In the early months of 2020 the world changed in ways that few of us could ever have envisaged. Much of the global population was about to enter a new world, a Covid-19 world, a completely digital world.
For investment promotion agencies (IPAs) this would mean a sudden and abrupt halt to overseas travel, no more incoming delegations, no more conferences or networking events. From now on it was all about starting and finishing the working day on Microsoft Teams with the occasional diversion to Skype, WhatsApp, WeChat, Zoom or more recently Clubhouse. Conferencing was replaced by webinars. Investment attraction was no longer about physical human interaction. Meanwhile, foreign direct investment (FDI) was plummeting in the wake of the global crisis – according to the Global Investment Trends Monitor from the UN Conference on Trade and Development (UNCTAD), global FDI in 2020 fell by a staggering 42% to an estimated $859bn. There was a new normal.
Why fly when you can Zoom?
There is no question that the acceleration of the digital transformation that many IPAs were already going through before Covid-19 has been a positive outcome of the pandemic. According to UNCTAD, which surveyed 180 IPAs worldwide about their response to Covid-19, 77% of agencies stated that they have provided Covid-related information and services through their websites, social media, and virtual platforms and tools. An online webinar, many have discovered, can reach an unlimited audience globally in ways that a traditional live seminar never could. IPA executives no longer have to fly all the way to San Francisco to engage with clients in Silicon Valley, they can simply jump on a Zoom call at their convenience.
The digital tools that many IPAs have been forced to quickly embrace over the past 12 months are here to stay. Those locations that are able to promote themselves effectively online and position themselves at the forefront of the digital world will have a considerable competitive advantage moving forward. Examples of locations leading the way include the Estonian Investment Agency, the Rwanda Development Board and ProColombia.
But are digital tools alone enough? For now they have to be, of course, but what will the future of investment attraction look like? Is there still a place for the more traditional investment attraction model – one based on actually visiting overseas target markets, working conference rooms around the world, building country pavilions at major exhibitions and trade shows, attending networking dinners, then hosting inward delegations and itineraries back at home base?
Physical interaction will once again have a hugely important role to play in securing inward investment successes in a post-pandemic world. It is simply not possible to effectively target a market that you don’t understand. The dos and don’ts of doing business in China, Japan or India are best learned from first-hand experience. Mutual respect, trust and understanding cannot be built as quickly (if at all) online. Also, clients appreciate it when you travel a great distance to visit them. Lunch or dinner will often follow the business formalities where deep, long-lasting relationships will be forged that could simply never be built in the same way over a short Zoom call.
Lunch or dinner will often follow the business formalities where deep, long-lasting relationships will be forged that could simply never be built in the same way over a short Zoom call.
Those same clients, while considering their global footprint, will want to visit their preferred choice of location for future growth and expansion to experience for themselves the culture, availability of skilled talent, ease of doing business, suitable sites and many other determinants. Site selection is a big decision and no right-minded business will want to take such a risk without ever having experienced their location of choice first-hand.
The human touch is still essential
Human connection has always been and will always be an essential ingredient in successful investment attraction. Strong relationships lay the foundations for everything that follows. Experiencing the world first-hand enables IPA executives to better serve the needs of their clients. It will be different in future of course. More consideration will surely be given to just how necessary any trip is as there are many engagements and transactions that can be undertaken just as effectively online. Digital tools and e-services will have a critical role to play but will augment physical client interactions, not replace them. Smart locations with the right hybrid solution for successful investment attraction, skilfully combining a digital, physical and essentially human approach to securing projects, will win.
Bring on the post-pandemic world and all of the opportunities that will come with it. I can’t wait to touch down again soon in Dubai or Singapore, Paris or Istanbul, to shake hands and talk with real people in the real world. All without having to remember to unmute!