Artificial intelligence (AI) is “massively disruptive” for the economic development industry, argues Chris Camacho,  CEO of Greater Phoenix Economic Council (GPEC), as sales pitches give way to a data-driven dialogue with investors.

“AI is going to enable an organisation like ours to be consultative advisors. That’s the big shift I see. It’s no longer promotions and sales; it’s about becoming a consultative advisor like a Deloitte or McKinsey,” he says in an interview with fDi Intelligence. “I think it’s massively disruptive for our industry.” 

With a greater access to information, AI technology allows economic development organisations to predict which companies are looking to expand and where, according to Mr Camacho. By the same token, it also enables them to look inwardly, better understand their own strengths and weaknesses so as to advise prospective companies .

From ‘blind selling’ to consultative advisors 

“The most significant thing we’re working on is a risk monitor,” he says, which uses a consultancy template to understand the variables companies look at when investing in advanced industries such as semiconductors or data centres. These variables include natural disaster indices, climate patterns, water quality and soil quality. Mr Camacho expects the risk monitor to be built by the first quarter of next year. 

He reflects on how the broader industry will change as a result of investors having more access to data points about prospective destinations, reinforcing the demands on investment promotion agencies (IPAs) to anticipate what an investor’s needs are.

“[Investment promotion] used to be a ‘blind sell’ of your positive attributes,” he says. “The way I see the future of our field is that economic development is going to become so rich in data and information that while organisations will still market [themselves], once they get someone interested, the process will actually be about advising them about the risks [on their market relative to others].”

Aside from being applied to data and risk, AI also has rather more mundane, practical uses, such as in speech writing and creating talking points when on overseas trips.

“AI is still in its early days, obviously, but we’re probably one of the more progressive economic development organisations globally [in our use of it],” Mr Camacho says, adding that he treats GPEC like “a start-up where we’re able to integrate new tools constantly”.

With an initial investment of $250k, GPEC has been on a push to streamline its information gathering and processing since 2016 and, under Mr Camacho’s leadership, it has become more assertive in its use of technology. 

“Our journey started with web scraping, which led to building software algorithms that use predictive modelling,” he says. One example of this is analysing 10-k filings (annual reports required by the US Securities and Exchange Commission) to see where public companies are next likely to expand. This data is then fed through into the IPA’s marketing team to target specific investors. This data is then fed through into the IPA’s marketing team to target specific investors.”

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Since launching this set of tools seven years ago, the proportion of its project pipeline that comes from directly engaging with companies themselves has grown from 25% to 33%.

In 2022, Phoenix tracked a record amount of foreign direct investment at $28.4bn, according to greenfield investment monitor fDi Markets, notably Taiwanese chip company TSMC’s plans to establish a giant multi-billion dollar plant there.

Amid growing global competition for big projects in certain strategic sectors such as semiconductors and electric vehicles, he concedes this technology may widen an already uneven playing field. 

“This does mean a handful of global markets are going to keep on winning,” he says. “And my job is to make sure that Phoenix is one of those places.”

This is part of a series on the uses of AI in investment promotion. Is your agency deploying AI to attract investment? Get in touch at seth.ofarrell@ft.com.