Global Investment Promotion Best Practices 2012 Release of Global Results

World Investment Forum, Doha, Qatar, 20th April 2012

Robert Whyte

Global Product Specialist, Investment Policy and PromotionInvestment Climate Department, World Bank Group

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Global Investment Promotion Best Practices (GIPB 2012)

♦ Objectives;1. To share the GIPB 2012 global results; and2. To use the GIPB 2012 results along with the panel discussion to demonstrate the

importance and relevance of providing high quality facilitation services to assist potential investors during their site selection and entry processes.

Presentation of GIPB 2012 Results

Robert Whyte Global Product Specialist, Investment Policy and Promotion, World Bank Group

Panel

Javier Chamorro Executive Director of PRONicaragua

Stefan Bude President and Chief Financial Officer of DAA Draexlmaier Automotive of America LLC

Per-Erik Sandlund Director-General, Invest Sweden, SwedenJoe Phillips Managing Consultant, OCO Global

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What is GIPB?

Implications for IPIs

2012 Global Results

Sector FacilitationAgribusiness and Tourism

Contents

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What is GIPB?

What does GIPB measure?

The ability of IPIs to meet investors’ information needs through

– Web sites– Handling investor inquiries

What does GIPB NOT measure?

Economies’ overall FDI competitiveness

Economies’ business climates IPIs’ effectiveness in other

functions

Reducing investors’ risk perceptions

Affecting investors

preconceptions about your

locationEncouraging investors to look at new

opportunities.

Affecting investors’

perceptions of your IPI

The Information Gap

GIPB Mirrors Companies’ Site Selection Process

Stepping into the shoes of two companies (tourism and agribusiness) a site location consultant assessed:

– IPI Web sites - The extent to which IPIs offer country and sector information suitable to assist potential investors in their location search

– Investor inquiry handling - A mystery shopper approach tested each IPI’s ability to interact with and manage two distinct investment inquiries, provide relevant information and make a business case for investment.

Estimates suggest that there may be between 30,000 and 40,000 green field FDI projects across the world each year

There may be well over 1,000 national and local IPIs at various geographical levels attempting to “win” them

Harding & Javorcik (the University of Oxford), using empirical data on 124 economies, suggest that the ability of IPIs to help address gaps in information and assist with bureaucratic processes does make a positive difference to inward investment flows.

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Contents

Implications for IPIs

Sector FacilitationAgribusiness and Tourism

What is GIPB?

2012 Global Results

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Sub-Saharan Africa

South Asia

East Asia and the Pacific

Middle East and North Africa

Europe and Central Asia

Latin America and the Caribbean

OECD High-Income

0% 10% 20% 30% 40% 50% 60% 70%

25%

32%

36%

41%

44%

48%

64%

GIPB 2012 Overall Results (out of 100%)

OECD economies still make up the majority of leading IPIs in GIPB 2012, but individual IPIs from other regions are also performing strongly, including the overall highest performer, Nicaragua.

IPIs almost uniformly performed stronger on the Web site assessment than on inquiry handling.

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Good FDI Facilitation is Hard to Find

Few national economies are now without an IPI, and almost all have a Web site.

However, the quality of Web sites varies greatly, from best practice to very weak.

Few IPIs provide a consistent professional service to inquiries with a thorough provision of information and customer service.

There were little differences in scores within regions between the two inquiries. O

ECD High

-Inco

me

Latin

Am

erica

and

the

Caribb

ean

Europ

e an

d Cen

tral A

sia

Midd

le Eas

t and

Nor

th A

frica

East A

sia a

nd th

e Pac

ific

South

Asia

Sub-S

ahar

an A

frica

0%

10%

20%

30%

40%

50%

60%

70%

80%

Overall Score Web site Tourism Agribusiness

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Many IPIs achieved weaker scores in GIPB 2012 compared to GIPB 2009

The level of investor facilitation services often remains low.

Latin America and the Caribbean, and Middle East and North Africa achieved overall higher scores than in 2009.

Some regions actually improved on average for their Web site evaluation, but this was often offset by falls in their inquiry handling scores.

