Large metropolitan areas may get the lion's share of attention when it comes to site selection and FDI strategies, but small (population of between 100,000 and 300,000) and micro-sized (fewer than 100,000 inhabitants) cities and towns prove that even they can be dynamic players in attracting innovative and international corporations.

Take Fredericton, in the Canadian province of New Brunswick, for example. Besides being the province's capital, this micro-sized city, with a population of just over 56,000 according to the 2011 census), is Canada’s first city to offer free, universal Wi-Fi. The city is also known for being a national hub for start-up businesses. Its economic development strategy – Vision 2020 – launched in March 2013 was based around creating a world-class environment for start-ups, particularly those in knowledge-based industries.

“One of the biggest elements of the Vision 2020 process was to ensure that we had a very supportive ecosystem and environment to nurture start-ups and businesses in our community,” says Fredericton mayor Brad Woodside.

That environment includes Knowledge Park, a 745-square-metre facility for like-minded entrepreneurs, technology start-ups and R&D initiatives, and occupant Planet Hatch, which connects start-ups with tools and resources to accelerate the stages of getting ideas to market.

Lafayette looks up

Another example of a smaller city punching above its weight is Lafayette, Louisiana, which has a population of just over 120,000 according to its 2011 census. Among Lafayette's assets are LUS Fiber’s 1 gigabyte connectivity, which is considered the fastest home internet in the world; the Louisiana Immersive Technologies Enterprise, which enhances training programmes in the oil and gas, healthcare and education industries by creating environments that recreate the sights, sounds and danger of real-life situations; and the University of Louisiana at Lafayette and South Louisiana Community College.

“The Acadiana region of southern Louisiana and Lafayette are building a workforce and infrastructure that can meet the needs of all industries in the region,” says Gregg Gothreaux, president and CEO of the Lafayette Economic Development Authority. LEDA offers a business incubator and accelerator known as the Opportunity Machine, which is intended to foster entrepreneurism by providing business process support, professional service engagement, and support and facilitation in identifying funding, among other services.

Just recently, Lafayette has branched out into the technology/digital media sector, announcing three new projects in this field that will create 1000 jobs.

Heredia homes in

Innovation is spreading to small and micro locations elsewhere in the Americas. For example, Heredia in Costa Rica has become an FDI hotspot thanks in part to its location at the centre of the country as well as its free-trade zone, Global Park. Today, Global Park accounts for 45% of Heredia’s FDI.

“Heredia's central location within San Jose’s Great Metropolitan Area, as well as its concentration of technical and university centres, gives it an edge by allowing young, specialised talent from nearby cities such as Alajuela, San Jose and Cartago to commute to work and study in the vicinity at the same time,” says Jorge Sequeira, general director of the Costa Rican Investment and Promotion Agency. “This is why it has become a hotspot for multinationals in the services sector as well as hi-tech manufacturing, which are executing more than 70 complex business processes in 10 different languages and servicing the world."

Among the hi-tech service companies located in Heredia are Bayer, Hewlett Packard, IBM, Cognizant, along with shared service centres for Bacardi, Baxter, Kimberly-Clark, Roche and others. In addition, about 44% of manufacturing life sciences companies with operations in Costa Rica are located in Heredia along with 17 hi-tech advanced manufacturing companies.

Ghent's growth

Within Europe there are numerous small and highly innovative locations. Officials in the Belgian city of Ghent are making strategic choices to focus on biotech, ICT, new materials, clean-tech, logistics, creative industries and retail. “Our goal is to ensure that Ghent remains or becomes a first-tier investment location in each of these sectors,” says Brecht Lootens, Ghent's investment promotion manager.

Ghent is a pioneer in biotechnology. The first ever genome sequencing was carried out at Ghent University and Ghent-based biotech company Plant Genetic Systems. With 1300 scientists working in areas such as the Flemish Institute of Biotechnology, incubation centres and university spin-offs, the city continues to attract considerable R&D activity from companies such as InnoGenetics, Bayer Cropscience, BASF and DevGen.

With some 250,000 inhabitants, Ghent also serves as the largest educational centre in the Belgian region of Flanders. Some 72,500 students are enrolled in two universities, four university colleges and a business school.

The city continues to coordinate its efforts with the key partners such as Ghent University and other strategic centres of expertise such as digital research specialist iMinds, life sciences research institute VIB, the port authority, private companies and the real estate sector.

Ghent University, the city council and the Port of Ghent also partnered to create the Ghent Bio Economy Valley (GBEV). Already home to Europe's largest biofuel cluster, GBEV boasts a sectorial market share of 7% in FDI invested in Europe. It has also initiated the Bio Base Europe, a pilot plant intended to shorten development time and minimise costs for new bio-based products.

Ghent is also recognised for its investments in IT infrastructure, as well as its commitments towards climate neutrality. Recently, China's largest telecoms equipment maker, Huawei, opened an R&D centre for silicon photonics in Ghent. Multinational companies such as navigation and mapping product specialist TomTom and Philips TV producer TP Vision have their European innovation centres in the city.

Eindhoven to the fore

Facing post-industrialisation challenges in the 1990s, Eindhoven in the Netherlands, with a municipal population of just over 221,000, has emerged as one of the cornerstones of the Dutch economy. In fact, in 2013 Forbes named Eindhoven as “by far the most inventive city in the world”.

“Eindhoven [provides] the model for a new way of thinking about collaboration and regional development,” says Louis Zacharilla, co-founder of the city's Intelligent Community Forum. “It has developed an ecosystem that links its private sector, government and its academic and creative communities in a way that looks like an economic ‘triple helix’.”

Among the companies that Eindhoven and its surrounding region play host to are Philips, DAF Paccar, ASML, VDL, FEI Company, TomTom, NXP, Eindhoven University of Technology, TNO, Design Academy Eindhoven, Benteler Engineering, High Tech Campus Eindhoven, High Tech Automotive Campus and the Holst Centre.

Philips initiated the establishment of High Tech Campus Eindhoven. In 2003, the campus was opened to other technology companies, which resulted in the rise of numerous innovative companies. Today, more than 125 companies and 10,000 researchers, developers, entrepreneurs and employees work at the campus.

Grenoble stands out

Likewise, Grenoble in France, with a population of about 160,000, has developed synergies between industry, research, higher education and local government that has resulted in investment in international-calibre technological infrastructure, spurred the growth of a diverse industrial base and supported the emergence of a unique scientific environment. As a result, Grenoble is home to clusters in electronics and microelectronics, nanoelectronics, IT and software, medtech and healthcare, chemicals and cleantech, and new energy technologies.

“We still have a fair number of jobs in manufacturing, which is not the case in other places,” says Veronique Pequignat, the director for international actions and key technologies  at Grenoble-Isère's economic development agency.

In September 2014, US materials company Hexcel announced a $250m investment to build a new carbon fibre plant in the Grenoble-Isère area. The site chosen was among 71 studied worldwide. In November, CG, a company belonging to the India-based Avantha Group business conglomerate, announced plans to set up a new manufacturing, testing and calibration facility in a suburb of Grenoble. CG chose Grenoble to meet demand in France for Linky smart meters and provide local support for its customer that will be rolling out some 35 million of the smart meters by 2021.

“We are extremely pleased to be building this new world-class facility in Grenoble,” says CG’s managing director and CEO, Laurent Demortier. “We are also thrilled to be in France, a country known for groundbreaking academic research and cutting-edge technology.”