inward

interaction services comPetition communication culture brand Place businesses targets work wales PeoPle one

investment marketing

caPital exPerience

resources Performance

discussions

selling wales:

the role of agencies in attracting inward investment

cardiff cardiff
PeoPle

government

cardiff business school

aPProach activities skill shared oPPortunities Policy involved

welsh

cardiff business PartnershiP

coordination

different

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selling Wales: the role of agencies in attracting inward investment

executive summary
This study set out to explore how the agencies which promote inward investment operate in Wales, with a particular focus on Cardiff. The research involved face-to-face, semi-structured interviews, focusing on the workings of the agencies. This information was supplemented with questionnaires sent to firms and to politicians who were unable to take part in face-to-face interviews. The research highlighted a number of problems in terms of structure and organisation across the agencies within the Cardiff city region. It appears that there is some consensus on what is wrong and what needs to change but that there has been little clear action to date. The number of agencies involved in attracting inward investment in the region creates a complex picture. One agencys work naturally overlaps with another. This report shows, however, that there is a lack of coordination in the promotion of services. Although some of the agencies have wider remits than others, and some do work closely together, there needs to be more structured coordination to better use resources.

key findings
1. working between agencies: there is a lack of coordination between different agencies. Competition between some agencies creates unhealthy effects. 2. the brand: the perception amongst staff of differing messages within the same geographical area has resulted in confusion over who does what and where remits of certain agencies cease and others begin. There is also the danger of sending confusing or conflicting messages to potential investors. 3. limited resources: in some agencies, limited budgets prevent large scale strategic marketing and result in shorter, one-off campaigns. This targeting, particularly in terms of sectors, has some advantages but results in uncertainty in what to do with potential investments from outside key sectors. 4. imPetus for change: there is evidence of some coordination between public and private partners in promoting Wales as a destination for inward investment but there is acknowledgment that some aspects of the process need to change and that improvements can be made.

Recommendations
benefit from a stronger and more coherent brand image which is supported by all agencies and allows a greater coordination of the use of resources.

development of a stRongeR Welsh BRand: both Cardiff and Wales would

impRoved cooRdination: there needs to be a clearer remit for individual agencies but also an improved structure whereby joint projects can be executed and contacts shared. consistency in policy Beyond taRget sectoRs: the Welsh Government needs to

develop a consistent policy, supported by all agencies, regarding attraction of investment from outside key sectors. This is about improving responsiveness to enquiries made by firms which do not fit into sector teams.

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contents
introduction background: fdi attraction in wales the research findings interaCtion Between agenCies ComPetition Between agenCies marketing of wales/Cardiff misCommuniCation the Case of sCotland r&d aggregate numBer for fdi inflows conclusions recommendations references annex 4 4 6 8 8 9 10 11 12 12 12 14 15 16 17

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selling Wales: the role of agencies in attracting inward investment

introduction to the research

This report assesses the agencies (and attendant infrastructure) charged with attracting inward investment in the Cardiff City Region. Since the amalgamation of the Welsh Development Agency (WDA) with the Welsh Assembly Government (now the Welsh Government) in 2006 there has been a fluid support structure. This report aims to understand the role of different inward investment agencies, how they work and how they interact. The study was carried out by conducting in-depth, semi-structured interviews with those working in agencies, the Welsh Government and companies. Questionnaire and secondary data were also evaluated. This report presents a picture of the structures based on the experience of those doing the job rather than the formal organisational structure. While the goal of this work is not to present a trend analysis of global Foreign Direct Investment flows, some background data on the region are included to give a representation of its current inward investment performance. The work was carried out by Cardiff Business School on behalf of the Cardiff Business Partnership during May 2011 to October 2011. All interviews were confidential to ensure that respondents felt comfortable giving their honest opinions on the current structures and practices.

