Asia is the Key Growth Region for FDI, Finds Frost & Sullivan
- Along with healthcare and ICT sector preference, R&D and manufacturing activities represent key investment focus areas
LONDON, Nov. 26, 2014 /PRNewswire/ -- In spite of the recent drop in
foreign direct investment
(FDI) inflows, most developing economies have remained buoyant. According to a new Frost & Sullivan's global research paper, titled
Foreign Direct Investment
, Asia is still seen as the key growth region for targeting FDI. At the same time, a further decline for developed economies is confirmed.
The Frost & Sullivan's analysis covers global FDI trends, provides perspectives of Investment Promotion Agencies (IPAs) based on insights that have been obtained from a survey of 35 senior-level officials working in IPAs across the globe and best practices in investment promotion.
For complimentary access to more information on this research, please visit: http://corpcom.frost.com/forms/EU_PR_CCarella_FDI_24Nov14
For the IPAs surveyed, the top countries IPAs target as a source of FDI are China, Germany, the United States, Japan and the United Kingdom. The key investment focus areas across regions include technology-related/computer software services and healthcare/pharmaceuticals/biotechnology. In addition, a large majority of FDI is focused on R&D – 19 percent of IPAs put it as a priority segment, followed in close second place by manufacturing.
"Behind IPAs' preference for certain types of FDI lies strong economic rationale," explains Frost & Sullivan Public Sector Practice Director Richard Wong. "Factors such as the alignment of a particular type of FDI with national plans, the types of FDI that have historically worked, and the potential generation of high value-added activities and employment opportunities strongly influence IPAs' decisions in this regard."
To stimulate FDI, IPAs conduct promotional activities through various channels. Of the existing promotional channels, face-to-face, email and phone call are used most frequently. Investment tours/missions abroad are also popular tools employed to drive client development. The maintenance of long-term relationships was cited by 45 percent of IPAs as being an integral factor in the success of their promotional schemes.
"Nonetheless, the increasing competition for FDI, lack of sufficient funding, and inability to meet the growing demands of investors have been distinct challenges," notes fellow Research Analyst Sara Lai. "The insufficient coordination between government agencies has also been a cause of concern for IPAs."
While global and regional competition for FDI share has presented problems, it has also improved servicing and decreased bureaucracy. Other issues surrounding funding and coordination with agencies, however, need to be actively tackled. Remedial measures taken thus far include increased collaboration with local FDI players to reduce costs, and efforts to involve IPAs in all strategic government economic engagements.
"IPAs must consistently act as one-stop-shops, providing all forms of pre- to post- investment assistance to the investor," concludes Strategic Partnerships Director Iain Jawad. "Agencies can also improve their success rates through greater strategic focus, prioritization, and personalized approaches to client engagement."
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.
Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.
- The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
- The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.
For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?
Contact Us: Start the discussion
Subscribe: Newsletter on "the next big thing"
Register: Gain access to visionary innovation
Contact:
Chiara Carella
Corporate Communications – Europe
P: +44 (0) 20 7343 8314
M: +44 (0) 753 3017689
E: chiara.carella@frost.com
Share this article