Though the evolution to flexible factories is not yet fully complete, the global factory is already in operation and it looks set to revolutionise not just the way manufacturing is done but also how manufacturing investment is secured.

Today, the bulk of world trade is carried out among multinationals and, more importantly, within multinationals – different parts of the same company trading with each other.


Gone are the days when an investment promotion agency could simply talk a large multinational into locating in its vicinity and then wait for the tax revenues to roll in. These large companies are now slicing and dicing their global operations into ever smaller units and outsourcing ever more of their activities. Investment promotion professionals, particularly in the developing world, must adapt their sales pitches to suit the new realities of the market. Flexible factories require a flexible approach to investment promotion.

Furthermore, these IPAs must work with government and business leaders in their respective countries, regions and cities to position their markets in a way that can meet the rapidly evolving and increasingly complex needs of today’s fragmented multinationals. They must develop local entrepreneurs and encourage investment by home-grown enterprises. This is the only way most locations can feasibly integrate themselves into the global factory of the future.