Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets

Transcription

1 Promoting Foreign Direct Investment in Medium-Size, Low-Budget Cities in Emerging Markets Joerg Simon, Senior Investment Adviser MILLENNIUM CITIES INITIATIVE THE EARTH INSTITUTE AT COLUMBIA UNIVERSITY

2 1. The Millennium Cities Initiative (MCI) 2. Importance of capacity-building in city investment promotion 3. Handbook on city investment promotion 4. Structure of the Handbook

3 1. Millennium Cities Initiative (MCI) Localize MDGs Continuing rural-urban migration; MDGs at national level need to be achieved at local level Assist second-level cities in Sub-Saharan Africa in achieving the MDGs by 2015 Criteria for selection of cities; stimulating economic development; needs assessments; integrated MDG-based city development strategies Complement to Millennium Villages Agricultural value chain; cities as regional hub for rural area

4 1. Millennium Cities Initiative (continued) Preparation of investment-related materials Assessment of legal framework for investment, investors guides; assessment of infrastructure constraints to business activities; investment opportunities and profiles of promising sectors identified by KPMG, UNIDO and Columbia University Dissemination of information Investors missions; investment days in-country and abroad; specific targeting efforts Promoting the city as an investment side Strengthening the city s capacity in facilitating investors in establishing business and after-care services; enable the city administration to better servicing businesses

5 2. Importance of capacity-building in city investment promotion Role of investment in building productive capacity Investment brings capital, jobs, technologies and skills; it contributes to the improvement of local infrastructure, export capacity and Competitiveness Investment is always local Cities are key nodes of the global economy and supply pools of skilled Workers that companies need to access; cities also benefit directly from inward investment (e.g. also from business linkages) Companies are now investing more and more where the resources (including human talent, services) are located; companies increasingly assess and compare the attractiveness of cities (or sub-regions) rather than countries when making location decisions

6 2. Importance of capacity-building in city investment promotion (continued) Growing importance of promoting cities Cities respond to their growing importance by developing their own capacities for attracting and facilitating inward investment; the number of sub-regional and city investment promotion agencies has increased during recent years both in the developed world as well as in emerging markets Challenges medium-sized and low-budget cities in emerging markets are facing in attracting FDI Limited budgets and underdeveloped capacities for attracting and servicing investors, identifying investment potential; existing investment climate and infrastructure

7 3. Handbook on city investment promotion To serve as a tool for medium-sized, low-budget cities to: Strengthen investment promotion capacity. Develop a strategic approach to attracting investment. Brand and market the city. Identify potential investment opportunities. Facilitate investors and provide after-care services for investors. Promote private-public sector dialog. Better benefit from FDI, e.g. through business linkages.

8 3. Handbook on city investment promotion (continued) Prepared in 2008/2009. Workshop with international experts in December Verification with a number of experts in city investment promotion. Launch in December Available on-line in English on Distribution world-wide to city and sub-regional institutions. Hard copies available in March Translation into Arabic, French, Chinese, Russian.

9 4. Structure of the Handbook 10 modules, each of them is being introduced by topics, objectives and concluded by key-leaning points and resources. Cases of best practice demonstrate how cities and agencies are gaining experience in attracting and servicing investors. Module I. The Handbook Module II. Introduction to foreign direct investment Module III. A framework for investment promotion A complete overview of how to do investment promotion, as well as the rational and importance of it.

10 4. Structure of the Handbook (continued) Module IV. How to develop a city investment promotion strategy Helps policy makers develop an investment promotion strategy for their cities, preferably developed in conjunction with the national IPA. The strategy can use the templates provided in this module, with a key emphasis on making the strategy sector-based and focused on achieving clear targets that can be monitored and evaluated. Module V. How to build a city investment promotion agency Designed to inform cities on how to establish a new investment promotion agency. The practical illustrations of the organizational structure, vision, mission, and client charter of an IPA are laid out, as are budgets and funding. Also discussed are the staff, skills and roles, as well as the importance of IPA networks.

11 4. Structure of the Handbook (continued) Module VI. How to market a city to foreign investors Pays attention to the importance of marketing in attracting inward investment to a city. Provides best practices and templates for developing the most important marketing materials. Cautions low-budget cities to spend very limited resources on expensive image and brand building campaigns. Module VII. How to target investors and generate leads Provides city IPAs with a comprehensive toolkit for developing and implementing an investor targeting and lead generation strategy and individual campaigns. By following the main topics and proven best practices, city IPAs should, over time, increase the volume of investment into their cities.

12 4. Structure of the Handbook (continued) Module VIII. How to facilitate inward investment Designed to assist city IPAs in understanding how to handle investor inquiries, provide information to an investor in the most effective format, organize a successful site visit, and consider the options for the facilitation services the city IPA can provide to an investor. Investment facilitation is essential for every city IPA to ensure seamless entry of investment. Effective investment facilitation will lead to: (i) The investment is completed (and not cancelled). (ii) Investors are happy, which adds to the image and reputation of the city and its IPA - a satisfied investor is the most effective promotional tool possible. (iii) Reinvestment is encouraged.

13 4. Structure of the Handbook (continued) Module IX. How to develop after-care and policy advocacy Informs medium-size, low-budget cities in emerging markets of the importance of after-care and policy advocacy and provide guidelines for how a city investment promotion organization can develop an after-care and policy advocacy program. Module X. Next steps: moving city investment promotion forward Assists a city set up an investment promotion agency and implement investment promotion activities, identify priorities for investment promotion and establish a monitoring and evaluating success.