BaCkground: inward investment attraCtion in wales

Attracting inward investment is one objective of an economic development authority. New firms entering a region create economic churn; this rejuvenates ideas and brings much needed capital to local firms. How this task is undertaken by governments, agencies, and/or individuals is not a precise science and the academic or policy literature reports little consensus on the correct approach. From an inward investment promotion perspective, Wales has undergone a marked change in the last decade. In 2006 the Welsh Development Agency (WDA) merged with the Welsh Government: this merger led to the retirement of the WDA brand and the introduction of a Welsh Assembly Government (now Welsh Government) brand for inward investment, International Business Wales (IBW). Since this date a number of agencies, which had been operating during the time of the WDA, have taken a greater role in attracting inward investment, particularly from the rest of the UK and Europe. It must be noted that other agencies were involved in inward investment attraction during the time of the WDA, but were very much in supporting roles. The Welsh economy, in the 1990s and early 2000s, was seen as a major player in the European regional development arena, attracting 15% of all foreign investment coming into the UK during the early 1990s1. The high profile Oxford Intelligence report is compiled each year on a given sectors investment strategies. In 2011, a study of biotechnology, pharmaceutical and medical technology companies worldwide examined the role of economic development agencies in assisting investment. The studys credibility is not in doubt with indepth company interviews carried out at Chief Executive Officer, Chief Financial Officer and Senior Vice President level, providing the vital corporate view. A key finding was that even in 2011, the WDA was still the second most recognised development agency brand in Europe, a quite startling finding given its non-existence since 2006. It is therefore important to evaluate how well Wales has done in attracting inward investment since the closure of the WDA.

http://www.publications.parliament.uk/pa/cm201011/cmselect/cmwelaf/writev/inwardin/iiw15.htm

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wales and the uk in the inward investment game

Welsh and global inward investment flows have seen a steep downturn over the last decade. What has been disappointing for Wales is that there appears to have been a continuous fall in levels since 2003. There is a further concern for Wales; this is the improving performance of other regions in the UK, particularly Scotland, whose activity during the late 90s was far below Wales' but has now improved to lead the UK (outside London). If the figures are considered in terms of overall inward investment projects won, Scotland has become the number one ranked region in the UK (excluding London). At the same time Wales has gone from number two in the UK in 2003 to second from bottom in 2010. Table 1 shows Welsh performance compared to all regions. Some background needs to be given when contrasting the performance of Wales with other regions. Figures published by the Welsh Assembly Government (WAG 2010) suggest that the number of "foreign owned enterprises active in Wales" is smaller than that in any English region. There were around 1000 in 2007, rising to 1100 in 2009 and falling back to 1000 in 2010. They employed around 139,000 people in 2010, 11,000 fewer than in the peak year, 2009.

table 1: Percentage of uk inward investment Projects** won (excluding london)

*Source: uKTi and Fdi MarKeTS FroM The Financial TiMeS** ThiS iS new inveSTMenTS.

scotland 2003-04 av % 8.5 2005-10 av % 9

rank 1 rank 1 -

north west 2003-04 av % 6.5 2005-10 av % 6.8 northern ireland 2003-04 av % 4 rank 5 2005-10 av % 4.3 rank 4 i

rank 3 rank 2 i

north east 2003-04 av % 3.5 2005-10 av % 3.7

rank 6 rank 5 i

yorkshire & humber 2003-04 av % 2 rank 9 2005-10 av % 3.7 rank 6 i

west midlands 2003-04 av % 4.5 2005-10 av % 5

east midlands 2003-04 av % 3.5 2005-10 av % 3.5

rank 4 rank 3 i

rank 8 rank 8 -

wales 2003-04 2005-10

av % 7.5 av % 3.5

rank 2 rank 9 g

south west 2003-04 av % 3 2005-10 av % 3.3

east anglia 2003-04 av % 2.5 2005-10 av % 3.7

rank 6 rank 10 g

rank 8 rank 7 i

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selling Wales: the role of agencies in attracting inward investment

the research
The aim of the analysis was to interview key personnel from all the agencies involved in inward investment attraction to the Cardiff city region. It became clear that there is a delineation of control and activity. Therefore the interviews needed to be undertaken across agencies at different spatial levels in order to establish why certain tasks were taking place. Table 2 gives a profile summary of the respondents involved and Figure 1 shows the relationship between the agencies operating within the Cardiff city region.

table 2: Profile of resPondents

*SoMe oF TheSe reSpondenTS are no longer worKing in The agencieS, buT were in ThoSe roleS during The period (2004-2011).

