Foreign direct investment (FDI) has always been a part of the changing landscape of our world. Investments have been made directly, from one country to a foreign one, for thousands of years. But the development of coherent strategies, practices, protocols, surveillance and accompanying data, only started in the past 30 years or so, with a few exceptions. Over that time, it has also affected people’s lives, upbringing and sense of pride. 

Memories of FDI 

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I grew up in East Fife in the 1960s in a port town called Methil. It was immortalised in the song ‘Letter from America’ by The Proclaimers as the devastated, defiant Scottish town that many moved away from.

Methil was the largest coal port in Europe, exporting from the Forth Field, itself one of the biggest fields in Europe lying underneath the estuary of the River Forth. Following the coal closures of the mid-to-late 1960s, the mining and shipping industries collapsed, which — coupled with the decline of the fishing industry — led to 80% unemployment. 

Sadly, the town, along with other towns along the coast, did not regenerate quickly. However, since it had the logistics and infrastructure, including the railway tracks and the shipping harbours, it ended up creating wealth again a decade or so later, with the advent of oil operations in the North Sea. 

We subsequently moved to England, to a planned new town: Letchworth Garden City in North Hertfordshire. At school there, I noticed that at the start of a new term, there would often be a new American, Japanese or French classmate. But they were only ever there for two years at a time. This was because their parents — and in those days, mostly fathers — had been posted there. 

Yes, it’s another FDI story. Many of these children’s parents worked for BorgWarner, an American gear manufacturer for automatic transmissions in cars. One day we had a school trip to the BorgWarner factory in our geography lesson and were given a tour by the father of one of the American girls in my class. Being already a keen geographer, I asked him my first FDI question during the Q&A session at the end: why Letchworth?

The answer: it is specifically positioned to be good for distribution just outside London and there was a crane manufacturer, Jones Cranes, next door. In short: skills, geography and proximity for transporting to Europe.

Planned economy, regeneration and diversification

Fast-forward to the 1990s. As Europe started redeveloping and emerging markets started opening up, new drivers of FDI started emerging. 

I remember visiting Alba — then the biggest aluminium smelter in the world outside China — right in the middle of the desert in Bahrain. It was a symbol of the need for diversification, which is something you see elsewhere in the Middle East. Diversification was a driving factor in the first free zone in the region too: Jebel Ali Free Zone. This too was a planned diversification taking advantage of the UAE’s position. 

After the fall of the Berlin Wall and the collapse of the Soviet bloc, eastern Europe went through a deep regeneration. On one hand, there were the privatisations, which were sullied somewhat by the oligarchs. But there was also a need to redefine Soviet-era industry. 

Towns, cities and countries started thinking: “We can better ourselves, create wealth, create jobs, make ourselves more important and give ourselves some credibility in the world by attracting businesses.” So the regeneration of eastern Europe started transitioning out of great state-driven schemes to a sort of more private, individualistic style. Around that, we started to see some more elaborated strategies, standards and protocols. It all started to become less random. 

It was at that point, around 1998, that I thought: “This is going to be a big thing.” I saw the potential for a whole investment promotion sub-industry that needed describing to the world, and serving with a publication of what tracks these developments and practices. That really was the foundation of fDi

A new magazine is born 

When I arrived at FT Business on January 1, 2000, the first day of the new millennium, I put together a business launch plan for an global FDI publication. The first issue came out in the autumn of 2001. 

On one hand, there were corporations around the world looking to become more efficient and take advantage of opportunities to globalise and grow. On the other, there was a bunch of cities, towns, counties, states, countries wanting to better themselves, regenerate and diversify. We set up fDi to serve that connection.

Initially, investment promotion was certainly not sophisticated. Over the years, alongside the evolution of our editorial coverage, the whole market has become more scientifically driven and nuanced in its activity, both on the promotional side and in terms of best practices. 

In roughly 2006, having always tried to rank locations and success in the market, we started to develop our own unique benchmarks for the industry. And two years later, we acquired fDi Benchmark. I remember that it grew exponentially in the first three or four years: it was very successful. 

Meanwhile, the top FDI agencies in places such as Scotland, Canada, Australia and Hong Kong, developed into expert career FDI practitioners, which helped our business as they required more information and data, as well as better quality and usability of that information and data. 

The rise of digitisation

The quality of this demand was further boosted by the financial crisis in 2008.

Following the crisis, there was a reverse diaspora effect, whereby talented MBA graduates from Wall Street decided to return to their home countries. There was a “reinflux” of talent into places like Colombia, Lebanon and the Balkans. 

All this played into the general growth of FDI and the level of expertise required for information in the investment promotion market. We started to pinpoint themes and pillars within the world of foreign investment, such as social impact investing, radical urbanisation and the future of cities, both major and second-tier. We began to become driven by the data and the trends that we were developing ourselves. 

One of these trends was and continues to be digitisation. Investment promotion has gradually moved away from beaches and golf courses and became more digitised, which is what led to our purchase of digital mapping company GIS Planning in 2017. 

North American economic development organisations (EDOs) were certainly way ahead with their online and mapping strategies. We bought GIS Planning to bring that capability and efficiency to the rest of the world — to places like  Bordeaux, Dusseldorf and Gothenburg, all of which have really radiated from using it.

Now, we’re looking at remote location promotional technologies, which means people won’t have to fly halfway around the world to visit a site or to go to an event to drive their locations. These are the changes that are coming, and we have and always will be at the forefront of serving these dynamics, but without disregarding the human pride element behind FDI and regeneration. There are numerous stories of individuals or groups really going beyond the call of duty to serve their own location.

This drive has turned us into a leading data, information, network provider in the marketplace. It put us in the position we are in, today, where we feel it’s incumbent on us to lead, to dig out these stories, find these trends, lead these trends, and cover them for the world — which we will continue to do beyond 2020. 

This article first appeared in the December/January print edition of fDi Intelligence. View a digital edition of the magazine here.