FDI

It is the main goal behind attracting FDI: job creation. Fortunately there are many other ways for creating jobs than only relying on FDI… I told already about the impressive decrease of job creation by FDI in France, which has been almost 50% over the last year. A French business analyst present at the California Tech Showcase (held in La Baule June 5,6), stated that for creating new businesses and new jobs, one needs to dare to take a risk. This capacity of risk taking is according to him something that is culturally defined: in the USA a lot of people do, in Europe not… So we just need to change of state of mind in Europe! Easy no???
To see the interview on the California Tech Showcase (in French only): http://tf1.lci.fr/infos/podcast/pleinecran/0,,3871918,00-plein-ecran-juin-california-tech-showcase-.html

This is indeed possible! During the La Baule World Investment Conference (WIC) a few days ago, a special meeting point was organized between multinationals and national investment promotion agencies. Although it took place at a very early hour after a very late night program, everybody was particularly engaged in the debate. The focus was on concrete measures of how to increase the competitiveness of Europe for investing companies. Several interesting points were made, going from more and better organized airports, to the use of English as a first language at school, to improving import and export taxation rules. The minutes of this special meeting will soon be available. If you are interested by getting a copy, let me know!

A few days ago, during the La Baule World Investment Conference, the Public advocacy group for European attractiveness (PAGEA) met with Danuta Hübner. The PAGEA is the gathering of the 27 national investment promotion agencies of Europe. This group would like to bring Europe’s attractiveness, its strengts and weaknesses, to the attention of European and national policy makers. Europe has the Lisbon agenda which helps Europe becoming more attractive, but there is no European commissioner for European attractiveness, or existing ‘marketing’ documentation about Europe as a whole, to be used for attracting potential investors. Also, large international studies such as the UNCTAD World Report or Ernst & Young’s European Attractiveness Survey still put a lot of emphasis on the individual European countries, whereas Europe as a whole would be much more of a comparaison facing giants (in terms of consumer markets for example) such as China, India or the US. Mrs Hübner understands this missing element and will start thinking of possible interventions at the European level.

Some remarks that crossed my head while reading the Ernst & Young’s European Attractiveness Survey, the UNCTAD study on World Investment and some articles that appeared in the press the last few weeks.
France remains attractive (see also one of my former posts: http://www.western-france.info/sophie/?p=79), it ranks second this year (behind the UK) in terms of numbers of FDI projects. But, a very important issue, the job creation resulting of these investments was divided by two this year compared to last year. What does this mean? Foreigners do not want to create jobs in France (fiscal or legal complications with creating jobs)? Or they can not create jobs (they intent to, but do not find enough people on the job market)? Or the projects changed compared to last year (even less manufacturing projects:creating generally a lot of jobs)? Or, expanding companies change strategy and start with very small units, maybe due to the changing global economic situation?
It would also be interesting to see if this situation is the same in other European (Western and Eastern) countries. If you are reading this and having some comparable data or other points of view, feel free to post your comment!

For the past five years, the World Investment Conference has presented annual awards for both the best investment and the most dynamic European investment promotion agency. In 2008, these two prizes have been combined to form a single award in recognition of the fact that outstanding investments do not materialize without effective support from a well-organized development agency.
Thus the 2008 awards honoured four international investors together with four European development agencies for projects leveraging innovation and favouring job creation.
The winners were:
Solfocus and Interes + the Regional Development Agency of Castilla la Mancha for the setting up of their first photovoltaic concentrator system in Europe.
Sony Europe and SARIO (Slovak Agency for Investment and Trade) for the creation of a TV manufacturing site and a distribution center for Eastern Europe.
University of Saint Edward’s and the Invest in Western France agency for the creation of an American university in Western France.
Valeo and FIPA (Tunesian Investment Agency)for setting up an important industrial site.
BT and UTDH (Hungarian Investment Agency)for creating 600 new jobs in Hungary.
Next year, make sure your agency or company is applying for these awards, because the winners get, apart from a nice diploma, an extensive free communication campaign.

Each year Ernst & Young presents their annual European attractiveness survey at the World Investment Conference in La Baule. The 2008 edition shows that the world’s regions have become much more equal in terms of where businesses leaders want to invest. However these investor perceptions are not yet backed up by the reality of investment flows. Although 47% of survey respondents ranked China as the most attractive investment destination, in reality it still draws only 8% of global FDI inflows according to the UNCTAD. While only 33% of respondents ranked Western Europe as their top choice investment location, the region still accounts for 37% of global FDI inflows according to the same UNCTAD study. So even if reality and perception are not the same at this moment, challengers for the European and American head positions are growing.
If you would like to read more about this year’s survey which was presented at the World Investment Conference in La Baule on June 5th 2008, take a look at the Ernst & Young website: http://www.ey.com/global/content.nsf/France/Press-release-attractiveness-Europe-EN-05062008

Indeed, the last few weeks have been a little slowed down on the FDI blog front with the organisation of the World Investment Conference in La Baule last week. But after the success of the conference I’ll will start writing regularly again! First a few articles about things that happened in La Baule, so as to catch up with the news in a few days!

The French magazine Le Point confirms it for the third time in a row: Nantes is the best place to live in France http://www.lepoint.fr/actualites/premiere-de-notre-classement-nantes-le-phare-ouest/1037/0/240579 . The people that are living in Nantes, such as myself, knew this for a long while already!
The interesting thing about Nantes is its very nice mixture of cultural events and favourable business environment. As an example, the old docks from this harbour city are today being reconverted into an area where highly impressive artistic events, architecture, business locations and restaurants are intertwined. Just have a look at the street theater from Royal de Luxe, the urban planning for the Ile de Nantes and the new Palace of Justice designed by Jean Nouvel and you will understand.
See you soon in Nantes!

Last April was officially set up the Public Advocacy Group for European Attractiveness. This Group gathers all the national Investment Promotion Agencies of Europe to bring Europe’s attractiveness to a higher awareness on national and European level. The next meeting of the Group is planned to take place during the World Investment Conference in La Baule France, on June 6th. During this particular meeting, the Group will discuss leverages for improving Europe’s attractiveness with multinationals investing all over the world. A promising debate! For more information, please feel free to contact sophie.labrosse@europeplus.org.

Indeed, this is a subject a lot of us actually ignore, but Europe is the most attractive place in the world for attracting FDI. The problem is that we are focused most of the time on the individual countries, and not on the paneuropean result. But we’ll learn quickly enough that it is important to put ourselves in a paneuropean framework…
Here is story number three.
We are meeting an american investor who tells us about his plans fro setting up a new manufacturing unit. Completely innocent we assume that he is talking about setting up in India, China, or other low-costs destinations far away from our Europe. We tell him that indeed Europe is probably not the place he is looking to develop his business and want to quit. “Oh no”, he says, “I thought Poland was in Europe? And besides, I would also like to extend our industrial design unit in Germany, but of you think I am wasting my time….”. We quickly learnt that the Eastern European countries are a very welcome way of completing the portfolio for attracting FDI to Europe!