A New Generation in Strategy Consulting1© 2013, Investment Consulting Associates

Real estate is a strategic asset. Each and every new location decision carries cost, workforce, and other implications. We provide our clients with the insight needed to quickly build solutions which are flexible enough to evolve with the company’s changing needs.

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ICAincentives.com

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United States and North America

A New Generation in Strategy Consulting2© 2013, Investment Consulting Associates

INCENTIVES AS A MAJOR FACTOR??

The front page of the Sunday, December 2, 2012, edition of The New York Times featured an analysis of US incentive deals based upon Investment Consulting Associates (ICA)’s online incentive tracking tool and database, ICAincentives.com.

While examining incentive trends across the 50 states, the article “As Companies Seek Tax Deals, Governments Pay High Price” notes that many state programs do not identify specific corporate beneficiaries, nor do they measure explicit return on investment.

New York Times Analysis on Incentive Trends

A New Generation in Strategy Consulting3© 2013, Investment Consulting Associates

ROLE OF INCENTIVES

Investment Incentives are part of a broader strategy that encourages overall economic development in your targeted sectors. They are given:

– Because there supposed to be benefits from giving them

– Because a country or city believes that it must offer incentives to compete with rival countries for FDI

– Because potential investors “expect” to be provided with some form of incentive.

By observing the incentives given by governments to corporates, priority sectors can be identified and competition for investments intensified

A New Generation in Strategy Consulting4© 2013, Investment Consulting Associates

GLOBALIZATION RESULTING IN RE-SHORING?

Competitive and low risk investment climate, with relatively stable wage inflation, increased productivity levels and a skilled labor pool in North America compared to rapid rising labor costs and seemingly overheating economies in South East Asia are shifting the global landscape of FDI

The increased productivity in combination with the strong competitive environment plays a big role in the current “reshoring” movement

A Reuters/MFG.com survey among US companies:– 15% have repatriated production back into the US in the past 2 years– 40% of North American manufacturers with off-shored production are

investigating bringing that work back within the next year.

A New Generation in Strategy Consulting5© 2013, Investment Consulting Associates

Developing markets are becoming developed

Emerging consumer markets creating “hot spots” for demand and market impacts as a consequence

Transportation and energy becoming highly relevant to the sourcing and production of goods

Direct access and cultural awareness also resulting in some pressure to re-regionalize

WORLD IS NOT EXACTLY FLAT…

A New Generation in Strategy Consulting6© 2013, Investment Consulting Associates

National borders becoming increasingly irrelevant

Need to compete as others do

…BUT NEITHER IS IT BACK TO THE WAY IT WAS