1. Facilitating FDI into Europe and Central Asia Working through consulting firms

2. © PA Knowledge Limited 2013. Page 2 Facilitating FDI into Europe and Central Asia Presentation Overview 1.Introduction 2.The need to invest 3.Investment Operations and Consulting companies

3. Facilitating FDI into Europe and Central Asia Who we are ?

4. © PA Knowledge Limited 2013. Page 4 Facilitating FDI into Europe and Central Asia Introduction to PA

5. Facilitating FDI into Europe and Central Asia The need to invest

6. © PA Knowledge Limited 2013. Page 6 Facilitating FDI into Europe and Central Asia Why do companies invest “ PULL” FACTORS New markets Competitive advantages Cost factors Technology access Trade barriers Access to customers Contracts Skills STRATEGIC CHOICES 1.Expansion 2.Consolidation 3.Restructuring 4.Growth ambitions “ PUSH” FACTORS High base costs Taxation Labour market constraints Exchange rate stability Mergers&Acquisitions Customer driven Motives Intellectual property Access to supply chains Access to technology HOME ECONOMY HOST ECONOMY COMPANY

7. © PA Knowledge Limited 2013. Page 7 Facilitating FDI into Europe and Central Asia Modes of market entry 7 Once a company has decided to expand its international footprint it has a range of investment options Type of entry to a foreign marketCharacteristics ExportingHigh costs, low risk LicensingLow cost, low risk, little control, low returns Strategic alliances / Joint venturesShared costs, shared risks, shared resources, problems of integration AcquisitionHigh costs, quick access to the market, complex negotiation process, advantages of economies of scale, problems of merging with domestic operations Expansion of existing operationAdvantages of economies of scale, low risks, relatively low costs, rapid expansion possible Expanding to new markets or new clientsNeed to alter geographical footprint to support new markets or new clients Company expansionNew technologies, new ideas, innovations, etc

8. Facilitating FDI into Europe and Central Asia Investment operations, consulting companies and implications

9. © PA Knowledge Limited 2013. Page 9 Facilitating FDI into Europe and Central Asia Key elements of investment promotion Three areas of investment promotionKey elements Strategy and OrganisationNational policy context IPA objectives Structure of investment promotion Investment Generation Competitive positioning Branding Market analysis Company targeting Facilitation/Investor servicing One-stop-shop Project handling Product development Account management Monitoring and evaluation

10. © PA Knowledge Limited 2013. Page 10 Facilitating FDI into Europe and Central Asia Strategic Framework for investment promotion

11. © PA Knowledge Limited 2013. Page 11 Facilitating FDI into Europe and Central Asia Best practice model in co-operation Best practice from consulting companies  Client segmentation  Client centricity  Differentiated service offer  Key account management  Ownership of targets and activity metrics  Access to sector expertise  Understanding of supply chains and supply chain costing  CRM tools  Sector Expertise  Innovation and Training  Market and Sector intelligence Best practice from IPA  Partnerships with private sector  Access to government  Longer term Return on Investment  Incentives  Influence on product development  Marketing of clusters  Location benchmarks  Overseas Offices  Property Infrastructure

12. © PA Knowledge Limited 2013. Page 12 Facilitating FDI into Europe and Central Asia New blended models of operation Policy Joined up Government National Strategy Single focus/dedication Scale and impact Industry knowledge Technical skills Business experience Desire to succeed Independent Balanced Business Skills += IPA Consulting BlendedTeam Customer OwnershipEfficiency and Flexibility Targets and Goals

13. © PA Knowledge Limited 2013. Page 13 Facilitating FDI into Europe and Central Asia Example: Collective targeting versus FDI promotion

14. © PA Knowledge Limited 2013. Page 14 Facilitating FDI into Europe and Central Asia Example: Collective sector based targeting IPAs have been moving towards a sector-based targeted investment strategy that allows for better prioritisation of limited resources and typically yields better results. Sector targeting should identify sectors in which the host economy is best placed to attract investment. FDI opportunity – sectors with the best potential for mobile FDI projects. Competitive position – the strength of a location compared to competing locations for the sector. Degree to which the sector meets FDI objectives – extent to which target sectors can deliver FDI strategy objectives in terms of job creation, quality of skills, integration in the indigenous cluster, etc.

15. © PA Knowledge Limited 2013. Page 15 Facilitating FDI into Europe and Central Asia