firm
key Point misinformation

Practitioner*
key Point lack of communication method interview

method interview / Questionnaire

6 15 5 12
government / council
key Point consistency in communication method interview / Questionnaire

Policy imPlementation*
key Point lack of resource method interview

Figure 1: agency STrucTure

* agencieS have been coded a-g For The purpoSeS oF conFidenTialiTy ** arrowS repreSenT coMMunicaTion FlowS idenTiFied by reSpondenTS.

welsh government

cardiff council

ibw

dePartment of economy and transPort

cardiff and co

caPital wales

ukti

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attraCting inward investment

Since the 1960s and the true advent of globalised multinationals, there has been critical debate amongst scholars and practitioners alike on how best to attract inward investment. During the early 90s, Europe saw vast numbers of firms moving into nations to take advantage of the growing wealth of the trading bloc. The impact of inward investment on local economies has been studied in some depth with the notable works of Hill and Munday (1992), Blomstrom et al (2000) and Driffield (1999) identifying the impact of firm spillovers on local development. With these advantages of inward investment accepted by politicians, many governments concerned themselves with developing inward investment friendly policies. During the early 90s, firms location decisions appeared to be driven purely by economic factors, with winning regions offering the lowest possible cost base through both tax incentives and grant schemes (Bellak and Leibrecht, 2005). During the early 90s Wales was seen as a highly successful region in attracting inward investment - its low cost base and English speaking work force were seen as critical factors in its success (Cooke and Morgan, 1998). As relative operating costs began to rise the firms once flocking to the country began to leave. They were drawn first to Eastern Europe. Over the last decade, the growth of China and India as power houses of low cost business has meant developed regions in Europe have had to compete even harder to attract firms. Today, policies to attract inward investment into developed nations vary by locality yet there are some common practices identified by Guimon (2009) with a strong focus on highly skilled work forces and local amenities. As a result, it has been accepted that marketing of place plays an important role in attracting investment in developed nations, over and above tax incentives.

ComPetition amongst agenCies

With large numbers of regions and countries all competing for inward investment, intense competition has arisen between agencies. With so much to gain, pressure has been put on governments (and economies) to be as competitive as possible. This pressure is a double edged sword as although it can lead to efficiency and productivity improvements, too much pressure can generate a so called race to the bottom. Here nations trying to reduce wage bills and offering more competitive (expensive) packages of support can effectively produce poor welfare outcomes. Charlton (2003) provides a useful framework to understand this competition for inward investment.

Figure 3: charlTon'S FraMeworK

investment Poaching domestiC welfare gain? international welfare loss? beggar thy neighbour domestiC welfare loss? international welfare loss?

healthy comPetition domestiC welfare gain? international welfare gain? winners curse domestiC welfare loss? international welfare gain?

The matrix describes the associated consequences of different types of inward investment strategy. For example, if a region attempts to take an investment from where it is naturally more efficient, the overall economy will suffer while a smaller area may benefit (top left corner). Although the original matrix allows comparisons between regions it is also possible to use it to analyse investments within the same region. If one agency attempts to offer incentives over and above another agency, the result is a loss of overall welfare of the region (bottom left corner). This competitive analysis of inward investment suggests that while some competition is healthy, too much can create substantial welfare losses.

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selling Wales: the role of agencies in attracting inward investment

findings
from the researCh it was PossiBle to identify five Core areas of ConCern exPressed By the resPondents. these are: interaCtion Between agenCies PerCePtion of ComPetition: Cardiff vs wales marketing of wales/ Cardiff misCommuniCation ComParison with the Case of sCotland
When there are numerous agencies involved in similar work and they are operating within the same area there will inevitably be overlap. However, given constrained resources and continuing competition from other regions and nations, a degree of interaction would be expected to help improve the services offered. The research found that some agencies do work closely with one another through face-to-face contact or quarterly update meetings. Others appear to operate more independently which has created a degree of perceived competition between some agencies. There is the perception that competition has created a two tier system as described by a respondent, whereby larger funded bodies can pick up firms originally contacted by smaller agencies. This interaction, or lack of interaction, has led to distrust between agencies and has resulted in further disassociation of activities. Contact lists are maintained by all agencies and respondents indicated that there is a great deal of protection of these lists, as they are hard got. Due to the limited resources that exist (with agencies having their budgets cut), some have sought to work with others but there appears little impetus for this to take place. This was not an isolated opinion: agencies are protective of their image and felt that linking to another without a clear rationale would be pointless. Those agencies which are seeking to work with others acknowledge their own weakness. They accept that their brand is not as strong as others and that without a greater degree of interaction there will be little they can achieve in the long run. This attitude was shared by all respondents from smaller agencies and there is an acceptance that change is needed. Given this, the question was posed: do these small agencies still have a part to play in investment attraction? The consistent response back was that they have experience and knowledge which is difficult to replace but have inadequate resources to make a greater impact.

