#1UNCTAD Third Generation Investment Promotion INVESTOR TARGETING National Workshop on Third Generation Investment Promotion and Investor Targeting Tirana, 30 June - 2 July 2003 consulting Presented by, Refael (Rafi) Benvenisti UNCTAD Investment Promotion Expert ASIT#2UNCTAD consulting Third Generation Investment Promotion INVESTOR TARGETING Principles of Investment Promotion ASIT#3UNCTAD Third Generation Investment Promotion INVESTOR TARGETING The Concept Investment Opportunities + Investment Environment Investment Promotion Agency Investment Promotion Strategy Promotion Methods & Techniques consulting ASIT#4UNCTAD Third Generation Investment Promotion INVESTOR TARGETING The Process National Objectives ↓ No. of Realized Investments ↓ No. of Planned Investments No. of Site Visits No. of Meetings/Presentations No. of Investor Contacts 500 New jobs 5 Realized Projects 10 Planned Projects 50 Site Visits 500 Meetings 5,000 Contacts ASIT consulting#5UNCTAD Third Generation Investment Promotion INVESTOR TARGETING The Techniques ➤ Image Building ➤Investment Generation ➤Investment Servicing ➤ Policy Advocacy consulting ASIT#6UNCTAD consulting Third Generation Investment Promotion INVESTOR TARGETING Image Building Activities to Improve a Country's Image Within the investment community Public Relations Publications ➤ Advertising Missions & seminars ASIT#7Third Generation Investment Promotion INVESTOR TARGETING UNCTAD Image Building Requirements Identify Investor Perception & Establish Image Building Objectives A PR Firm Publications: General, Key Issues, Sectors In Within the Country Selected Media: News stories, Special Overseas events, Journalists, Markets consulting Speeches, Press releases, Studies, Reports Advertising: Specialized, General ASIT#8Third Generation Investment Promotion INVESTOR TARGETING UNCTAD Investment Generation Activities to Generate Investments Directly from Identified Investors ➤ Direct Mail and Telemarketing ➤ Industry and Sectors Specific Missions and Seminars ➤ Firm Specific Research and Direct "Sales" Presentations consulting ASIT#9UNCTAD Third Generation Investment Promotion INVESTOR TARGETING Investment Generation Activities Investor Identification Site Visit to the Country •Direct Marketing •Support Activities Follow-up consulting Win & Approve implementation Investment services ASIT#10Third Generation Investment Promotion INVESTOR TARGETING UNCTAD Investment Servicing Activities to Provide Services to Investors to Facilitate Investment Decision, Implementation & Reinvestment ➤ Pre-investment-decision ✓ Information & Counseling; Site Visits Support, Investor Hotline ➤ Implementation ✓ Expediting Services & Permits, One-Stop Service ➤ Corporate Development Support (CDS) – (Post -investment Support or After-care) - ✓ Assistance to TNC Management in Resolving Problems & Identifying New Opportunities consulting ASIT#11UNCTAD Third Generation Investment Promotion INVESTOR TARGETING Policy Advocacy Lobbying for Improvements in the Investment Climate ➤ Assisting in the Design of the Development Package (Incentives & Benefits to Investors) ➤Lobbying for Improvements in the Investment Climate ➤ Assisting in the Removal of Administrative Barriers to Investment consulting ASIT#12UNCTAD Third Generation Investment Promotion INVESTOR TARGETING Strategy The Approach to Targeting, Timing & Mix of the Promotion Techniques Targeting Sectors, Home Countries, TNC's & Executives - The exercise of increasing the cost effectiveness of the Promotion Function The Timing of & the Emphasis on the use of the different techniques - the interplay of the Investment Climate, Resources & Promotion Domestic Politics & Networking: Building consensus for FDI promotion & for improvement in the investment climate, Building support for the IPA & its sustainability - Implications: PM & Ministerial involvement in activities, domestic PR campaign, Networking for PR, Services & Funding ASIT consulting#13UNCTAD Third Generation Investment Promotion INVESTOR TARGETING Targeting Market Segmentation ➤ Matching the sector interest of investors with the identified Comparative Advantage of the country. Matching Home (source) Countries of FDI interests with Host country desires and trade policy Understanding the corporate decision making process and focusing on certain companies and executives consulting ASIT#14UNCTAD Third Generation Investment Promotion INVESTOR TARGETING The Timing & Mix The five stages of industrial purchases: awareness, interest, evaluation, trial, and adoption ➤ Image Building leads Investment Generation (creating awareness & interest) ➤ Investor Servicing and Policy Advocacy may parallel Image Building as supporting activities that improve the product (Investment Climate) ➤ Resource constraint is affecting priorities & inhibiting the use of direct "sales", PR and advertising consulting ASIT#15UNCTAD Third Generation Investment Promotion INVESTOR TARGETING Comparing Visibility & Credibility Visibility Credibility Low High Low Undiscovered Unparalleled High Unknown Undesirable Kosnik, T.J. Corporate Positioning: How to Assess & Build – a Company's Reputation. Harvard. 1988. consulting ASIT#16UNCTAD Third Generation Investment Promotion INVESTOR TARGETING Domestic Politics & Networking Building consensus for FDI promotion & The Improvement in the investment climate ➤ Building support for the IPA & its sustainability ➤ Implications: PM & Ministerial involvement in activities, domestic PR campaign, Networking for PR, Services & Funding consulting ASIT#17Third Generation Investment Promotion INVESTOR TARGETING The Effectiveness of Promotion Activities UNCTAD Method Usage by IPAs Ranking 1-9 Effectiveness Max=5 Ranking 1-10, 1=Best After care (CDS) 4 5 1 Network with 6 4.8 2 Private Sector Network With 4 4.1 3 Cham. of Com. PR Firm Presentations Outward Miss. Conf. Seminars consulting 3 3 57 4 4 4 4 3.6 5 3.6 5 10 ASIT#18UNCTAD Third Generation Investment Promotion INVESTOR TARGETING The Effectiveness of Promotion Activities Method Usage by IPAs Ranking 1-9 Effectiveness Ranking Max=5 1-10, 1=Best 3.5 6 3.5 6 3.4 7 3.2 8 TV Adver. 2 Home Coun. Org. 2 Conf. & Exhibit. Advert. In Trade Journal 85 Direct Market. 9 2.8 9 Tele Market. Adver. In Gen. 6 2.8 9 Media Inward Missions 4 2.8 9 ASIT Coopers & Lybrand - Survey of IPA executives consulting#19UNCTAD Third Generation Investment Promotion INVESTOR TARGETING Measuring Results ➤ Measuring promotion activities (inputs): ✓ Publications, PR material, incoming missions etc. ✓ Assisted investors, site visits, CDS firms ✓ Supported policy initiatives Measuring promotion results (output): ✓ Independent assessment of the image, publications, promotion activities ✓ No. of projects in pipeline ✓ No. of implemented investments, jobs created consulting ASIT#20UNCTAD Third Generation Investment Promotion INVESTOR TARGETING What are the lessons to Albania? Open Discussion consulting ASIT