Private sector investment is vital to grow urban economies, so cities across the UK need to be constantly looking to improve their attractiveness to investors.
Attracting investment requires both strong characteristics and awareness of these by investors. Having investible sites is obviously crucial, but it is not enough to secure investment. Relationships are key too. The city’s reputation amongst investors and their level of familiarity with its opportunities also drive investment location decisions. The higher its profile and better its reputation the more likely its investment opportunities will be considered.
Given this, cities should focus on:
- Using expert resources
Cities should ensure they have acces to investment expertise. A strong understanding of how investors think and behave is essential when designing an approach to attract investment. Collaboration with neighbouring areas or like-minded cities should always be considered, as for many activities it can be more effective to work at a larger geographical scale.
- Knowing the city’s offer and audience
Since reputation affects investment decisions, cities need to know how they are viewed. They should focus on selling their strengths, making sure the industry is aware of the city’s comparative advantages. Having a vision, and plan to realise it, provides investors with certainty and demonstrates the city prioritises investment and growth.
- Building networks to sell the city
Reach out to investors, developing relationships with them and their advisors. Events and specialised press features are useful tools to raise the city’s profile. Cities should target those who have already invested in the city, updating them with information on further investment opportunities. Ensure investors have access to the city’s leadership, and use the private sector as the key promoters of the city.
- Closing the deal
When investments are not quite viable, or threatened by unforeseen circumstances, cities may need to be pro-active and step in by reducing risks or improving returns. This must be done carefully – too much public sector involvement sends a negative signal to investors, so cities must seek private-led solutions wherever possible.