How municipalities target potential investors


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USAID Sustainable Local Development Project, November 2013

Published in: Business, Economy & Finance
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How municipalities target potential investors

  1. 1. How municipalities target potential investors
  2. 2. What do we expect to achieve … New markets ? New technologies New jobs New services
  3. 3. Let’s figure out what realistic targets are …   Traditional industries Related industries that can benefit from skills and infrastructure present in the community  Industries we wish to introduce into local economy  Rather obvious practice on local level is a negative definition: What we’re not interested in.
  4. 4. Local factor conditions (sector-specific) • Labor    Availability of labor Skills, technical competences and work habits Labor costs • Land / property    Availability of market-ready land and premises Availability and capacity of hard infrastructure (Industrial) real estate costs • Knowledge  Concentration of (and access to) specialized knowledge an industry can benefit from
  5. 5. Local industrial culture (sector-specific) • Industrial tradition & business sophistication     Existing companies, their performance and position in value chain, supplier networks Availability of specialized infrastructure Industrial clusters and support agencies “Brand value of the location” • Education and training   Availability, capacity and quality of vocational, professional and university-level education Re/qualification training capacity • Research & Development   R&D centers, Industrial design, Testing, etc. Regional innovation system
  6. 6. Generating inquiries (and leads) National IPA City hall Regional IPA Chamber of Commerce Industrial Association Companies
  7. 7. Practical example: City of Trnava / Slovakia Trnava
  8. 8. Economic development strategy / 2002 Investment Attraction Goals Goal B.1 Goal B.1 PHYSICAL CONDITIONS PHYSICAL CONDITIONS FOR INVESTMENTS FOR INVESTMENTS Goal B.2 Goal B.2 LOCAL SUPPLIERS LOCAL SUPPLIERS BASE / /SUPPORT BASE SUPPORT Goal B.3 Goal B.3 COOPERATION BETWEEN COOPERATION BETWEEN PUBLIC SECTOR AND PUBLIC SECTOR AND BUSINESS BUSINESS Objectives B.1.1 Outer B.1.1 Outer Ringroad Ringroad B.2.1 Mapping B.2.1 Mapping Opportunities Opportunities B.3.1 Economic B.3.1 Economic Development Unit Development Unit B.1.2 Preparation of B.1.2 Preparation of sites sites B.2.2 Initiation B.2.2 Initiation Meetings Meetings B.3.2 Communication B.3.2 Communication with companies with companies B.1.3 Medzihaj B.1.3 Medzihaj B.2.3 Assistance to B.2.3 Assistance to Suppliers Suppliers B.3.3 Catalogue of B.3.3 Catalogue of invest. opportunities invest. opportunities B.3.4 Marketing of B.3.4 Marketing of invest. opportunities invest. opportunities
  9. 9. Investment attraction action plan Goal B.1.: To create physical conditions for investments – preparation of land, buildings, technical infrastructure. Objective B.1.1. Outer ring road The city hall in co-operation with other institutions and companies in Trnava will use all possible opportunities to lobby for the quick implementation of the governmental investment into an outer ring road. This investment will not only make better access to the largest industrial zone under preparation (Medziháj) but will also very much help to general improvement of the city center and accessibility of other smaller sites. Objective B.1.2. Potential investment sites The city will systematically monitor and prepare (physical planning, ownership, roads, technical infrastructure) sites, suitable for foreign direct investments (Zeleneč and others). Objective B.1.3. Medzihaj The city will continuously prepare the site Medzihaj (308 ha), primarily as strategic industrial zone of national importance and in co-operation with SARIO will actively promote it.
  10. 10. And how the plan worked: • In 2002 City of Trnava decided to develop a “strategic industrial zone” (304 ha) of national importance and promote it actively in cooperation with SARIO. • In January 2003 PSA (Peugeot-Citroën) decided to locate €700 million investment in Trnava to establish new car assembly facility (300.000 cars a year; 3.500 jobs). • City provided land, guidance and assistance; National government provided grant of €25 million for leveling terrain and putting infrastructure on the site. • In June 2003 construction works started; full operations of the new plant had been launched in 2006. • In 2005 PSA decided to expand the plant; invest additional €350 and create 1.800 more jobs by 2010. 2006
  11. 11. Q&A