The new generation of investment promotion policies proceeds to target foreign investors at the level of industries and firms to meet their specific locational needs at the activity and cluster level, according to the World Investment Report 2001, published here recently by the United Nations Conference on Trade and Development (UNCTAD).
According to the report, the growing spread and mobility of transnational corporation are making local conditions more, not less, important, for mobile foreign direct investment (FDI) " sticks" only in places where efficient complementary factors exist.
Therefore, a critical element of such investment promotion is to improve - and market - particular locations to potential investors in specific activities.
The new generation promotion is growing in practice, as witnessed by the proliferation of subnational agencies (of which there are currently at least 240) and even municipal investment promotion agencies, says the report.
According to the report, in the first policy generation, countries liberalize their FDI regimes and adopt market-friendly policies, and in the second, governments go a step further and actively seek to attract FDI by "marketing" their countries, which leads to the setting up of national investment promotion agencies.
( 10/03/2001)
