The Covid-19 crisis hit Europe just as the investment promotion industry was gearing up for its annual rendezvous at Mipim in early March. Back then, it seemed impossible to imagine they would call off the four-day event held every year in Cannes, southern France.

In hindsight, Mipim 2020 marks a turning point for the whole industry. Its demise was a wake-up call on the level of disruption unleashed by Covid-19.

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Instead of running back and forth along the Croisette for Mipim’s usual whirlwind of handshakes, business events and cocktail parties,  investments promotion agencies (IPAs) and economic development organisation (EDOs) found themselves grounded. Instead, they ended up unexpectedly mulling over the need to evolve their models and tools to adjust to a new world where physical interactions, which used to define their work, are no longer a viable option.

Adapting to change

Two months on, the evidence of the ongoing adjustment is already tangible. “We are seeing a massive growth in the provision of digital services,” Henry Loewendahl, the founder and CEO of investment advisory firm Wavteq, tells fDi

The number of IPAs and EDOs “implementing more digital services so to minimise the need for investors to make site visits” has more than tripled from before Covid-19, according to the results of Wavteq’s poll of 145 investment promotion professionals on April 30, where 56.6% of the respondents confirmed their shift towards digital services, from a pre-crisis level of 20.7%. 

“This had to take place because of the crisis. It remains to be seen what services will continue to be provided digitally after the crisis, but it’s a huge opportunity to fast-track foreign as well as domestic investment through digital onboarding processes,” Mr Loewendahl says. 

Get on board

Digital onboarding refers to the services IPAs and EDOs can provide digitally throughout the different stages of an investment decision process. They give investors a chance to set up and start operating without extensive travel visits and face-to-face meetings. If websites and online material get the investors interested in the first place, site selection services are a vital phase of digital onboarding strategies.  

“Site visits used to be extremely expensive,” says Mr Loewendahl. “There are tools based on geographic information system technologies and virtual reality (VR) that allow companies to streamline and assess opportunities in particular locations without the need to be physically there, at least in the early phases of the selection process.

“VR in particular has great potential for site visits, particularly in the developing world, where investors tend to gravitate more towards free zones and industrial parks, which lend themselves perfectly to VR solutions. As far as I know, I’m not aware of any agency or organisation using VR extensively for site selection purposes at the moment.”    

What happens next varies country by country and extends to the administrative steps investors have to cover to set up in a foreign location, such as business licences, tax numbers and bank accounts. “IPAs and EDOs should provide all the administrative services online under a one-stop-shop (OSS) model,” Mr Loewendahl says. 

Jump to digital

Even in more capital-intensive projects such as manufacturing – where some processes are more complex since they require land, properties, utilities and suppliers – the technology is available to enable these stages virtually, he says, adding that investors should also be able to access a virtual marketplace to find the workers, as well as the suppliers they need for their local business. 

“IPAs and EDOs really need to look at what the future of investment looks like. They need to think of fully digital onboarding services where companies find all the need to set up and operate without being there.” 

Health risks and compulsory self-isolation measures are expected to tarnish the appeal and viability of cross-border travel for months to come. Digital onboarding offers an alternative for IPAs and EDOs to keep their locations relevant in this new normal by means of replacing a handshake with a click. It may not be as glamorous as Mipim, but it could still work. 

Wavteq has a working supplier relationship with the FT and provides consultancy, software development and agent services that contribute to the development of the fDi group of products and services.