Market intelligence to inform Local FDI Strategy

The analysis gives a sub-regional approach to the identification of those local sectors / clusters which are most likely to attract Foreign Direct Investment (FDI). It also shows, for each of the likely sectors, the countries to target to attract FDI in the sector.

The approach enables a more strategic sub-regional approach to the attraction of FDI to be undertaken. It shows a strategic sector-focused target marketing approach, informed by forensic market intelligence, which maximises the use of public funds.

The approach employs a range of selection criteria:

  • Higher value added sectors

  • Evidence of market failure in the sector in attracting inward investment

  • Current local sector strengths and/or recent successes and/or current market gaps and opportunities

  • Growth FDI sectors

The following analysis illustrates the approach, as applied to the Cornwall economy in this instance.

Establishing the current level of Sub-regional FDI

In order to explore the potential for raising FDI it is generally a good idea to establish the current level with the Sub-region.

Data for 2007 from the Office for National Statistics shows that Cornwall has exactly 2% of its companies in foreign ownership (FOCs), and 9% of its employees. Regionally, 3% of companies and 16% of employees are in foreign ownership. Nationally, the respective percentages are 4% and 18%. It can be concluded that Foreign Direct Investment (FDI) in Cornwall, to date, has been severely limited compared both regionally and nationally.

This finding alone suggests that there exists enormous potential for greater levels of Foreign Direct Investment in Cornwall.

Sectors in Cornwall where FDI is of greatest significance (in that they account for higher percentages of the total business stock and/or employees than the respective averages across all sectors) include Transport, Non-metallic product manufactures, and Wholesale.

Identifying High Vale Added Potential FDI Sectors

Having established an analytical framework for the identification of High Value Added sectors with above average FDI 'attraction potential' for a Sub-region, we go on to develop a 'Sector Priority Matrix' for the successful sub-regional attraction of high value added FDI (Cornwall in this instance). The analysis assesses each sector according to its 'score' on 7 criteria:

  • GVA per employee in the sector

  • The likelihood of Market Failure in the sector in terms of Cornwall attracting FDI

  • If the sector is currently a regional Employment Strength in terms of Foreign Ownership

  • If a sector is currently a regional Foreign Owned Company (FOC) Employment Growth Sector

  • If the sector is a Regional Opportunity Sector in that regional representation is low compared nationally

  • If a sector is a FOC Employment Growth Sector nationally

  • If the sector is in part or entirety a local 'Priority Sector' (as defined in the Local Economic Strategy)

On the basis of this initial analysis, the Cornwall FDI programme would specifically target the following sectors:

  • Publishing, printing and media repro

  • Telecommunications

  • Medical, precision and optical instruments

  • Computer and related

  • Machinery and equipment

  • Radio, tv and comms equip

  • Transport equipment

  • Construction

  • Research and development

  • Education

  • Non-metallic mineral products

  • Electrical machinery and apparatus

  • Motor vehicles, trailers and semi-trailers

  • Hotels and restaurants

  • Other business activities (incl. legal, accountancy, advertising, marketing, architectural, mgmt consultancy)

  • Sewage, refuse, sanitation and similar

  • Recreational, cultural and sporting activities

Identifying the countries to target for High Value Added FDI

Analysis of historical FDI trends data from the Office for National Statistics can then be used to identify the specific individual countries for targeting with respect to FDI.

If you would like to discuss a market intelligence to inform Local FDI Strategy project with us, please contact us on 0845 601 8880 or send us an email through our Contact page.

A list of our recent projects is available on our Sectors page.