When investors think about entering new locations their biggest need—and biggest challenge—is often how to access the information they need to help them make decisions. Reliable information—especially in emerging markets—helps to reduce investor perceptions of risk in an unknown location and reduces the transaction costs of establishing in a new market.
Moreover, you would think government investment promotion intermediaries (IPIs) should be keener than ever to make as much effort as possible to attract new investors in light of the cut-throat competition for lower levels of FDI since the crisis. Wouldn’t you? Well, it would seem like they aren’t. The World Bank Group's Global Investment Promotion Best practices 2012 survey  (GIPB 2012) found that, worldwide, the responsiveness of IPIs to investor inquiries is shockingly low-with 80% of IPIs not even responding to sector-specific investor inquiries.
This clearly translates to missing investment opportunities-even when investors come knocking on their doors.
Nevertheless, GIPB 2012 shows that good facilitation is possible even with limited resources. For example, Invest in Cyprus, one of the world’s top facilitators, has a total staff of less than ten to undertake a full range of investment promotion functions. Similarly, good practice is beginning to emerge in most regions, for example API-Mali has emerged as the world’s top improver since GIPB 2009, showing what is possible even in a very difficult environment. The World Bank’s Investment Climate Department has worked particularly with IPIs in fragile and conflict-affected countries over recent years to help them improve the quality of facilitation services they offer to investors in the most emerging markets– e.g. in Mali, Yemen, Sierra Leone and others-and these improvements have been reflected in GIPB 2012.
The report did find that the vast majority of the world's IPIs are now online. But although investors now have a place to start their information searches for most countries, there are vast differences in the quality and usefulness of location information found online. Moreover, many IPIs, particularly in developing economies, struggle to both provide relevant information to investors and to directly interact with new investors.
If they hope to attract more investors, governments need to take urgent steps to ensure that their IPIs are accessible and responsive to investors’ inquiries. Helping them take steps in that direction, GIPB 2012 provides each IPI with a confidential report on its own results and presents good practice examples from each IPIs region and globally.
This video illustrates the success of some of the investment generation projects covered by GIPB 2012.