Survey data suggest it might not be that easy for manufacturing multinationals to find information on suitable industrial investment sites in many countries around the world.
It will probably come as no surprise that FDI in the manufacturing sector is in decline. According to UNCTAD, the services and primary sectors continue to capture an increasing share of FDI as the years pass. Despite these trends, manufacturing still represents somewhere between 30 to 45% of total cross-border FDI inflows annually, and there have been more than 3,000 new manufacturing investment projects annually over the last decade.
Which raises the practical question: How do companies and their advisors locate suitable investment locations for their manufacturing projects when considering entry in new markets? The World Bank Group’s Investing Across Borders database suggests that it might not be that easy in most countries around the world. The database's index on Access to land information compares countries on the ease of access to land-related information through the countries’ land administration systems, including land registries, cadastres and land information systems and finds that globally of the 87 countries surveyed the average score is relatively low 41.4 out of 100 (Figure 1 below the jump; click on the image for a larger version).
Far too many countries fail to make it easy for interested investors to access land information through public institutions such as a registry or cadastre, and, even worse, far fewer take advantage of innovations in information and communication technology to make access easy over the internet. Even the database’s best performer—Montenegro—doesn’t provide information about available land parcels over the internet.
The database reveals that 3 out of 4 advisors to interested foreign multinational companies seeking industrial plots use a country’s respective National Land Registry to look for related land information about suitable sites for potential manufacturing investments. Yet only 1 in 10 of the countries surveyed make this easy for investors by providing easily accessible information on-line and accessible publicly over the internet (Figure 2).
In addition only 35 percent of advisors to multinational investors seeking industrial lands use a country’s Investment Promotion Agency (IPA) as a portal to seek information about available industrial lands. Perhaps this should not be surprising since less than half of the countries surveyed indicated that their countries IPA actually provided information about land plots available for investment on-line (Figure 3). Many countries could learn from Czech Invest, which provides an online database of business properties interested investors can search before even arriving in the country. The introduction of an online inventory of public industrial lands would greatly facilitate interested investors’ search for suitable locations to make their manufacturing investments. It would also be a way for governments to send a broader signal to interested investors about a country's openness to FDI.