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Blog Post: November 2016 Back to Blog

Mentioned in this post: Incentives Monitor

On the road with the IPAs in Germany, Cleveland, and London

  • 14th Nov 2016
  • Daniel Callaghan
Image of Frankfurt airport

A busy couple of weeks on the road has passed-by without major incident apart from the countless airport sandwiches, cola refills and forced gate-checking of some standard-sized hand luggage. Save for these First World problems, I enjoyed engaging with IPA professionals and corporate executives across three of the world's major FDI donor markets in Germany, US and UK. Safe to say that I heard (and pronounced) the words 'Brexit' and 'Election' more than a few times. I learned much, however, that I thought I should try to share with birds-of-a-feather.

I learned of four separate methods of planned engagement with 'non-EU Headquartered MNCs'. It's a mouthful but get used to hearing that term.

Having spent a week in Germany; I was impressed (but not surprised) at the German business community's seemingly endless capacity to iterate its own varied responses to economic challenges. The external shock and perceived opportunity presented by the post-Brexit-vote, pre-Article 50-triggering state of limbo currently being experienced across London, Dublin and Brussels has not gone unnoticed in regional economic hubs from the Elbe to the Neckar. Travelling from south-to-north, I learned of four separate methods of planned engagement with 'non-EU Headquartered MNCs'. It's a mouthful but get used to hearing that term. UK Plc had better come-up with an innovative solution for throwing a collective hug around current investors as there is no doubt that the big boys of the continental IPA scene are planning - and have already commenced - the charm offensive.

Having just returned from the IEDC Annual Conference in Cleveland, OH; on a whistle-stop tour of the Midwest; I was struck by a couple of thoughts. The most fleeting of which is that the US Midwest is a region with huge potential; that could benefit from some more joined-up thinking in terms of air links that don't rely so heavily on a detour to Chicago O'Hare.

Many EDOs feel that they only pay lip service to the importance of implementing effective key account management

If I'm thinking it; surely some similarly-aged corporate decision-maker, from out-of-state, has thought it too. I also participated in a panel discussion in Cleveland that gave rise to a second, and more considered, thought. I spoke, at length, on the importance of implementing effective key account management with members of the EDO community and, initially, was quite surprised that our session managed to hold the attention of a room of 100+ EDO professionals for 90 minutes but post-session I learned that many EDOs feel that they only pay lip service to the topic and they recounted more than a few tales of 'lost' investors which upped (their significant) sticks and moved to another state at the promise of a compelling incentive package. WAVTEQ's Incentives Monitor tool regularly tracks such movements and we can attest the importance of corporate expansions of existing investors accounting for anything up-to 80% of new job creation in many regions within North America. This is a trend that the EDO community should get to grips with as soon as possible.

The final leg involved a stop at MIPIM UK in London. Whilst seemingly quieter than recent years; the preponderance of 'Gateway' associations aroused my interest and almost felt like a mission-creep towards the old RDA-landscape, if only in superficial terms. The show hosted a selection of UK cities putting their best foot forward including Manchester, Liverpool, Birmingham, Leeds, Glasgow and the Northern Powerhouse mixing with investors from a diverse range of investors including the Teacher Retirement System of Texas, Alberta Teachers Retirement Fund, GIC Real Estate, PGGM, APG Asset Management, Fosun and Bahrain Mumtalakat Holding Company. Their mere presence underlining the importance for investment promotion agencies of engaging with sources of alternative forms of investment. It appeared that Government ministers in attendance were keen to reassure the industry and overseas investors that British real estate (and the Pound and the Ecomomy) remains an attractive, and viable, proposition moving forward into an uncertain future.

Pulling it all together it seems that IPA-land is still being asked to come up with answers to questions that are continually being rewritten and solve challenges that have promised funding always 'during the next quarter'. It is hard to envy such a task. Think I'll stick to airports and oversize hand luggage...

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