interaCtion Between agenCies

one resPondent said:

In the past three years we have attracted in firms, we have corresponded with numerous firms and have built up strong relationships which have resulted in investments into the country. However we struggle to get our name out there, and we rely on contacts passed from agency C and agency A, our brand if you will is not out there.

We have worked hard on marketing and have established a successful product with limited resources, when other agencies ask to work together we have to ask, what are we gaining from this? Often it appears that [they] simply want to link themselves to what we have created without indicating what we can gain from this.

One of the other major issues with interaction was the silos that exist between different agencies. Both government policy and structure have created a great deal of confusion among agencies over boundaries and responsibility. The size of inward investment is one of the biggest distinguishing factors for some agencies. One agency had a remit to only look after investment up to a certain size and above this they had to pass contacts on to another organization.

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PerCePtion of ComPetition Between agenCies: Cardiff vs wales

Poor interaction has bred competition between agencies. Competition can be seen as positive in some cases but not to the detriment of the overall goal. It is difficult to gauge the level of competion. A number of respondents indicated that there were significant issues when it came to cultivating contacts received. There is a view that once initial relationships are formed the "hand holding" job ends and some agencies are expected to withdraw, yet there is a significant belief that this approach does not yield the best results: When this was put to agency C there was an acknowledgment of the mistake and an acceptance of the fact that the current system needed adjusting and currently creates more complexity for the firm.

In some cases we are encouraged to pass over the files of contacts to agency B, this is done as they are seen as the stronger and have more resources and experience. The problem is that firms do not want that, they just want one port of call for all dealings, switching between agencies does nothing except confuse those involved.
This viewpoint was also expressed by other agencies and reflects a more complex underlying structure. For example, firm 1, which was looking to invest in Wales, was working with one agency but got passed to another and was given inaccurate information conflicting with what the first agency had told them:

We need to make ourselves visible and I mean visible in every sense of the word, we need to be so easy to contact and communicate [with] on a daily basis that firms can reach us all the time. The present system has created too many silos, this means from the outside it looks like we dont speak to each other and that we are not on the same page, the problem is not that, the problem is that we were told to operate in this manner.
This view shows the internal complexity and the politics involved in operational decisions. It appears that there are numerous scenarios where this has happened and each time it reflects an ingrained notion about how an agency should operate rather than what is best for the client (the firms) or Wales. It must also be noted that not all those involved are so rigid with their operations and some are more open to developing better coordination of services to improve overall performance:

We were looking to develop a small project in Wales. We had been having productive consultation with agency C but were then transferred to agency B. the dealings we had were difficult, we ended up having to almost start from scratch, explaining what we were looking to do .. in the end this was taking up too much time, we could not afford to hang around, we instead chose to go to Newcastle.
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We are more than happy to work with others. Over the course of the last year there has been a process of evaluation of services and we accept that things could be done better. In an ideal world those who are good at doing something should concentrate on that, that way we build experience and knowledge.

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selling Wales: the role of agencies in attracting inward investment

marketing of wales/Cardiff
There was a consensus that inward investment activity is marketing activity. This includes the marketing of general locations, marketing of individual cities, and of Wales. To attract a business to any location, it is essential to portray the best aspects of what the place has to offer and importantly that it be seen as a good place to live. Divisions lie between respondents in how to communicate this image. This study has focused on the Cardiff city region, but two of the agencies involved in the research (A and B) are both national operators. There is a very clear message from agency B that Wales has not been marketed well over the last two years. There is an admission that Wales has been seen as being closed for business and an acknowledgment that other regions of the UK, notably Scotland, have taken advantage of this.