Trends GIPB 2006 – 2009 - 2012

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GIPB 2012 – Differences in Regional Performance

– Strong variations in Web sites scores between sub-regions

– All three sub-regions earned low scores for inquiry handling

East & South Asia and Pacific

– In West and Central Africa, some IPIs still lack a Web site and working phone and email connections.

– Region-wide, most IPIs need to focus on developing better market information.

Sub-Saharan Africa

– Some examples of high-performing Web sites in the region (notably in North Africa)

– A modest improvement in inquiry handling.

The Middle East and North Africa

– Many IPIs in Central America are close behind best performer PRONicaragua

– Caribbean IPIs made significant strides since GIPB 2009

– South American IPIs generally have gained ground since GIPB 2006 but many still need to improve their online presence.

Latin & Central America and the Caribbean

– Central Asia – investors still find it difficult to contact IPIs

– IPIs need consistency in handling inquiries, and doing business in English.

– Non-OECD high-income Europe compares favourably to the world’s best

Europe and Central Asia

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GIPB 2012 – Web Site Results

Sub-Saharan Africa

East Asia and the Pacific

South Asia

Middle East and North Africa

Europe and Central Asia

Latin America and the Car-ibbean

OECD High-Income

0% 20% 40% 60% 80% 100%

41%

54%

54%

65%

66%

67%

84%

Information Architecture (10%) Design (10%) Content (50%)

Promotional Effectiveness (30%)

Worldwide, there was an improvement of 3% from GIPB 2009, but this masks a lack of improvement in actual Content provision, the most important metric

Most regions scored strongly in Architecture and Design, with some general improvement in Promotional Effectiveness.

Implying that more IPIs now understand that their site is a valuable marketing tool with the technical side well covered.

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Best Practice Web Sites Are Emerging in All Regions

But IPIs are still not providing sufficient information on their Web sites – which is the primary value-add for the investor.

The quantity and quality of sector-specific information decreased in all regions except for Latin America and the Caribbean

GIPB 2012 – Web Site Results

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1. ABA–Invest in Austria

2. CzechInvest (Czech Republic)

3. Austrade (Australia)

4. Germany Trade and Invest

5. Invest in Denmark

6. Invest in Spain

7. Investment Support and Promotion Agency of Turkey

8. PRONicaragua (Nicaragua)

9. Department of Investment Services (Taiwan, China)

10. Hungarian Investment and Trade Development Agency

Top 10 IPI Web Sites in the World

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API-Mali (www.apimali.gov.ml/api/en/) – major strides in the last three years, improving its online presence from where it had no investment promotion Web site in 2009 to a globally strong Web site in 2012.

Web site Assessment

Moving towards Best Practice from a very low base: Three Examples

Sierra Leone Investment and Export Promotion Agency (www.sliepa.org) - Useful information across key sectors and a “Why Sierra Leone” section listing reasons to consider the location.

St. Kitts Investment Promotion Agency (www.stkittsipa.org) - Helpful Investors’ Guide and a frequently-asked-questions section listing the IPI’s investor support services.

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World performance deteriorated from GIPB 2009 by 6 percentage points.

Most IPIs still struggle to respond to investors’ information needs - just over one third of IPIs provided responses in both sectors

Only two IPIs (from Nicaragua and Hungary) scored at best practice levels (80%+), a further 8 IPIs gained a ‘good’ score (60-79%)

Two other non OECD High-Income economies were also in the top 6: Cyprus and Hong Kong SAR, China.

Although more than half of IPIs were easily contactable, only 21% provided a response to both inquiries, and the quality of response was highly variable.

In most cases, the lead was not followed up after the response was submitted, with only 16% of those who responded following up.

