Every economic transformation requires targeted investments, and industrial development is no different. So what’s the best way to attract investors? To answer this, we need to answer a few other questions first: What are the current conditions in the country? What are the options for compensating for the disadvantages? And what are the trade-offs?

As a starting point, Kearney’s Foreign Direct Investment (FDI) Confidence Index® outlines the main factors that attract investors to a new market. The FDI Confidence Index ranks countries based on their relative strength in areas that influence investment decisions, including government incentives, transparency and efficiency of regulations, technological and innovation capabilities such as those enabled by the Fourth Industrial Revolution (4IR), tax load, physical and digital infrastructure, labor quality and conditions, among other factors.

We help our clients in all of these areas, turning national economic priorities into tangible strategies for industrial development. When it comes to industrial investments, we identify the potential opportunities for localization, reshoring, or exporting, and we craft a business case and a suitable go-to-market approach.

Our industry experts are equipped to spot real opportunities beyond supply–demand market reports, avoiding forecasts that are inaccurate or too short-range, overly narrow product specifications, or simple lack of awareness of suppliers’ capabilities. Generally, the resulting long list has to be prioritized to build a product portfolio that considers the strategic value of the opportunities: acquiring new technologies and know-how to achieve greater economic complexity.

Then, we examine a range of qualitative and quantitative measures to build an initial business case. Benchmarks of revenues and costs are adjusted according to the country’s economic competitiveness, including the labor market, supply of energy, or acquisition of industrial property, among many other factors.

When government incentives are likely to be required to attract investment, we assess which ones will best match state and investor interests—from long-term contracts, local content policies, and tax breaks to customs exemptions, grants, and other funding mechanisms. Comparing the incentive’s impact with the cost incurred by the government should reveal common ground for both sides to plan and agree on coordinated investment efforts.

Finally, bringing it all to life rests on targeted promotion, next-level stakeholder management, and ongoing monitoring and adjustment. This is where we bring our private-sector experience into play. On one hand, we help investors turn the business case into a real-world value proposition. On the other hand, we help governments transfer their partners’ know-how and capabilities. In summary, we help all stakeholders reach their goals and work together effectively.