There was one example around the time of the Ryder Cup, we had put a sizeable advertisement into a North American trade publication. When we got a copy of the publication (after the competition) another advert appeared on the page opposite from a local authority in another part of Wales. I am all for competition but there must be a line, whereby when advertising globally we are all seen to be pulling together not pulling apart.
There was again a consensus among all agencies that Wales (during the late 90s and early 2000s) had established a bold image internationally, but that in recent years this brand had become less prominent and had lost value. This concept of brand was raised by a number of the respondents, who have since left their posts but who questioned what had happened to the old WDA brand:

Our marketing has been in a process of transition over the last number of months. There has been some scale back from initial planned action and that has resulted in an about face turn. Dont get me wrong, it is not that we have not been trying to attract inward investment but there has been a lot of effort on attracting certain types of investment.
This view of selective attraction is shared by a number of the agencies but many found that this approach was causing a great number of problems in terms of marketing. All agreed that focus was important when dealing with limited resources but some suggested that too narrow a focus meant that marketing was ineffective. Another area of concern is that respondents in different agencies said that previously there had been overlaps in advertisements, with different agencies promoting different aspects of Wales/ Cardiff in the same publication.

I think that the WDA had a lot of things wrong with it at the end, in particular the structure, it was too bloated, just too big. However the brand was still worth a lot, I have been all around the world and I still hear companies talking about the WDA. In fact I would suggest the brand is still worth a lot, so lets use it.
This one respondents view was shared in some shape or form by a number of respondents: however few wished to go into detail about the WDA. It seemed to be a contentious subject for any of those involved in inward investment work. Although criticism was levelled at the WDA many respondents felt that the marketing of Wales has been less effective since its merger into the now Welsh Government.

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misCommuniCation
Communication was a topic of much concern for respondents and was touched on in almost all discussions, even those related to other subjects such as interaction or marketing. It must be said that communication issues were found both between agencies and within the external community the agencies work with, that is prospective investors in Wales. When looking first at formal communications between agencies there is a clear divide between the larger and smaller agencies. Many respondents said that there is one directional communication, reflecting the protective nature of some. For example, the strategy of agency E contains details of on-going discussions and collaborative activities. When questioned about this the agency concerned said that presently this was only one direction interaction. The experiences of companies were very different depending on agencies, the sector they were coming from, and the investment size. Overall there was a great deal of variability in the communications that took place. Some firms described the great service they had and the direct line to the people that can make decisions. This positive response was from an SME who was coming to Wales. They were also operating in one of the Welsh Government's target sectors:

Going forward we need to plan better, there is a need for a more joined up approach to link together services and to let each other know what the other is doing. There is no point in not sharing information, all we are doing is wasting our time fishing in the same pond. To this point we have struggled to get meaningful communication between ourselves and agency D.
In terms of indirect communication, that is general communication between all those involved, there was little similarity between agencies. Some had regular updates on the other agencies work, while others were far more independent and had few if any dealings with the others. i dont like to use the word miscommunication but it seems the most appropriate. Since 2005 with everything that happened around that time, inward investment was beginning to get harder to attract, more agencies were learning the tricks of the trade. i spoke with people in the Swd (South west development agency) who had been looking at wales for a number of years and thinking they could not compete with us, suddenly they started advertising more. why has this happened? Miscommunication or lack of communication, we stopped telling the world how good we are, more importantly we stopped working together. This view has been expressed by other respondents who acknowledge a lack of communication taking place and its effect on external communications. Communication comes up again in other contexts, primarily in terms of miscommunication of both policy and offering. Authors contacted a number of companies which have either invested in the Cardiff city region or which were considering investing.

