For those working in investment promotion and economic development, 2020 has been extremely disruptive. Over the past 12 months, the extent to which an investment promotion agency (IPA) was impacted was directly linked to its ability to adapt to extraordinary circumstances. With a COVID19 vaccine on the way, optimists may assume that 2021 will be at least somewhat more fruitful for investment promotion. Still, no one should assume a return to a pre-pandemic business model. With that in mind, the following are key initiatives that economic development professionals should consider for 2021.

Investment pipelines will improve in 2021 

IPA professionals should be optimistic that anemic pipelines of the past twelve months will improve. Not only are businesses across most sectors anxious to explore new locations for 2021 and beyond, but the need to diversify operating points is essential to business continuity. Anecdotal evidence in recent months indicates that prospective investors are starting the tire-kicking process for new jurisdictions, and IPAs need to be ready to win these projects.

Virtual prospecting will become even more important 

Yes, a vaccine is being rolled out and there is reason to think that business travel will rebound in 2021. However, for many executives, the near-medium term offers greater potential for scoping new investment locations and their respective economic development professionals via digital means. The pandemic has proven that this model facilitates information-sharing and relationship building. It is also much more cost effective. When on-site visits do occur, it will happen later in the process. Smart IPA executives will embrace this digitally-driven trend in 2021.

Successful locations will adapt their key differentiators 

Whether a municipality, region or country, how a jurisdiction markets itself must change in 2021. Investors will certainly look for sites that are business-friendly and cost-effective, but this will be alongside the capacity to operate seamlessly through disruptive periods. Thus, IPAs’ promotional marketing needs to factor in strategic business continuity plans and infrastructure to support a remote workforce. Without these considerations, there will be limited traction in winning new investment projects post-pandemic.

Incentives need to be remodelled to a post-pandemic business environment 

Historically, targeted incentives have proven a great way to drive new investment into a jurisdiction. To be successful in 2021, economic developers will need to refine their incentive packages to help new investors manage the overhead costs associated with a healthy work environment. These can include onsite health-care professionals, reconfiguring workspaces for social distancing, and ensuring a sanitized workplace. Such expenses have added up for many businesses during the pandemic, thus helping to defray these outlays for new investors in 2021 via grants or tax credits should not be understated. Employee health will be a hallmark of the post-vaccine business environment.  

Opportunity often arises from periods of disruption, and in the area of economic development this is no exception. As 2021 plays out, the most important thing an IPA can do is to ensure that it has properly pivoted to appeal to new investors. Adapting to the changing needs of companies that seek to diversify their operating platforms has never been more crucial, whether it be in terms of promotion methods, reinventing the value proposition, or developing new incentive schemes.