Here’s Clarity’s inward investment marketing wrap up for the end of 2023, in which we take a look at:
- A ‘hybrid working’ future: the opportunities for inward investment and place marketers
- AI, technology, and getting the inward investment marketing basics right
- Attracting inward investment in a tough economic climate
- Clarity’s Inward Investment Marketing Word of the Year, 2023
A ‘hybrid working’ future: opportunities for inward investment and place marketers
Back in September 2020, Clarity considered how the Covid-19 pandemic might change the ways we work - at that time, many leading service sector employers were planning for ongoing 'hybrid working'. This November (2023), JLL reported that employees, on average, were spending 3.1 days per week in the office - broadly in line with their ideal of 2.8 days. In general, employers favoured more office attendance (citing benefits including productivity and collaboration), while employees were happy at home (for reasons including less time and money spent commuting).1 The conclusion: hybrid working is the middle ground, and seems likely to be the way forward.
But what does this mean for inward investment and place marketers?
Less commuting means workers can live further away from the city - balancing lifestyle considerations with access to the office. But hybrid working isn’t the only factor driving this trend. In the UK, high property costs and other lifestyle factors are motivating more renters and young people to move out of London, or consider doing so - mostly to surrounding counties but also to the Midlands and the North.
For place marketers promoting locations in traditional big city hinterlands and far beyond, this creates opportunities to pitch ‘live and work here’ propositions that previously wouldn’t have been viable. And they can target metropolitan knowledge workers with both spending power and the potential to set up high-value businesses in the future. The trend could, in short, help to make previously neglected provincial locations wealthier and more knowledge economy-focused.
All of which adds up to a powerful case for putting a compelling ‘live and work’ proposition - addressing both the rational and emotional drivers of individual and family location choice - at the heart of your inward investment and place marketing offers.
AI, technology, and getting the inward investment marketing basics right
Everyone was talking about AI this year (the ‘most notable word of 2023’ according to Collins dictionary). But what does it mean for inward investment marketers?
At the end of 2023, some investment promotion agencies (IPAs) are evaluating how AI can help them to develop value propositions and attract inward investors - from the use of chatbots for online investor engagement to predictive models identifying the locations investors are likely to select, and the risk variables likely to affect their investment decisions.2
Hats off to these innovators and pioneers. But a note of caution is required whenever we’re presented with the latest technology panacea, as we’ve seen in the past with digital products like location apps and data tools.
Before inward investment marketers dive in to procure novel and potentially expensive technology solutions, we think there’s a pressing need to get the internet marketing basics right - and valuable prizes awaiting (in terms of investor engagement and attraction) for those who do. As of December 2023, investment promotion agency websites typically continue to be ‘online brochures’, with poorly optimised and segmented value proposition messages (see below), and minimal exploitation of the internet’s marketing potential - in areas including location data visualisation, investment lead generation, and marketing performance measurement and optimisation.
Human expertise and judgement remain essential (at least for now!) - to understand the location needs and priorities of carefully targeted investing businesses (and their personnel); to develop effective investment attraction strategies based on those insights; to identify relevant location data (amongst the mass of irrelevant metrics), and use them to tell a coherent story; and to communicate location benefits in compelling ways, based on subtle, specialised location and industry knowledge.
AI will no doubt be a powerful technology to support all this, and it may be different from all the technologies that preceded it. But, at the end of 2023, the very human expertise and judgement of inward investment and place marketing professionals remains critical.
Attracting inward investment in a tough economic climate
Those of us with long enough memories may be forgiven for thinking inward investment attraction used to be easier. In the UK, according to headline government data, FDI projects in 2022-23 are down 27% versus 2016-17 (although up 4% versus 2021-22). International competition is tough, with governments increasingly using big incentives to attract businesses. And the UK’s national inward investment value proposition is arguably harder to distil into an elevator pitch than it used to be.3 Some formerly booming locations (for example in technology corridor locations outside London) are feeling the pinch. And yet, there are still significant opportunities out there.
Financial services is attracting more investment projects now than in 2016-17. Project numbers in the high-value Advanced Engineering and Software and Computer Services sectors aren’t far short of those recorded in that year. Many of our industry clusters present powerful propositions, from sustainable energy, decarbonisation, and process manufacturing hubs (e.g. Teesside and the Humber), to big-city digital agglomerations. The UK offers leading, research-focused universities, and delivering our Net Zero ambitions will require huge investment, as we’re already seeing in renewables.
But because it’s a tougher environment, investment promotion agencies must be match fit. They need compelling, data-supported value propositions targeted at specific, credible growth opportunities (not just the same old off-the-shelf sectors); they need integrated marketing strategies combining online investor attraction with focused offline activities; and they need to avoid the basic marketing mistakes that still hold back IPA performance. Which leads us on to…
Clarity’s Inward Investment Marketing Word of 2023
After much discussion (while wearing paper hats and drinking mulled wine), we’ve decided that our Inward Investment Marketing Word of 2023 is segmentation.
We haven’t chosen it because we think it’s something inward investment marketers are doing especially well. Rather, we think it’s an opportunity - with the potential to transform inward investment marketing performance if it’s done better.
In marketing, segmentation can be defined as ‘the aggregating of prospective buyers into groups, or segments, that have common needs and respond similarly to a marketing action.’4 In inward investment marketing, obvious segments include companies in specific, target industry sectors or operations with the same business functions.
Our goal as inward investment marketers should be to provide specific investor segments with the location information and data they need (and are likely to be searching for online), and not the information and data they don't (and aren't). This is really important, because businesses in sectors as different (for example) as life sciences and logistics have entirely different location needs, and messages or data prepared for one will often be irrelevant to, and unwanted by, the other. And most inward investment websites currently fail the segmentation test, either because there's inadequate technical segmentation between sector offers (even if they're on separate ‘sector’ website pages) or because messages for different segments are mixed together (e.g. in the same website blog or news feed). The result is that search engines (e.g. Google) are 'confused', making content harder to find (who’s searching for a word soup including 'genomics' and 'portcentric'?), and investors in any given segment are put off, because too much of what they do find is irrelevant to them.
If IPAs address this simple problem with effective technical and content strategies, there could be a substantial increase in the incidence of investing businesses (or their advisors) finding location solutions aligned with their specific needs - which for IPAs would mean more investment leads. This is just one example of getting the marketing basics right!
A year in inward investment marketing
For Clarity, it’s been another interesting year in inward investment marketing. We’ve researched and developed value propositions and marketing assets for sectors as diverse as energy-intensive industry, defence and security, digital tech and even film locations, not to mention Freeports and ‘places to live and work’. And we’ve developed and implemented websites and internet marketing strategies focused on effective investor segmentation and lead generation functionality.
As always it’s been a pleasure to work with our valued customers and partners. We’d therefore like to say thank you to all our clients and collaborators in 2023, and to you for taking the time to read this article. We'll be sharing more insights and a new Inward Investment Marketing Guide in early 2024, so please follow us on LinkedIn to receive updates.
We wish you a Merry Christmas and Happy New Year, and all the very best for 2024!
Author:
Sources:
[1] JLL - Is hybrid really working?
[2] FDI Intelligence
[3] FT, 15.11.23
[4] Investopedia
