Why talent, connectivity, energy, business ecosystems, institutional quality and quality of life now define territorial competitiveness.
For decades, investment promotion was often reduced to a familiar formula: identify a company, present a location, offer an incentive and hope the project lands.
That formula is no longer sufficient.
Global investors are operating in a more volatile, competitive and demanding environment. Supply chains are being redesigned, energy costs remain strategically important, digital infrastructure has become a productive asset, regulation is under greater scrutiny and companies are expected to demonstrate measurable contributions to sustainability, inclusion and resilience.
As a result, investors are not simply comparing tax rates or industrial land prices. They are assessing whether a territory can help them recruit people, reach markets, manage risk, access reliable infrastructure, innovate with local partners and build a credible long-term presence.
The question is no longer merely, “What does this territory offer?” The more relevant question is: “Can this territory improve the performance, resilience and future competitiveness of our business?”
This distinction matters greatly for investment promotion professionals. A territory is not attractive because it has a long list of assets. It is attractive when those assets are connected, credible and relevant to a specific investment decision.
The World Bank identifies market opportunity as one of the most powerful drivers of foreign direct investment, while also emphasising the importance of strong institutions and investor-friendly regulation. Investment motives may include access to markets, resources, efficiency advantages or strategic assets such as technology, brands and distribution channels. (World Bank)
A successful investment promotion strategy must therefore move beyond generic promotion. It must translate territorial characteristics into business value. Six dimensions are particularly decisive:
- Talent
- Accessibility
- Energy
- The business ecosystem
- Institutional quality
- Quality of life
These dimensions are interconnected. A territory may have excellent transport infrastructure but struggle to attract talent. It may have a skilled workforce but unreliable energy. It may offer a competitive cost base but lack institutional capacity. The most competitive territories are those that combine these factors into a coherent value proposition.
Investors are no longer asking what a territory offers. They are asking whether it can improve the performance, resilience and future competitiveness of their business.
01. Talent: the first condition of growth.
Capital can cross borders quickly. Talent is less mobile, more selective and increasingly decisive.
For many investors, the availability of qualified people is no longer a secondary consideration to be addressed after the location has been chosen. It is one of the first questions asked during the site-selection process:
- Can we recruit the people we need?
- Can we retain them?
- Are the required technical and managerial skills available locally?
- Can the education and training system adapt to our needs?
- Will international employees and their families be able to settle successfully?
These questions apply across sectors. Advanced manufacturing requires technicians, engineers and maintenance specialists. Digital businesses need software developers, data scientists, cybersecurity professionals and project managers. Renewable-energy projects require engineers, electricians, construction specialists and regulatory expertise. Health, logistics, food, mobility and creative industries all depend on specialised human capital.
The traditional approach to talent focused mainly on labour costs. That approach is increasingly inadequate. Investors are evaluating the full relationship between skills, productivity, adaptability and labour-market risk.
A lower wage level may attract a cost-sensitive project, but insufficient productivity, high turnover or limited managerial capacity can rapidly eliminate the apparent advantage. Conversely, a territory with higher labour costs may remain competitive if its workforce produces greater value, adopts technology rapidly and operates within a reliable innovation ecosystem.
The most attractive territories offer three layers of talent.
Available talent. This is the workforce that companies can recruit immediately. A territory should be able to provide investors with evidence rather than broad claims. Useful indicators include:
- Employment and unemployment rates by qualification
- Graduates by discipline
- Technical and vocational training capacity
- Participation in lifelong learning
- Wage levels by occupation
- Recruitment time for priority profiles
- Commuting patterns and functional labour-market reach
The relevant geographical unit is rarely the municipality alone. Investors think in terms of labour-market areas. A location with a modest resident population may still be highly competitive if it can access a wider metropolitan or regional workforce through efficient transport.
Adaptable talent. The second layer concerns the ability of people and institutions to adapt. Technologies, production methods and business models change rapidly, so investors need workers who can learn, retrain and move between related activities. This is especially important in regions seeking to attract advanced manufacturing, digital services, green technologies and circular-economy activities. Investment promotion agencies should map not only existing skills, but also the institutions capable of producing future skills — universities, polytechnic institutes, vocational schools, technology centres and employer-led training programmes.
The question is not only, “How many engineers graduate every year?” It is also, “How quickly can the territory prepare the specific profiles required by this project?”
Retained talent. Recruitment is only half the challenge. Retention increasingly determines whether an investment can scale. A company may establish a production unit with an initial workforce, but expansion depends on the territory’s ability to keep skilled employees over time — affected by career opportunities, housing, education, healthcare, cultural life and international connectivity. This is where talent policy and quality of life meet.
