Most countries, and many big cities and regions, have Investment Promotion Agencies (IPA for short). They exist to promote what’s call Foreign Direct Investment (FDI).
That doesn’t mean getting investors to buy shares and bonds, but rather to set up companies (or buy existing ones through acquisition) or, on a bigger scale, invest in infrastructure such as airports, roads, hospitals and so on.
There’s no doubt that such promotion is necessary.
Certainly when it comes to international business expansion, most executives tend to only consider the “usual suspects” or places they have been to themselves or have some connection with. Some countries seem too remote, and there’s genuinely a fear of foreign languages.
Worse, people have negative biases or are easily dissuaded by things they may have seen or heard on news bulletins. If the US president can watch a clip and thereby assume the streets of London are dangerous, it’s unsurprising that business people can have a vague memory of civil strife, famines and uprisings and assume that entire countries are impossible for them.
Even after persuading investors that the current reality of their countries is bright, IPAs then also have to compete with other countries and regions for those scarce investment funds. Often that means offering incentives — the most common of which is reductions or exemptions from tax for a number of years.
So, in a way, IPAs have to sell their countries and regions to investors in much the same way as B2C firms promote their wares to retail customers. That generally means relying on advertising and exhibitions.
If we assume that a target executive has already decided on the country (or at least the continent), and it’s a matter of promoting one region or city, perhaps these help. But the message has to be instantly compelling, as one can flick a page in a heartbeat, and walk past an exhibition stand almost as quickly.
It’s difficult, because, despite choosing to attend, most business visitors steer a wide path because they don’t want to be hassled by salespeople. So they won’t come near if their inbuilt assumptions are negative. However, if what they see is a stand promoting a country they’re familiar with and actively considering, they may be encouraged to stop and take a look.
I don’t think exhibitions are the right way to get the new converts that the IPAs really seek
My experience is that very few real decision makers and influencers go to exhibitions at all, and those that do are very unlikely to have the mindset of considering alternative international expansion opportunities. With possible rare exceptions, even exhibiting from the viewpoint of “needing to be seen” and “because the competition is here” is, I judge, a waste of time and money (and boy, is it expensive!).
A much better medium is conferences.
If an IPA can give a presentation, they’re assured (despite the diversion of smartphones) of reasonably close attention to their message for 20–30 minutes. It then just comes down to the audience being right.
However, thinking back to three big London events that I’ve attended in the last year or so, with IPA speakers and run by different organisations, I’d guess that over 90% of the audience were vendors looking for customers themselves, and hoping to spot those elusive potential investors amongst the audience.
I know that’s saying that is hypocritical, as it was the main reason I was there too.
So, I agree that countries and cities should promote themselves — but what’s the right way of doing it?
How to promote a country or region for FDI
If it’s one of the “usual suspects” like the USA, Australia or a Western European country, the only thing that IPAs can usually achieve is encouraging businesses towards certain regions or cities.
However, if it’s a less well-known destination, specific “Reasons Why” need to be explained — spelling out the country’s unique advantages (and, of course, any incentives on offer) — to wake up potential investors to the opportunities.
So, as what’s attractive and what’s not is clearly not the same for every business, IPAs need to research which businesses they want to reach and adapt their message for each. Those will be the companies that can clearly benefit from the specific advantages of the country. Then they need to find the decision makers in those companies. It’s much harder work and it’s much less visible, but it’s worthwhile.
Once the targets are identified, I think it’s best to then invite them to small conferences specifically about the country or region, where the audience can give their undivided attention.
Business people like group events because they have less fear of being pressurised — but at the same time, if it’s a small group in an attractive venue, it will feel more exclusive and attendees will pay more attention.
While audience participation and networking are important, there should always be a quality agenda of presentations to justify going to the event.
This is an area I’ve worked in in the last few years. Whilst when I’m talking to business people about international expansion, we’ll consider all 195 countries of the world, I also see great benefit in them learning more and meeting professionals from their potential expansion countries through these events. And IPAs can leave a lot of finding the audience and organising the event to a specialist who understands their mission and can achieve the results they want far more cost-effectively.
It’s harder work, but it’s worth it.
Would you like to discuss this in person? The author, Oliver Dowson, offers growinternational.org subscribers free initial consultations on any aspect of international expansion – just get in touch via our contact page
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