Investment Attraction Strategy
The purpose of an investment attraction strategy is to develop a strategic plan for attracting business investment, based on a clear set of objectives that can be achieved by implementing carefully thought out tactics.
An investment attraction strategy should be developed in consultation with community stakeholders. It should also be reviewed and updated on an annual basis to ensure it remains relevant. Where appropriate, communities within close proximity to each other may want to collaborate to develop and implement a regional investment attraction strategy.
Typically a component of your community’s broader economic development strategy, your investment attraction strategy can be prepared using parts of the broader strategy, such as the assessment of community assets.
8 Steps to Creating an Investment Attraction Strategy
Use this step-by-step guide to help plan your community’s investment attraction strategy.
Start by examining the types of industries and businesses that have been successful in your community. This will help you identify what geographic and competitive advantages the businesses in your area currently have.
You can also analyze the supply chain associated with these successful sectors to identify industries and businesses that are complementary. This would include businesses that provide inputs or services for, or utilize the outputs of, existing companies.
Interview local business representatives to understand location advantages and disadvantages, as well as competitive advantages of the community.
Analyze the retail services in your community, relative to your community’s needs. There may be critical retail services currently missing from the community that the local population base could support.
You may want to engage a professional to undertake a retail gap analysis, as there are key population thresholds that need to be met for certain types of retail businesses to succeed.
You can also do a local consumer survey to determine what kinds of new services would be valuable to the local population.
This component of the investment attraction strategy builds on the first two steps. It enables you to narrow the scope of your investment attraction efforts by targeting industries and businesses that are a good fit with your community and likely to be successful.
It is important to consider how new industries and businesses will complement other community economic development and marketing initiatives, such as branding.
For example, if a community is promoting itself as being an “outdoor adventure capital,” then focusing on attracting industries that make outdoor equipment (clothing, kayaks, etc.) would be a good fit.
4. Develop a shortlist of investment attraction opportunities
To help your community define the types of businesses and investments you want to target, network with economic development colleagues to determine what types of businesses have been attracted to similar communities in B.C.
You can also survey existing local businesses to identify if they are:
Seeking business partners or investors. Businesses may be looking to expand or diversify their operations, or they may want to see similar businesses come to the area in order to strengthen the local labour pool and related support services.
Looking for other complementary businesses to provide inputs or outputs that would support, help expand, or diversify their operations. Encouraging complementary businesses in the same sector will support the creation of clusters, which can result in some economies of scale for the businesses in that sector.
Selling or planning to sell all or part of their business due to retirement or other circumstances.
5. Identify existing and future investment‐ready sites
It is important to maintain an up‐to‐date inventory of zoned and serviced commercial and industrial lands and buildings within your community.
This inventory of sites and buildings can identify potential locations for new businesses and investments. It is difficult to attract investment if there are no clearly defined investment locations within your community.
Define your community's investment attraction objectives:
What are your target sectors?
How many new businesses are you seeking to attract? How big are they?
How much investment do you want to attract?
What is your community's timeline?
Timelines and targets should be realistic for the community’s size and the strength of the local economy.
For example, a reasonable target for a smaller community might be to attract three new businesses per year (starting in Year 2) that employ more than 10 people.
7. Determine investment attraction strategies and tactics
Investment attraction strategies and tactics should highlight the competitive advantages your community offers for the type of business you are trying to attract.
Here are some tips for attracting investors:
Investors are focused on their ability to serve their markets in a profitable manner. A good location, raw materials and an attractive community are not sufficient – you need to demonstrate that the investor can serve their customers effectively and profitably from your location.
Attracting an entrepreneur or prospective business to your community is typically easier than attracting a new major enterprise. Ensure your strategies and tactics reflect the most realistic goals for your community.
8. Implement, monitor, evaluate and adjust
Once you complete your investment attraction strategy, you can start implementing it. Monitor and evaluate your progress against your objectives on an annual basis.
You may have to occasionally adjust your investment attraction strategy to respond to changes within your community. It is important to remember that investment does not happen overnight and in some cases can take years.