By Andrew Wrobel,
Founding Partner, Content and Strategy, Emerging Europe
It’s all about profit, isn’t it? Companies, all of those included in this TOP 100 report in particular, are looking to make profit and expand. For governments and investment promotion agencies (IPAs) — public bodies whose main role is to attract and facilitate investment in a specific country — that profit is measured by an increase in GDP or the number of jobs created.
Michael Keroullé, CEO of GE Steam Power, says that IPAs should focus on success stories. “There is a lot of talk about how good the given country is, but they should offer a value story,” he says. “They must offer value to the investor.”
In its annual Investment Promotion Report, Emerging Europe looks at how governmental agencies embrace the needs of investors to increase profits by communicating the value proposition their countries offer and handling enquiries from potential foreign investors. From an emerging Europe perspective – with 23 countries taken into account – Lithuania, Estonia and the Czech Republic are the top performers, achieving a score of 62-73 points (out of 100).
Out of 11 Southheast European countries (the former Yugoslavia, Albania, Bulgaria, Romania and Moldova), Romania and Slovenia ranked the highest with scores around 50 points. Invest Romania and Spirit Slovenia were also the only investment promotion agencies whose performance in 2019 was better than the previous year.
“The quality has improved from last year and it’s great to see that the promotion of our market is improving,” says Olga Grygier-Siddons, former CEO of PwC CEE. “However, the [investment promotion] agencies don’t appear to have addressed all the challenges. Digital capabilities, for example, are not used everywhere. Investors look for skills, especially digital skills, so the role of websites is crucial as they symbolise digital competencies. More needs to be done here.”
Enterprise Estonia, which represents one of the most advanced digital societies in the world, has led the way in making use of automation in its enquiry handling process. “There are a lot of enquiries which need to be taken care of, and automation helps us with that,” says Viljar Lubi, Estonia’s vice minister of economic affairs and communications. “Around 85% of the enquiries we receive are now dealt with automatically.”
Peter Stracar, former CEO of GE Europe also welcomes the progress that has been made but called on the region to do more to promote its know-how. “There was a time when labour costs were the only thing that mattered,” he says. “Now things are different. Now is perhaps the time for the IPAs to start cooperating with research and development centres and universities to showcase know-how. This is very important in the region, this is what the region wants.”
Cooperating across the emerging Europe region could also help those IPAs whose performance needs to improve. Haldun Firat Kokturk, global head of Limak Airports, suggests that more support could be offered to IPAs with limited experience, “especially in the Balkans, and most of all in Kosovo.”
Interestingly, a large number of emerging European cities have begun to take
the initiative and do things for themselves in recent years, often in spite of the wishes of central governments. The reason is simple: these cities and the regions in which they are found no longer want to be held back by long, cumbersome decision-making processes which stifle initiative, innovation and hinder foreign direct investment.
Alongside the Investment Promotion Report 2019, Emerging Europe surveyed a panel of 25 global location advisers and foreign direct investment experts who weighed up the various merits of the 75 cities of emerging Europe which are either capitals or have a population of more than 200,000 inhabitants. Sofia was among the top 10 cities in the brand subcategory, and together with Ljubljana in the top best cities with an excellent business climate. Zagreb, Tirana and Prishtina offered a great pool of talent. Ljubljana, together with Prague, has the best quality of life across emerging Europe. Local authorities in both Ljubljana and Skopje offer the best support in SEE.
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