EDOs/IPAs: Can we prepare for the post-pandemic era?

By Andreas Paulicks, Senior Partner
Frankfurt, September 2 2020

Covid-19 is probably the toughest global challenge the world has faced in recent decades. We do not know how long it will last and how severely it will ultimately affect us. However, like every crisis, it will end at some point. And like every crisis it has something of a forest fire – amid the tragedy the seeds of renewal grow. Can we already prepare for the renewal?

Every crisis has taught us one important lesson: organisations that adapt faster to the new environment and the initial upswing will emerge stronger. Institutions that reinvent themselves, exploiting the benefits of greater insight and foresightedness, will be the most successful. Organisations that capitalize on the new environment faster than the competition can change the field of play sustainably.

What does this mean for economic development organizations? How can we adapt, while we are all unsure what the post-viral era will look like and how our organization’s environment will have changed?

One thing is sure: COVID-19 will have a significant impact on economic development and the work of IPAs. It is impossible to predict all changes, and far be it from me to claim otherwise. However, I think some reasonable assumptions can be made which provide some indications as to the “new normal” and which will help EDOs/IPAs to start adapting accordingly right now.

1. Business Retention and Expansion (BRE) will face a significantly changed demand scenario:Business retention will very likely grow in importance due to changing demand and the intensity of economic effects – both negative AND positive. The type of demand will also change, e.g. there will be more companies struggling to survive (rescue measures), companies and even entire sectors that are likely to disappear (revitalization demand), companies that are in need of restructuring, especially in order to change their business model or to become more resilient (restructuring support), but there will also be winners and beneficiaries, such as booming businesses and sectors (support for emerging sectors, developing new growth fields, developing new clusters, focusing trade promotion on new export opportunities).

2. Adapting investment promotion to a fundamentally changing FDI landscape: Investment promotion will require substantial repositioning. Firstly, because investment demand as such will grow or decline depending on the sector, from soaring businesses to sectors that are struggling to survive. Secondly, because global supply chains must become more resilient, which will mean disinvestment, new investment, relocation, re-shoring, near-shoring, dual sourcing, China+1, etc. Locations that come to understand these strategies early enough could benefit most from these opportunities.

3. IPAs and EDOs must strengthen their own organizations: Digitization of processes, adapting teams to newly required skills, adapting to a changing marketing landscape (e.g. more virtual events, fewer fairs/exhibitions, new digital formats and plattforms for match-making and lead generation), rebalancing workforces between business divisions’ shifting demand.

PM&P helps EDOs/IPAs to manage change and to cope with disruptions by raising key questions and trying to answer them:

Key questions for reconfiguring EDOs/IPAs (Examples)

  • How has the demand for business retention & expansion changed due to the crisis?
  • How should we adapt to the new demand of our local businesses?
  • Which particular challenges for local businesses should be prioritized within our support?
  • What are promising growth segments in the post-pandemic era?
  • How should we adapt our cluster strategy to new growth opportunities?
  • Are we still targeting the right sectors?
  • Are we still targeting them in the right way?
  • Are there new target groups emerging?
  • How will location strategies change within our target groups?
  • Do we have to adapt our location proposition to new investment scenarios (e.g. re-shoring, near-shoring)?
  • How can we optimize our investment promotion with new digital tools, platforms, measures?
  • How did the pandemic change digitalization developments?
  • What are the key digitalization trends within IPAs/EDOs?
  • What do they mean for our organization?
  • Which skill upgrades are necessary?
  • How do we adapt to the new marketing landscape?
  • Which organizational changes are inevitable? Which changes can already be implemented?
    While not all questions can be answered at this stage, raising them in itself represents a first important step towards creating a more resilient and agile organization that will benefit from the post-crisis era.

    I look forward to receiving your feedback and discussing these matters with you. Please feel free to contact me.

    Andreas Paulicks

    Senior Partner