Investor Inquiry Handling

Sub-Saharan Africa

South Asia

Middle East and North Africa

East Asia and the Pacific

Europe and Central Asia

Latin America and the Car-ibbean

OECD High-Income

0% 10% 20% 30% 40% 50%

10%

10%

16%

18%

23%

29%

43%

Overall Tourism Agribusiness

World Average

GIPB (22%)

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Is Anybody There? Few IPIs are Ready to Answer When Investors Come Knocking

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1. PRONicaragua (Nicaragua)

2. Hungarian Investment and Trade Development Agency

3. Invest in Greece

4. Invest in Finland

5. Cyprus IPA

6. InvestHK (Hong Kong)

7. ABA – Invest in Austria

8. Invest in Sweden Agency

9. aicep Portugal Global

10. Invest in Denmark

Top 10 IPIs at Inquiry-Handling

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PRONicaragua’s Agribusiness response scored the highest, by answering all the investor’s business need and excelling in:

Investor Inquiry Handling

Reaching Best Practice: Nicaragua

Branding and Format - Document was designed in an attractive and consistent manner.

Answer Quality - Each question was answered fully, and presented in an engaging manner with a mix of text, charts, tables, and maps.

Business Case - Specific reasons why the investor should select the location were included. It sold not just the location, but the services of the IPI as well.

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Contents

Implications for IPIs

Sector FacilitationAgribusiness and Tourism

What is GIPB?

2012 Global Results

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IPIs Where Agribusiness Is a Priority Sector

Interest in agribusiness spans the globe.Of the 189 IPIs assessed in GIPB 2012, 118 regard agribusiness as a priority sectorMore than half the IPIs in each of six GIPB regions (all but OECD).However, of the 118 that claim to prioritize agribusiness, only 104 provide information in English on their Web sites and only 91 present sector profiles.

Provision of Basic Agribusiness Sector Information

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IPIs Where Tourism Is a Priority Sector

Of the 189 IPIs assessed in GIPB12, 107 include Tourism as a priority sector for their economyOf which only 78 with sector profiles.

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Region

Sector

Profile

Information

provided on

Key Strengths

Specific

Statistics on

the Sector

Data

Sourced and

Dated

Information

Regularly

Updated

Contact

Information for

Specialized

Staff

East Asia and the Pacific10 7 5 1 0 1

Europe and Central Asia11 11 6 5 1 0

Latin America and the Caribbean21 20 17 9 2 5

Middle East and North Africa7 4 4 2 1 1

OECD High-Income7 7 6 4 5 2

South Asia1 1 1 0 0 0

Sub-Saharan Africa21 20 13 4 3 4

Total78 70 52 25 12 13

Provision of Basic Tourism Sector Information

Contents

Implications for IPIs

Sector FacilitationAgribusiness and Tourism

What is GIPB?

2012 Global Results

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Conclusions: Some Fundamentals

Make sure that the investor can contact you – every time! The ultimate “weakness” for an IPI is failing to respond to an investor’s

contact Use your Web site as a key promotional and facilitation tool. Be prepared - gather and package information in advance Mean what you say and follow through

Services/Information offered but not delivered If an IPI says that a sector is a priority it is self-defeating to then say that you know

nothing about it

Conversely, if you don’t mean it, don’t say it!

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-20%

30%

80%

Inquiry Handling

Availability and Contactability

Responsiveness and Handling

Response

Customer Care

Conclusions: IPIs Should Focus on the Basics

Inquiry Handling

0%

20%

40%

60%

80%

Web site Assessment

0%

20%

40%

60%

80%

IPIs performed better in the technical areas that are easiest to provide - such as design of the Web site, or contactability in Investor Inquiry Handling.

But providing relevant investor information is the most fundamental function of an IPI, and this is where IPIs across GIPB 2012 are most weak. IPIs need to carry out detailed research or information gathering – investors come to the IPI for information they cannot easily source themselves.

0%

20%

40%

60%

80%

Web site Assessment

Information Architecture DesignContent Promotional Effectiveness

Thank you

Questions

Discussion Panel

Javier Chamorro, Executive Director of PRONicaragua

Stefan Bude, President and Chief Financial Officer of DAA Draexlmaier Automotive of America LLC

Per-Erik Sandlund, Director-General, Invest Sweden

Joe Phillips, Managing Consultant, OCO Global