Click here for search results


Promoting Inward Investment

The promotion of inward investment means to attract businesses to an area from elsewhere in the country and from other countries. Attracting large manufacturing and service sector employers into communities is one of the most difficult, frustrating and riskiest of all LED strategies. This is partly because there are far fewer investors than there are communities seeking to attract them and many communities are prepared to offer massive incentives to inward investors. Foreign direct investors often prefer Greenfield, edge-of-town sites. To accommodate these wishes, communities often over-ride their planning policies in order to attract the investment. This may bring with it considerable problems and may contribute to urban sprawl and transportation problems. Careful consideration should be given to the costs and benefits of attracting inward investors. When locating a business, inward investors seek:

  • A stable macro-economic climate

  • A stable political and regulatory environment

  • Market access and open competition

  • A welcoming environment

  • Available sites and/or premises

  • Appropriate, available and reliable utilities and transportation

  • Available skilled workforce

  • Available local suppliers and resources

  • Appropriate education, training and research facilities

  • A good quality of life, especially when bringing ex-patriots

  • Manageable regulation and taxation systems

  • Incentive schemes


The benefits when success is achieved can be great. Besides direct employment, an increase in the tax base and indirect employment, there are potential wins for the local community through up-skilling of the workforce, increases in wages, and opportunities for local SMEs that supply and buy from these investors. Inward investment strategies are likely to be successful when:


  • They are a component of a broader LED strategy

  • The community has the appropriate hard and soft infrastructure in place or available to support the likely investments

  • Targeted investments fit the competitive advantage of the receiving community (normally a sector/cluster approach is likely to be most successful)

  • Marketing strategies are carefully prepared, budgets are appropriate and follow up procedures are in place

  • Incentive programs are considered, varied and not excessive

  • Staff involved in attracting strategic investors have an understanding of investment needs and what their community has to offer


Opportunities for local businesses are optimized through careful aftercare programs. This means that when a new investor is attracted to a community, every opportunity is taken to encourage the investor to source his/her supplies locally, enabling supply chain advantages to be exploited locally. This is most successfully achieved through developing an investor aftercare program. Such programs are aimed at ensuring investors are happy and that they are given every opportunity to source their inputs from the local community.


Back to top 


Permanent URL for this page: