Step 5: Putting Together the FDI Plan

The preceding pages within Strategy and Planning outline the development of key elements of FDI attraction strategy. This section helps communities pull all these elements together to develop an effective overall FDI strategy and plan.



Existing foreign firms should be part of any region’s FDI strategy

In 2020, foreign direct investment increased $244.9 billion to $6.15 trillion from $5.91 trillion at the end of 2019, according to statistics released by the Bureau of Economic Analysis (BEA 2020). Even for communities with meaningful resources and budget, Business Retention Expansion (BRE) activities for foreign firms should be a primary focus of FDI strategy and effort.

Lessons Learned — Importance of Expansions of Existing Foreign Firms

Brookings argues in the blog post: “Regional foreign investment strategies begin at home”, that even major metro areas are recognizing the superior ROI of focusing on BRE services: “The lessons coming from [metros] in the GCI Exchange are that chasing new foreign investment (or greenfield projects) is resource-intensive, represents only one component of a comprehensive FDI program, and typically fails to deliver large marquee projects … metro economic leaders are starting to see the potential of the foreign-owned firms they already have…Now they are becoming more strategic by reorienting their global efforts toward better understanding their local economies and providing comprehensive BRE services once any new FDI announcement (whether greenfield or M&A) is made.”

WAVTEQ, A Framework for Investment Promotion: “Many agencies in Europe, especially at the regional level, are now spending as much resources on supporting expansions as on attracting new investment … Oregon in the United States focuses exclusively on aftercare with existing investors as the primary mechanism to generate new investment.”

Development of a Complete FDI Strategy and Plan

To develop a strategy and plan for FDI, start by reviewing the preceding sections: assessing your region to identify assets that matter to FDI, developing an effective value proposition, targeting foreign investors, and developing a plan for M&A. These become core elements of your strategic plan for FDI.

The approach outlined in this toolkit is focused around regional strengths and assets, including existing foreign relationships and connections that your region has already developed. A value proposition and strategy for targeting specific types of investors in specific countries is based on these regional  assets and strengths.

The plan should incorporate or consider the following components. This list started with Brookings’ approach (per the Brookings–FDI Planning Guide — A blueprint for metro teams pursuing global economic engagement, p. 10), but is adapted and augmented based on research from the IERC project (IERC Final Report p. 44-46):

FDI Plan Outline

  • Rationale for why international engagement is important to the economic success of the region.
  • Comprehensive regional and market assessment, including:
    • An assessment of regional performance in FDI attraction, and an inventory of existing foreign-owned firms
    • A profile of the regional base of companies and key sectors, clusters, major companies, and institutions
    • An assessment of general business attraction factors and assets, such as factor costs, labor availability, transportation infrastructure, etc.
    • An assessment of a region’s strengths and weaknesses with respect to FDI attraction, based on the assessment of the region and general business attraction factors: cluster and sector strengths, foreign relationship assets, strengths and weaknesses in transportation infrastructure, labor availability and rate, etc.
  • Important strategic goals or overarching objectives for the region
  • Key strategic elements and opportunities, including:
    • Value proposition and brand identity for the region
    • Country targets to be the focus or priority for FDI attraction efforts
    • A strategy for attraction and support of FDI through M&A
  • A set of more specific goals, strategies, and actions/tactics that flow from above
    • With milestones and metrics to track implementation of these actions


In this approach, a SWOT analysis (strengths/weaknesses/opportunities/threats) for FDI would be recast as follows:

SWOT Analysis for FDI Strategy

  • Strengths – core to FDI strategy, and may include examples such as strong, regional clusters or sectors; a large base of existing foreign-owned firms; foreign relationships or connections with specific foreign countries; strong transport infrastructure; low factor input costs (e.g., labor rates, energy, taxes); a skilled and available workforce; the existence of support services, such as training or rapid start-up programs; or the availability of sites that meet the needs of particular investors (e.g., large capacity sites.)
  • Weaknesses – inferior assets relative to competing regions in the above areas, which can be improved through investment or effort — if it improves the region’s value proposition to foreign (or domestic) investors. Examples might include poor transportation infrastructure or high labor or energy cost.
  • Opportunities – potential investors that value your region’s strengths, value proposition, and foreign relationship assets
  • Threats – factors that may negatively impact your region’s assets, value proposition, or base of existing foreign companies, such as the risk of a foreign enterprise moving its operations out of your region

The other elements of a strategic plan for FDI — more specific goals, strategies, and action items required to achieve those overarching objectives, and the milestones and metrics to track implementation of these actions — all emerge from the strengths-based value proposition and target opportunities described above. The best way to demonstrate how all of these elements are integrated into an overall strategy and plan is by example:


IERC Final Report: “International Engagement Ready Communities: Effective Practices & Determinants of Foreign Direct Investment & Export Success, Final Report”

Brookings GCI

WAVTEQ: International FDI consulting and technology firm advising companies on site selection and economic development organizations on how to attract FDI.