Everything went well, we had good contact right from the start, [and] there was a single port of call who dealt with the process. We were offered a great deal of support in terms of the operational side of moving to [the location]. We were only looking at the Welsh site during the process as two of our key contacts are already located in the area. Having only visited Wales once or twice I thought it was very useful to get local insight, only problem was the length of time it took to get through the processes but other than that I cant complain.
This experience was not shared by a firm operating outside the target sectors but of a similar size and larger investment than that of the first:

To be honest it was confusing, we dealt with agency B to begin with, it was difficult to get some answers to what we thought were simple questions. We spoke at length to the contact we were given and after a number of emails and phone conversations we were passed to agency A. The most annoying thing was that one did not tell the other our full situation; we were given different information by one group over the other. We also seemed to get tangled up in some internal issues, we kept getting redirected and brought around the houses. We are not a large firm, we dont have lots of staff dealing with this, it was me, [and] I got frustrated with the lack of progress so thought we should move on.
This view highlights the significant internal confusion that exists around the notion of sectors. The miscommunication and misinformation regarding the policy is rife. One respondent made the comment:

If you are in computer game design what sector are you in, creative industries or ICT?
Others too expressed the view that there was some lack of communication on how to prioritise inward investment.

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selling Wales: the role of agencies in attracting inward investment

the case of scotland

A number of individuals contrasted the poor performance in Wales with the relative success that Scotland has had in the recent past. It is useful to look at the Scottish case to put these comments into context. Existing data on Scottish inward investment attraction have been examined to show trends over the course of the last eight years. Respondents comments on the work of SDI (Scottish Development International) have also been analysed.

number of r&d inward investment Projects

*auThorS' conSTrucTion, daTa acceSSed FroM oFFice oF naTional STaTiSTicS (onS)

20

16 14

15

12 9 10 7 3 1 2 4 2 5 1 2 5 8 6 3 9

10

inward investment, wales v sCotland

There are two sets of data to contrast. First is the type of inward investment actually being attracted. To this end this research contrasts the figures on R&D investment. This is high value activity associated with the greatest economic spillover to the wider economy. The second measure is the aggregate numbers in terms of actual projects that have chosen to invest.
key wales scotland

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

% of inward investment Projects against uk total

*auThorS' conSTrucTion, daTa acceSSed FroM oFFice oF naTional STaTiSTicS (onS)

11
12 10

10 9 7 9 9

10 8 8

8 6

6 5 7 9

6 5 3 2 2 3

4 2 0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

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If we look at the two nations there are similar trends across the period. Although there were significant declines between 2004 and 2005, the Scottish bounce back has been much greater than Wales' and the flows have held up well during the period 2007-2009. There has been a positive trend in Scotland in terms of both numbers and value, in particular in the most sought-after sector, global financial services2. A number of respondents from different agencies argued that the Scottish model was successful at the expense of the Welsh:

Over the last three years we have seen the SDI [Scottish Development International] ramp up their overseas work, they have a very clear goal of where they want to be and how they want to get there, and it seems to me that this pressure has possibly caused a squeeze on some of the targets we originally had. IBW could not compete with them, it is too slow, everything has to be double checked and put through too many peoples desks.

Another respondent expressed a similar view.

Why is Wales in general not attracting as much FDI? Short answer, Scotland, long answer organisation. Scotland is streamlined, they are very efficient. I know guys working there, they are very savvy and more importantly than that they know people in UKTI [United Kingdom Trade and Invest].. they have an office we dont.

Scotland has also been accused by some respondents of copying a similar approach in terms of branding to that used by the WDA during the mid 90s. SDI has reportedly advertised heavily in overseas markets where Wales was once strong, namely the USA and the Far East. There is also a common belief that Wales in general will struggle for the foreseeable future against such a strong brand.

http://www.ukti.gov.uk/uktihome/media/news/100745.html

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selling Wales: the role of agencies in attracting inward investment