A strong talent proposition might include a quantified labour-market profile, an analysis of priority occupations, named education and training partners, a plan for customised workforce development, evidence of successful employer–education collaboration, support for international recruitment, and information on housing, schools, healthcare and integration.
The best territories do not simply say, “We have qualified people.” They demonstrate how an investor can build, renew and retain its workforce.
Talent should be presented as a system, not a statistic — a pipeline the territory can build, renew and retain, not a headline number.
02. Accessibility: more than a road or an airport.
Accessibility is often presented as a question of distance. In reality, investors are interested in reach. How easily can the company access customers, suppliers, employees, ports, airports, research centres and decision-makers? How reliable are these connections?
A location may be geographically close to a major market but operationally distant if congestion, limited frequencies, border delays or poor last-mile connections increase uncertainty. Conversely, a peripheral territory can compete successfully when it is efficiently connected to national and international networks. Accessibility has at least four dimensions.
Physical connectivity. Road, rail, port and airport infrastructure remain fundamental, particularly for manufacturing, logistics, tourism, agrifood and export-oriented activities. Investors are interested in service quality, not simply infrastructure presence: travel time to major markets, freight reliability, port and airport frequencies, intermodal connections, congestion levels, border and customs efficiency, and access to industrial and commercial sites.
Digital connectivity. Digital infrastructure is now part of the basic productive infrastructure of a territory. Broadband quality, mobile coverage, data-centre capacity, cybersecurity, cloud access and digital public services influence both operational efficiency and investment risk. UNCTAD’s recent analysis highlights the importance of electricity access, regulatory quality, connectivity and digital skills in attracting greenfield investment in the digital economy. (UNCTAD)
This has implications beyond the technology sector. A modern factory requires reliable data flows and secure digital systems. A logistics company needs real-time tracking. A financial-services business requires resilient connectivity and data security. Investment promotion agencies should include digital connectivity in every location profile: broadband speeds and coverage, 5G availability, data-centre and cloud access, network redundancy, cybersecurity capabilities and digital adoption among local firms.
Functional accessibility. Investors also assess how easily they can interact with the institutions and networks that support their project. A territory may have excellent physical infrastructure but poor functional accessibility if public and private actors do not coordinate. This is why the investment promotion agency should act as an integrator, reducing friction between the investor and the territorial system.
Market accessibility. Finally, investors evaluate access to customers and business markets — local, national, European or global. This is influenced by population and purchasing power, proximity to major business centres, trade agreements, regional value chains, export infrastructure and language and cultural proximity. For many investors, the relevant location is not an isolated municipality but a platform from which several markets can be served.
The strongest territorial narrative therefore connects place to reach. It explains not only where the territory is, but what the investor can reach from there, in how much time and with what level of reliability.
A territorial narrative should explain not only where a place is, but what an investor can reach from there — and how reliably.
03. Energy: reliability, cost and transition readiness.
Energy has moved from an operating-cost issue to a strategic investment factor. For energy-intensive industries, the price and availability of electricity can determine whether a project is financially viable. For all companies, reliability matters because interruptions generate production losses, damage equipment and undermine customer commitments.
Investors increasingly ask three separate questions: Is energy available? Is it affordable and predictable? Is it compatible with the company’s decarbonisation strategy? A territory that can answer only the first question is no longer sufficiently competitive.
Reliability before promises. Energy reliability is fundamental for manufacturing, data centres, cold storage, healthcare and research facilities. Investors need clear information about grid capacity, connection timelines, redundancy and the process for securing additional power. Vague statements such as “there is strong energy potential” are not enough — investors require technical evidence on grid capacity, connection lead times, historical interruption data, backup options and industrial-scale renewable-energy availability.
Cost predictability. Investors do not necessarily require the lowest energy price. They require a cost structure that can be modelled. Price volatility affects investment decisions, particularly for projects with long payback periods. Territories can become more attractive when they offer long-term contracts, renewable power purchase agreements, energy-efficiency programmes and demand-management mechanisms. The issue is not simply the tariff — it is the total energy risk over the lifetime of the investment.
Decarbonisation capacity. Companies face pressure from customers, regulators and shareholders to reduce emissions, and are assessing whether a territory can support low-carbon production: renewable electricity, biomethane or renewable gases, green hydrogen where relevant, industrial heat recovery, storage and electrification. UNCTAD reported that investment in energy and gas supply declined sharply in 2024, reflecting the difficulty of financing large infrastructure projects amid tighter financial conditions and regulatory uncertainty. (UNCTAD) The lesson for territories is not to abandon energy ambitions, but to improve project readiness — a clear pipeline, bankable conditions, permitting clarity and credible grid planning.
