1 / 10

Understanding Investor Decision-Making Overview of the Site Selection Process

Understanding Investor Decision-Making Overview of the Site Selection Process. Robert Whyte Sydney, Australia December 2010. Drivers of Location Decisions. Most important factors influencing location of companies in 2007-2009 (% of TNC responses) Size of market (21%)

avram-johnston
Download Presentation

Understanding Investor Decision-Making Overview of the Site Selection Process

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Understanding Investor Decision-MakingOverview of the Site Selection Process Robert WhyteSydney, AustraliaDecember 2010

  2. Drivers of Location Decisions Most important factors influencing location of companies in 2007-2009 (% of TNC responses) • Size of market (21%) • Growth of local market (20%) • Access to international/regional market (10%) • Stable investment environment (10%) • Availability of skilled labor force (9%) • Availability of cheap labor (9%) • Access to natural resources (6%) • Government effectiveness, incentives (5%) • Others (10%) Source: UNCTAD World Investment Prospects Survey 2007-09

  3. What Investors Expect? 1. Economic reasons/motivations to invest • Market • Resources • Efficiencies • Strategic assets • Good business climate for FDI • Good business facilitation Investor surveys tell us:

  4. Investor Perceptions of Business Climates • Overall there is an optimistic outlook toward the global business environment for 2012. Level of TNC Optimism for the 2010-2012 Global Investment Environment 1: very pessimistic, 5: very optimistic Source: World Investment Prospects Survey 2010-2012, UNCTAD

  5. Investment Facilitation and the Business Environment • Good facilitation (GIPB score) by IPIs is strongly correlated to the quality of their business environments (Doing Business Rank) • But IPIs may have the biggest impact where they can provide otherwise absent transparency. This is the role of investment facilitation. • Note: GIPB assesses 183 national IPIs Weak  GIPB Score Best Practice • Top 3 GIPB in the Pacific • Fiji (67%) • Vanuatu (45%) • Tonga (40%) • Top 3 Doing Business in the Pacific • Vanuatu (60) • Samoa (61) • Fiji (62) Vanuatu Samoa Fiji Tonga Weak  Doing Business Rank Best Practice

  6. The Site Selection Process Important information:

  7. What is the Long-Listing Process Like? Define projects needs… • Select long list of countries • Broad data comparison >>> Labor Cost, Taxation, Infrastructure • Desk Research >>> Number of locations too long to visit, too expensive!! • 2-3 weeks to gather information and move to short list >>> If information not available location will most likely to fall out the list • Very often long-listing is outsourced to site location consultants >>> with few exceptions some few specialized consultants manage long listings and sometimes they also do short-listing too • Information sources are mostly online >>> often site location consultants use their own existing data from other projects • Limited contact (telephone/email) with IPI >>> only when specific information needed

  8. Business Outsourcing Long-Listing Process: Costs, People, and Business Environment A T Kearney Global Services Location Index score Financial Costs 40% People Skills and Availability 30% Business Environment 30% Compensation Costs 80% IT/BPO experience and skills 40% Country Environment 60% Labor Force Availability 20% Infrastructure Costs 10% Country Infrastructure 20% Educational Skills 15% Tax and Regulatory Costs 10% Cultural Adaptability 10% Language Skills 15% Security of IP 10% Source: A.T. Kearney Attrition Rates 10%

  9. What can the IPI do to Influence Investors? Make it onto the Long List!! • Understand company objectives in priority sectors • Target only those sectors in which country is able to compete (benchmark your location again and again) • Have quality information available to meet company needs at long-listing stage • Be able to source more detailed information for the company at the short-listing stage • Provide international business standards of customer service • Understand who makes decisions • Multipliers (site location consultants) are an IPI’s best friend! Facilitation - information, information, information

  10. Thank you. Questions

More Related