conclusions
This report has analysed the views of those who are or have been involved in attracting inward investment to Wales. It has looked across multiple agencies with different remits to try and piece together the infrastructure that exists in Wales at the present time. There is a consensus that change needs to happen; all agencies acknowledged this and would welcome it. The market for inward investment has shifted dramatically in the last 10 years. In the last five in particular, with more proactive strategies by development agencies across the UK and Europe, the need for more targeted and intensive marketing has become greater.
Wales has some key assets at its disposal and there is valuable experience and expertise in all of the agencies currently operating in the Cardiff city region but, at the moment, it appears that these agencies are greatly fragmented and disjointed. There is a lack of cohesion in operational and strategic coordination of services. Some agencies have done very impressive jobs given the limited resources available to them. An example of this is the work of agency C, which has been developing a scheme whereby successful Welsh business people are recruited to promote the area. There appears to be some difficulty with the overarching brand of Wales, with different agencies saying different things. There is a continual pressure to attract inward investment and yet there is no clear coordination of activities. The Welsh Government has undertaken a number of reviews and reorganisations over the last few years but, given the devolved agencies' activities, there needs to be a greater emphasis on joining up services. The sector approach adopted by the Welsh Government has also been adopted by the other agencies and they are actively seeking to encourage investment from particular sectors. However, given the specific nature of these sectors, one agencys work can often overlap with anothers. This duplication of campaigns does not reinforce the message as there is little coordination to make sure the correct targets are being met. There is also the problem of competition between agencies. Presently this has created a divide between some of them and a result is a lack of resource sharing and duplication of enquires. Respondents recognise that there is too much emphasis put on a limited number of sectors and so have suggested that there needs to be more done to attract inward investment in general rather than just specific targets. At a Cardiff city region level, issues around fragmentation particularly in terms of marketing might be resolved by closer joint project work or through a reconfiguration of existing resources.

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recommendations
The evidence in this report indicates that there are some significant shortcomings in the current structures in place in the Cardiff city region to attract inward investment. This reports in-depth approach has allowed those doing the job today to express their thoughts and concerns over the present infrastructure.
It is recommended that there should be greater coordination of services. One option would be that a single agency link together activities where possible, grow synergies where they exist and then put in place plans to exploit them. This could be done by an existing agency with an extended remit. One of the most significant issues identified in the report is the outside worlds perception of Wales competitive brand image. In order for any investment to come to Cardiff or Wales it needs to be seen as an attractive place to be. A more proactive marketing campaign designed to let global firms know what Wales has to offer, both in terms of skills and in terms of location, is required. To date the brands of Wales and Cardiff have been communicated too weakly, with different agencies each trying to focus on separate components. This fragments the overall message. It is recommended that a single coherent brand should be adopted. This need not mean dismantling agencies but it would encourage them all to fly the same flag. Previous approaches by Wales, notably during the late 90s, had a greater coherence and consistency in brand messages. These produced a well understood and recognised 'brand' for Wales (the WDA brand is still well recognised years after it was disbanded) and this helped attract large amounts of inward investment. It is recommended that a review of the current situation takes place and that steps are taken to address the issues identified. The final recommendation is that in any reorganisation within the Welsh Government's economic development team there should be some provision for the support of inward investment from outside the key sectors. It became clear from the report that certain sectors which do not fit into the Governments key sectors are currently being treated in a subsidiary manner. This needs to be addressed to both maintain the brand image of Wales and to encourage economic development. future research Attracting inward investment will continue to be important in the coming years and, with continued global development, more competition will exist. It is important that Cardiff and Wales have a strong brand recognisable across the world. Future research could examine the factors which are important in developing a strong brand for inward investment.

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selling Wales: the role of agencies in attracting inward investment

references
Bellak, C. and Leibrecht, A. (2005) Do low corporate income taxes attract FDI? Evidence from eight Central and Eastern European countries, University of Nottingham Research Paper 2005/43. Blomstrm, M., Kokko, A. and Globerman, S. (2000), The determinants of host country spillovers from foreign direct investment: a review and synthesis of the literature, in Pain (2000). Charlton, A. (2003) Incentive Bidding for Mobile Investment: Economic Consequences and Potential Responses, OECD Development Centre Working Paper No. 203 (Formerly Technical Paper No. 203) Cooke, P. and Morgan, K. (1998) The Associational Economy: Firms, Regions and Innovation (Oxford University Press, Oxford). Hill, S., and Munday, M., (1992) The UK Regional Distribution of Foreign Direct Investment: Analysis and Determinants, Regional Studies, 26 (6): 535-544. Pain, N. (2000). (ed.), Inward Investment, Technological Change And Growth: The Impact Of Multinational Corporations On The UK Economy, Palgrave Press. Wells, Louis T. and Wint, Jr. Alvin G. (1990) Marketing a Country - Promotion as a Tool for Attracting Foreign Investment, Foreign Investment Advisory Service occasional paper No. FIAS 1.