Energy as an ecosystem asset. A territory with renewable generation, grid capacity, technical expertise and industrial demand may attract companies involved in energy equipment, storage, efficiency and grid management. The most compelling message is not “we have renewable energy.” It is: “We can help your company secure reliable, competitive and progressively decarbonised energy, while connecting you to the technologies and partners needed for the transition.”
Investors don’t need the lowest energy price. They need a cost structure — and a decarbonisation path — they can actually model.
04. The business ecosystem: investors need more than a site.
An investor does not operate in a vacuum. Even a large multinational depends on suppliers, service providers, customers, research institutions, logistics operators, financial partners, public authorities and talent networks. This is why the quality of the local business ecosystem often matters more than the availability of a single site. A site can be prepared. An ecosystem takes years to build.
Supplier depth. Investors evaluate whether a territory contains companies capable of supplying products and services at the required quality, cost and scale — component manufacturers, maintenance and engineering firms, logistics operators, legal and accounting services, testing and certification bodies, and digital and cybersecurity providers. The presence of suppliers reduces operating risk and can shorten the time required to launch a project. However, the existence of many companies is not enough: agencies should assess supplier capability in terms of standards, export experience, financial stability and technological maturity.
Innovation and knowledge networks. Companies increasingly locate near knowledge assets — universities, technology centres, laboratories, incubators and applied-research organisations. The relevant question is not simply whether a university exists, but whether the investor can collaborate with it: research groups aligned with target sectors, technology-transfer mechanisms, industrial PhD programmes, testing and prototyping facilities, and entrepreneurship networks.
SME linkages. Foreign investment can generate substantial benefits for the local economy, but those benefits do not arise automatically. The OECD highlights the importance of strengthening linkages between multinational enterprises and domestic SMEs in order to increase knowledge and technology benefits for local economies. (OECD) Agencies should prepare local companies before the investment arrives — supplier-readiness programmes, quality certification, digitalisation, export preparation and matchmaking with multinational companies. Aftercare should deepen local linkages, not only retain the investor.
Sector concentration and strategic fit. A region with a strong automotive base may be attractive to mobility and advanced-materials companies. A territory with food-processing expertise may be well positioned for agrifood technology and biotechnology. This does not mean territories should promote themselves to every possible sector — a focused proposition is more credible than an undifferentiated one.
A site can be prepared in months. A business ecosystem — suppliers, research partners, SME linkages — takes years to build.
05. Institutional quality: the invisible infrastructure.
Investors often speak about land, labour and infrastructure. Yet institutional quality may be the factor that determines whether a project proceeds, is delayed or is abandoned. Institutional quality means more than political stability — it includes the predictability, competence, transparency and coordination of the public administration.
Investors want to know: are the rules clear? Are permits processed within predictable timeframes? Can decisions be challenged fairly? Are public authorities coordinated? This matters most for projects involving complex permitting, environmental assessment, infrastructure connections or multiple levels of government.
Predictability. Investors can manage many forms of risk if they can identify and price them. What they struggle to manage is uncertainty that is opaque, discretionary or constantly changing. A territory builds predictability by offering clear investment procedures, transparent eligibility criteria, named institutional contacts, realistic timelines and coordinated permitting.
Administrative speed. Time has a financial value. Delays in land acquisition, licensing, grid connection or construction can increase financing costs and postpone revenues. An efficient investment promotion agency should create a project-management structure involving the relevant authorities — a dedicated case manager, a single information channel, a permitting timetable. The objective is not to weaken regulation, but to make it understandable and navigable.
Integrity and trust. Corruption, informal decision-making and unequal access to public authorities increase risk and undermine competitiveness. A territory may offer generous incentives, but these will not compensate for weak governance if the investor believes agreements may not be honoured. The World Bank notes that sound institutions and investor-friendly regulations influence not only the attraction of FDI, but also its contribution to development. (World Bank)
The agency as a trusted intermediary. For international investors, the investment promotion agency is often the first practical expression of a territory’s institutional quality. Its professionalism is judged through small details: does it respond quickly, understand the investor’s business model, and remain involved after the investment decision? A competent agency reduces information asymmetry — transforming institutional competence into investor confidence.
Uncertainty has a financial cost. Investors don’t need fewer rules — they need rules that are clear, proportionate and consistently applied.
06. Quality of life: a business competitiveness factor.
Quality of life was once treated as a soft factor, relevant mainly to tourism or residential attractiveness. That distinction is now obsolete. In a knowledge-based, talent-dependent economy, quality of life directly affects recruitment, retention, productivity and corporate reputation. Companies increasingly locate where their employees want to live.
This is particularly true for investments requiring specialised professionals, international managers, researchers and mobile technical staff. A company may find a suitable industrial site, but if employees cannot access housing, schools, healthcare, culture or mobility, recruitment becomes more difficult and costly.
