creation. Funding is provided

by the World Bank Group (IFC,

MIGA, and the World Bank) and

over 15 donor partners working

through the multidonor FIAS

platorm.

ifi-inverstment promotion essentials

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