Can you tell us about the OECD Network of Investment Promotion Agencies [IPAs]? What does it do and what do you see as your top priorities?

The OECD Network of Investment Promotion Agencies consists of, predominantly, most of the IPAs of OECD countries, but partner countries are also invited to participate. So it is a good platform for countries that have similar economic frameworks. The purpose of this platform is to offer best practice exchange, and also, in conjunction with the Secretariat of OECD, we do research and benchmarking of IPAs – research about monitoring and the evaluation of the success of investment promotion.

So it is a good platform for training and learning, and also for providing insights from IPA practitioners to the OECD.

We are living in one of the most difficult times in recent history for investment promoters. How does the ecosystem of IPAs go about tackling these enormous challenges and how can you best define what best practice looks like in such a chaotic time?

Given the diversity of participants, the question of best practice divides itself into at least two different segments. One segment is closely connected to the governments and there is a number of countries where IPAs are a part of the government. In those cases, the best practice is to act closely as a sounding board; being the pragmatic voice, but also the executioners of the policies of the government towards creating the right environment for foreign direct investment [FDI].

And then there is another kind of IPA, which is a little more detached from the government. Such IPAs have more liberty to get insights from the market or from the investors who want to enter the country, and they might have a different way of thinking. They can have their own strategies, and their own industry areas that they want to prioritise for investment promotion.

Do you think the nature of investment promotion will be fundamentally changed by the pandemic?

I think the pandemic will lead to a different kind of competition between the economic areas of the world. The strengths of certain areas might get stronger and the weaknesses of certain areas might get weaker. The factors causing investors to decide to go to country A or country B are different than before, and are also requiring different strategies from IPAs. The conversations around what benefits can be delivered to the investor and what kind of mutual benefit will exist in the end [have changed].

What is also different is that the topic of sustainability plays an even larger role. This means that countries are developing measures or screening systems to examine the kind of investors that are interested in entering their country and are looking to promote more sustainability, which ultimately also helps the economy… [through a] range of other benefits.

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How can investment authorities strike a balance between prioritising sustainable investing and ESG criteria while also making sure they hit investment targets and create enough jobs at a time when there are fewer FDI projects available?

In my opinion the economical necessity to attract investments no matter what is pretty clear and absolutely understandable, and responsibility to promote sustainable investment goes beyond the responsibility of the country. This is an aspect where particularly OECD members can also take into account consumer behaviour, because in the end this is what triggers [the push towards sustainability]. We have to weigh up the costs and beneficial aspects of sustainability, and take a more holistic approach.

Germany is one of the most important global sources of FDI, as well as being a big inbound investment destination. Is there a responsibility or urgency for major source market countries to help lead the FDI recovery globally, by incentivising their domestic companies to invest internationally? 

Our mandate is non-political, so we don’t make our own economic policy – we just reflect what the German government is giving out as the guideline. We would say that we support market mechanisms in our government frameworks. We don’t promote particular industries or particular companies. We are there for all the German companies that want to export and all international companies that want to be successful in the German market.

Homepage image by Eric Piermont/AFP via Getty Images.