The employee perspective. Investors assess quality of life through the experience of current and future employees: housing availability and affordability, education and international schooling, healthcare access, public safety, public transport, cultural opportunities, environmental quality and social integration. Territories that can support relocation are better positioned to compete for higher-value investments.
Sustainability and liveability. Quality of life is closely connected to environmental performance. Clean air, access to green spaces, climate resilience and efficient mobility increasingly influence how people evaluate a location — particularly for younger professionals and internationally mobile talent, who compare locations not only by salary but by lifestyle and values.
The danger of superficial branding. Quality of life should not be reduced to attractive images or promotional slogans. Investors and employees can quickly detect whether the message corresponds to lived reality. A credible proposition combines narrative with evidence — housing costs compared with wages, commuting times, school availability, healthcare capacity and environmental indicators. The investment promotion professional should be able to explain how the territory works as a place to live, not simply how it looks in a brochure.
Companies increasingly locate where their employees want to live. Investors and employees can tell quickly when the brochure doesn’t match the lived reality.
The six factors are interdependent.
The six dimensions should not be treated as separate chapters in a promotional catalogue. Their value comes from their interaction. Talent requires accessibility and quality of life. Digital industries require energy, connectivity and skills. Manufacturing depends on suppliers, logistics and institutional coordination. Green investment requires energy infrastructure, regulatory predictability, technical capabilities and access to finance.
Consider a hypothetical advanced-manufacturing project. The company needs technicians and engineers, reliable electricity, access to suppliers, fast connections to customers, a permitting process with clear deadlines, housing and schools for key employees, and partners for research and workforce training. No single territorial asset will secure the investment. The decision will depend on whether the territory can offer an integrated operating environment — a platform of capabilities, not a list of assets.
From promotion to investment readiness.
A strong territorial proposition begins with evidence. Investment promotion agencies should develop sector-specific intelligence covering target investor profiles, investment motives, competitor territories, labour-market conditions, infrastructure capacity, supplier ecosystems, institutional procedures and quality-of-life indicators. Generic rankings are useful for context, but they rarely answer the practical questions involved in a real project.
A territory should be able to produce a clear investment-readiness package: a concise sector proposition, a verified site or building portfolio, workforce and skills evidence, utility and energy information, access and logistics data, supplier and partner mapping, permitting and incentive guidance, an implementation timetable, aftercare support and measurable sustainability indicators. The purpose is not to overwhelm investors with data — it is to reduce uncertainty at each stage of the decision.
What investment promotion professionals should measure.
Attraction activity should not be evaluated only through the number of leads, visits or announced projects. The quality of the investment matters. The OECD’s FDI Qualities Initiative focuses on four broad areas — productivity and innovation, job quality and skills, gender equality and the low-carbon transition — providing indicators and policy tools to assess how investment contributes to sustainable development. (OECD)
Useful performance indicators include: conversion rate from qualified lead to project, time to provide a complete location proposal, time for permitting and utility connection, jobs created by qualification level, training commitments, local procurement, SME supplier linkages, R&D partnerships, energy intensity and emissions, and retention and expansion of existing investors. The relevant question is not simply, “How much investment did we attract?” It is: “What capabilities, opportunities and long-term value did the investment create in the territory?”
The new competitive advantage: credibility.
Many territories can claim talent, infrastructure, sustainability and connectivity. Fewer can substantiate those claims with current data, named partners, realistic timelines and a clear implementation pathway. Credibility has become a competitive advantage. Investors appreciate ambition, but they make decisions based on evidence — and a territory that acknowledges a limitation and presents a credible mitigation plan may be more attractive than one that makes exaggerated promises.
This requires a more mature style of investment promotion: less advertising, more intelligence; less generic messaging, more sector specialisation; less emphasis on incentives, more attention to productivity; less focus on announcements, more focus on delivery; less promotion of isolated assets, more demonstration of integrated capability.
Conclusion: investors choose operating environments.
Global investors do not choose territories because of one impressive asset. They choose operating environments in which people, infrastructure, institutions, energy and markets work together. They also evaluate institutional quality because uncertainty has a direct financial cost, and they consider quality of life because the competitiveness of a company increasingly depends on the attractiveness of the place where its employees live.
For investment promotion professionals, the strategic task is to make these connections visible. A territory’s value proposition should answer six practical questions: Can we find and retain the people we need? Can we move goods, people and data efficiently? Can we secure reliable and competitive energy? Can we connect with capable suppliers and knowledge partners? Can we operate within a predictable and competent institutional environment? Can our employees build a good life here?
The future of investment promotion will not belong to the territories with the loudest claims. It will belong to those that can demonstrate, with evidence and coordinated action, that they are ready to help global companies grow.
