Innovations in Foreign Direct Investment Attraction

INTRODUCTION

Attracting foreign direct investment (FDI) is an important pillar of economic devel-

opment policy, and most countries in the world have established national investment 

promotion agencies (IPAs) with the mandate to attract and grow FDI. Foreign direct 

investment contributes to economic development through its direct impact on in-

creasing capital investment, job creation, exports, foreign exchange, and tax revenues 

and through its indirect impact on local suppliers, technology transfer, productivity, 

innovation, and good governance. Investment promotion activities play a key role 

not only in attracting the initial FDI but also in enhancing the long terms benefits for 

the host country.

The technical note highlights investment promotion best practices and presents some 

of the most innovative and in many ways replicable investment promotion programs 

from around the world, which could fill the gaps in current investment promotion 

activities of IPAs in Latin America and the Caribbean (LAC). It outlines key imple-

mentation issues and serves as a practical policy guide for IPAs across the region to 

enhance their capability to attract FDI. 

The technical note begins with a brief overview of the concepts of investment pro-

motion and the main elements of best practice, before presenting six innovative ap-

proaches in investment promotion from outside of LAC that can be considered as 

best practices in their respective areas of activity. Each is followed by recommenda-

tions on how IPAs in LAC can incorporate the main aspects into their own invest-

ment promotion activities. A brief conclusion is presented at the end of the note. 

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