The last decade has witnessed intensified competition between places and regions for investments. New places have entered the competition, at the same time as the global pool of investments has been shrinking. As I discussed in our blog post on key trends in investment promotion, European locations have shown a considerably poor inward investment performance in the last decade.
Thus, more proactive promotion of incoming investments on both local and regional level will be needed in the future and it needs to take new forms.
Business Attraction Management is a new approach to meet the challenges facing place-based investment promotion for cities and regions. As opposed to traditional sales and transaction-oriented investment promotion, Business Attraction Management is a holistic approach to the strategies, processes and activities, aiming at attracting and making full use of inward investment activity. It also integrates the investment promotion efforts of the place with the general growth and innovation agenda.
The cornerstones of Business Attraction Management are four phases, interconnected in a cycle. The phases are: Branding, Attracting, Establishing and Growing.
1. Branding of the place can be seen as both the beginning and the end of a self-reinforcing cycle. Building the brand of the place needs to take business attraction into consideration, and the impact that the brand has on the specific target group – potential investors.
2. The Attracting activities are directed at making contact and developing a relationship with specific investors, as well as facilitating the investor’s visit to the locations, and include marketing and packaging, sales and lead generation and one-stop-shop solutions.
3. An agreement to invest leads to the next phase, which is the Establishing phase. Traditionally labelled as after-care, it entails activities like soft landing, and strategic and administrative support such as access to office space and land, networks, talent, innovation hubs and clusters and assistance with permits and licences.
4. Successful establishing, in turn, leads to the Growing phase, which means giving investors access to additional talent, innovation networks and projects and social and professional networks. A thriving and growing investor will make further investments and also become an excellent reference for business attraction, which, in turn, strengthens the brand.
Figure 1: The cornerstones of Business Attraction Management
One key success factor of this approach is to develop the relationship and dialogue with the investing business in all four phases. The more trustful and productive this relationship becomes in each phase, the more effective business attraction activities will become, not only in the given phase but in subsequent phases – and the better the reputation of the place as a preferred location for investment will become.
Investment promotion as a discipline plays an integral role in Business Attraction Management. However, Business Attraction Management is a broader concept, not only focusing on attracting an investment and giving the investing firm due aftercare, but also drawing on local and regional strategies and policies for making the place attractive to investment-led growth and innovation. As such, policies and strategies for innovation and growth, cluster development and talent attraction play an important role as enablers for business attraction.
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