Investment promotion in the aftermath of COVID-19
COVID-19 has caused global upheaval with all most business suspended until further notice. But what will the investment promotion landscape look like post-coronavirus? We reached out to Sirpa Tsimal, Director of Investment Promotion at Switzerland Global Enterprise and a creative thinker in FDI promotion, to understand what kind of response might be needed after COVID-19.
First of all, just to introduce you to our City Nation Place community, could you explain how your career has led you into foreign direct investment?
As so many in this field I stumbled upon it. My background is in communication sciences. But I started my career in New York City in 2005 at a boutique venture advisory firm. The firm had a mandate by a Swiss IPA and I was the key account manager, and that is how I started in the field. I have been working in FDI ever since in various capacities: In-house at regional EDOs, with my own consulting firm, and now with Switzerland Global Enterprise, the official Swiss investment promotion association.
What are your main responsibilities at Switzerland Global Enterprise?
At Switzerland Global Enterprise I am responsible for our new technology strategy. We work closely with the cantonal (State) economic development agencies and focus our promotion work on five emerging tech themes where Switzerland has proven to be a strong location. This is very exciting and challenging at the same time. Let’s take for example artificial intelligence or blockchain, two new technologies that alter the way we work and create entirely new business models. As an IPA we need to be able to foresee how these technological changes will impact how companies are selecting their corporate locations.
Your passion is for innovation and the development of more creative processes - at this particularly challenging time, do you think creative thinking might make the difference for effective crisis management and recovery planning?
Absolutely right, in a global crisis like the one we are currently in with the Covid-19 pandemic the economy suffers everywhere. In this pandemic, industries like travel, tourism and local small businesses are particularly hard hit but other industries like eCommerce and online communication tools like Zoom, the video conferencing platform, are thriving. Each crisis is also an opportunity for innovation. And now it is more important than ever as an EDO or IPA to be fast-thinking and creative in responding with measures that benefit the (corporate) community and the local economy.
But at the same time, I believe that creativity and innovation is like a muscle that needs to be trained constantly, much like your abs to keep a strong core. A crisis like the current pandemic might accelerate certain trends (i.e. remote work), but for IPAs to be competitive in the future and in the long-term, they need to create an environment where their teams can learn to be creative and train their innovation muscles.
Why do you think Investment Promotion Agency [IPA] teams are often less creative?
I wouldn’t say they are less creative than let’s say a corporate team, rather they operate in a very complex environment: they operate between the public and private sector and with many different stakeholders and political interests. To be agile and creative in such a complex environment is not an easy task.
Why do you think it’s essential that FDI promotion teams start to think more creatively – particularly at this time?
Predictions by UNCTAD are that FDI will slow down by 5-15% globally because of the pandemic. I think these estimates are conservative. A slowdown in global FDI means competition between locations is heating up.
But even before the coronavirus pandemic, the world of work has been changing drastically and rapidly: there has been a shift from globalisation towards trade barriers and protectionism by some of the major economies, we have seen the rise of the gig economy and of digital nomads, urbanisation is happening everywhere, cities have to be more resilient, and emerging tech like AI, robotics, smart manufacturing and autonomous driving is making the war for tech talent even fiercer. Tech talent stays an average of only 18 months at one company according to an HR person I recently heard at the Slush conference talking about talent development in Silicon Valley. All these developments influence how companies operate and how they choose their locations. Hence, this has an impact on how IPAs and place branders promote their locations. Organisations that address these changes in their promotion activities and provide creative solutions to companies will win the projects.
You are a great exponent of “Design Thinking” and its application to FDI promotion. Can you explain what you mean by Design Thinking?
Sure. Design Thinking is a human-centered and iterative process to innovate collaboratively. Originally from the design industry it is now applied across industries and corporates. I see Design Thinking as a mind-set. I became a great exponent of Design Thinking a few years back, when I was running my own FDI consultancy. I realised that there aren’t many innovative educational options for FDI professionals out there. Some of the large consultancies and associations offer certificates but with a very traditional frontal learning method. I wondered why there aren’t more options. And then one day I had coffee with a colleague who was a learning strategist and had a background in Design Thinking and I thought that is exactly what I was looking for and what IPAs need. So I initiated The Location Lab, which is a learning community and kind of a think tank for like-minded people in the field. We developed a workshop program specifically for FDI challenges. And I educated myself in Design Thinking and other innovation techniques. There are many great innovation frameworks out there. I also like for example the Community Canvas as a framework for economic development and place branding.
What are some of the specific challenges or opportunities being created by COVID-19 that you believe will require more creative and innovative thinking from IPAs?
I think there will be two fundamental shifts stemming from the COVID-19 in FDI. One is that companies will re-evaluate their global supply chain and manufacturing set-up, and we will see a trend towards regional supply chain and localised digital or advanced manufacturing. Secondly, remote work - which has been a trend for a while now - has overnight accelerated and companies as well as talent will invent new business models and new ways to work together. And soft factors such as quality of life become more important again. Remote work could also be a chance for rural areas.
Are there specific opportunities and/or challenges that Switzerland Global Enterprise is currently focused on addressing, where you are using design thinking to come up with more creative solutions?
We are flexing our innovation muscle constantly. When I started at Switzerland Global Enterprise we did a design thinking workshop with the marketing team and we discovered some great insights about the investor journey and where we can improve our promotional work. Design thinking is human-centered, and when you approach it from an investor perspective (i.e. what are the needs of a CEO during the site selection process instead of what do I want to promote to the CEO) you get clarity about your best promotional approach.
Switzerland is a small country which ranks high in innovation and is a great place for tech talent. We focus our promotional work on this aspect to attract foreign companies. Of course we also have challenges like any other location, the high costs are one example in Switzerland.
Given that IPAs are usually very ROI focused, is there a way to measure the impact of challenging teams to think more creatively in this way?
One aspect of FDI where I do think that our industry lags is being more creative about how the impact of an IPA is being measured. Current standard at many IPAs is to count how many jobs have been created by a new company settlement. But if more and more corporate teams work remotely and services are delivered digitally, we need to adjust how we measure ROI and take a more holistic approach how EDOs work and how we measure their impact for a community and the local economy.
If you had one piece of advice to give to a colleague working in an IPA who wanted to shake up their approach and encourage the team to think more creatively, what would it be?
I believe we are all creative; we just need the right space (mentally and physically). If you are leading a team at an IPA you need to give your team that space. Create a safe space where your team can create and also fail. Educate yourself on the different frameworks and remember that innovation doesn’t happen overnight but needs practice. Most of all, have fun.
If you look at approaches to investment promotion marketing around the world, are there any cities or countries you particularly admire?
I am a bit biased as I have Finnish roots. I think the Scandinavian countries are doing an excellent job and are very innovative. Or the city of Gainesville in Florida is a great example too. The city government worked with the design firm IDEO and uses a design thinking approach across the city agencies. I also think some of the regional cross-border initiatives are very innovative in economic development. There are many examples and I hope many more will use creative problem solving like design thinking and share best practices among peers. I am looking forward to the upcoming City Nation Place conference to learn about new creative initiatives.
Related reading:
7 top tips for destination marketing and investment promotion during the COVID-19 pandemic
Has the pandemic killed soft power?
The politics of space, culture, and placemaking on post-COVID place branding
The roadmap for sustainable recovery