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annex 1 - new inward investment, uk and wales

wales uk wales uk

3,132

34,077

3,379

36,526

9.2
2005-06 new jobs 2006-07

9.3

new jobs

6
wales uk

4
wales uk

3,743

45,051

2,185

35,111

8.3
2007-08 new jobs 2008-09

6.2

new jobs

6
wales uk

7
3,431 53,358

6.4
2009-10 new jobs
inward investment new jobs 2005/06 - 2009/10
Source: uK Trade & induSTry noTe: (1) analySiS baSed on Secured projecTS, aS per uKT&i eligibiliTy criTeria

key wales uk uk ranking Percentage

4
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selling Wales: the role of agencies in attracting inward investment

table 1: foreign direct investment across the uks nations and regions (by number of Projects)
(*) includeS london Source: uKTi daTa Source: ernST & youngS european inveSTMenT MoniTor

Region SOUTH EAST (*) SCOTlAND WEST MIDlANDS NORTH NORTH WEST Wales SOUTH WEST YORKSHIRE & HUMBER EAST ANGlIA NORTHERN IRElAND EAST MIDlANDS ToTal

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 281 55 48 17 39 35 27 27 15 20 10 574 168 35 31 11 20 19 9 23 16 21 17 370 169 25 17 34 10 27 31 15 18 13 10 369 169 39 32 46 33 42 28 25 5 10 24 453 242 64 46 50 28 35 22 24 25 16 11 563 287 33 43 49 27 13 20 17 30 18 22 559 379 62 49 31 37 16 23 14 28 17 29 685 410 69 54 42 26 22 9 16 29 26 10 713 342 53 37 37 51 35 29 22 30 19 31 686 346 51 51 39 37 20 32 42 19 25 16 6783

ToTal 2,793 486 408 356 308 264 230 225 215 185 180 5,650

Waless %

6%

5%

7%

9%

6%

2%

2%

3%

5%

3%

4.7%

uKTi recorded data shows total uK investment for 2009-2010 as 1,619. eiM and uKTi have different methodologies for collecting data and annex d explaines the methodologies employed.

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table 2: inward investment new jobs over the last ten years

key

year

new jobs

wales

uk

Percentage

ranking against the uk's 12 geograPhic areas

wales

2000-01

4,520
uk

6.3% 2001-02 7

wales

3,872
uk

11.3% 1

71,488

34,087

wales

2002-03

4,083
uk

11.8% 2003-04 3

wales

4,064
uk

15.9% 1

34,396

25,463

wales

2004-05

2,593
uk

6.5% 2005-06 9

wales

3,132
uk

9.2% 6

39,592

34,077

wales

2006-07

3,379
uk

9.3% 2007-08 4

wales

3,743
uk

8.3% 6

36,526
wales

45,051
wales

2008-09

2,185
uk

6.2% 2009-10 7

3,431
uk

6.4% 4

35,111

53,358

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rePort authors
andReW cRaWley is a Research Fellow at Cardiff Business School working with Cardiff Business Partnership. He has been involved in publishing reports on sector analysis and regional economic issues within Wales. His research interests lie in industrial economics, spatial and regional economic analysis. max munday is Director of the Welsh Economy Research Unit at the Cardiff Business School and Professor of Economics. He has been involved in research projects that have examined the development of the Cardiff economy and the development of key sectors in the city area. Rick delBRidge is Associate Dean for Research and Professor of Organisational Analysis at Cardiff Business School and a Senior Fellow of the ESRC/EPSRC Advanced Institute of Management Research. His research interests include the organisation and management of innovation. He is co-author of The Exceptional Manager (Oxford University Press).

aCknowledgements
In preparing this report we are very grateful to all those who took part in interviews and who responded to questionnaires.

ContaCt details
Dr. Andrew Crawley Tel: +44(0)29 2087 5079 Email: crawleyAJ@cardiff.ac.uk Cardiff University Aberconway Building Colum Drive Cardiff CF10 3EU UK

deSign: www. blacKSheep.inFo

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