4 Insights from Recent FDI Leaders Gathering

Two weeks ago in Frankfurt, more than a dozen heads of investment promotion agencies convened for the FDI Leaders Network. The leadership group gathers two times per year to exchange ideas around global FDI trends, best practices and industry challenges. 

Steve Duncan from our European-based sister agency, C Studios, had the privilege of joining along with colleagues at OCO Global, who hosted the event at their Frankfurt offices along the Main River. In addition to a healthy exchange of ideas, four companies representing the semiconductor, electric vehicle, quantum and advanced manufacturing sectors shared insights from their recent site selection experiences.   

Below are four take-aways that resonated most from the two-day meet-up.  

1. New Industries Bring a New Level of Capital Investment…and Complexity

Companies discussed the capital-intensive nature of investments in semiconductors, EVs and quantum, often into 11 digits. That’s a lot of zeroes that comes with a lot of risk, so they admittedly have been asking for incentives to help alleviate some of that risk. 

However, this has challenging optics when it comes to working with governments. FDI leaders lamented a change in discussion topics with companies from business case first to incentives first. The latter is becoming the norm these days.  

2. Money Is Great, But SMEs Still Need a Solid Business Case

The lone SME in the group cautioned that not everyone wants incentives first. For many smaller firms, it is still about the business case for them and should be for the communities as well. A lot of behaviour in the investment promotion space has been influenced by these mega projects, but we mustn’t forget the bulk of companies out there that still have the standard needs and create value.

3. Site Selection Is Often An Emotional Decision

Data is more plentiful and powerful than ever, but still can’t trump the strong desires of a CEO wanting what he or she wants. One of the companies mentioned a senior executive wanting a country added to the short list because of travels there when he was young, and another added because it was home to his favorite football team.  

A second company mentioned “We know what our chairman wants” when referencing locations for a project. This underscores the value of your place having a strong brand that resonates with decision-makers. Data alone is not always enough to win the decision.

4. New Business Attraction Generates Headlines. Expansions Generates Jobs.

While less common among U.S. states and regions, several investment promotion agencies mentioned that they are not able to track expansions as a part of their KPIs. One of the companies in the room quoted stats about most jobs coming from existing industries, and said it’s a missed opportunity.  

Indeed it is. In our experience, many of the best job creation opportunities come from business retention and expansion. In fact, many companies with expansive footprints want to grow where they already are instead of opening elsewhere. As the FDI space shifts toward value over volume and faces risks due to geo-political pressures, ensuring that expansion projects are counted is a wise move for the future. 

For more insights on FDI, you can follow C Studios on LinkedIn. C Studios is DCI’s Netherlands-based joint venture with OCO Global focusing on FDI marketing in Europe and beyond. If you’re looking to get on the map in target markets overseas, reach out to Steve Duncan, Managing Director, at [email protected].