FDI can present companies with great opportunities, but can alsobring risks. While a location may seem popular or have potential, it isdifficult for a firm to acquire all the knowledge necessary to make theirinvestment a success. Lack of expertise or insufficient resources to carryout a full scale assessment of the area can lead to missed opportunitiesand failed ventures. However, there is a service that helps companies tofind a location that matches their needs and provides an opportunityfor growth. Founded in 2008, Global Arena provides business locationsand potential investors an online platform where they can find eachother and offers all the information necessary for making an informedand strategic decision.

The company is the brainchild of Peter Storm, who developed a sci-entific model for determining good location for FDI while working forHP, “there are many issues confronting an executive management teamwhen they look at their location footprint,” he says, “firstly there is the

Lets get digital

Global Arena offers businesses, countries and cities throughout

the world the chance to meet and form strategic, long lasting investment bonds.

Jane Bordenave talks to the company’s founder and CEO Peter Storm

danger of missing a competitor entering a market you had not consid-ered and creating a competitive advantage over your business. Thereis also the problem of not knowing about risk in terms of trends andforecasting – where is the market likely to be in three to five years time?Will it still be possible to successfully do business there?” When tryingto answer these questions, there are various obstacles standing in theway; companies rarely have the data, manpower and financial meansto take a holistic view of the market as it stands now, how it is likelyto evolve and how compatible it is with the business. The bits of dataavailable may also be unwieldy and unintegrated, and in an attempt toovercome these problems, a dependency on consultants may develop,which is often expensive and can be inadequate.

It was these factors that pushed HP to move Storm from its consul-tancy department into helping to choose successful locations for invest-ment in Europe, the Middle East and Africa. “Site selection in these

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Technology

areas is a significantly more complex process to what the company wasused to in the Americas,” explains Storm, “the firm had experiencedsome disappointing project outcomes previously here, so moved respon-sibility for investment in these markets to the European HQ in Zurich.”HP worked with the University of Ghent in Belgium to develop an al-gorithm that would determine the international allocation of workforceand capital. This system analysed external factors, such as economic,geopolitical stability and market forces in a coun-try, and combined them with internal data to pro-vide the company with a clear picture of where was best to invest.

The algorithm was very successful, and soon attracted the attention of other technology compa-nies. However, as good as the system was, it didn’t complement the HP prod-uct portfolio, so in 2008 Storm arranged with HP to take the intellec-tual property with him to form a new company, Global Arena.

globalisation

“Our vision is to create a marketplace that helps to increase the com-petitiveness of countries, economies and locations, but that also helpsto increase the transparency of the foreign direct investment market,”says Storm, “at the same time, we also wanted to create a platform thatwould help encourage fairness in globalisation, giving undeveloped anddeveloping countries the chance to get as much positive exposure aspossible.” One of the ways that the company is helping to ensure it ful-fils this aim is to start working with the United Nations Conference onTrade and Development (UNCTAD) to create a free platform for thesestates to promote themselves and integrate into the global economy.

One of the things that Storm considers of utmost importance for FDIand for his own business is the internet, “we are a web-based compa-ny ourselves, and we work like some of the best online entities such asGoogle or eBay, in that we use intelligent matching technology to findthe answers to a customer’s search criteria,” says Storm, “globalisationhas caused an explosion of opportunities, which are available not just tolarge multinationals but also to SMEs. However these opportunities needrefining, we don’t want to be like some giant virtual yellow pages, mak-ing businesses flip through thousands of irrelevant entries to find the onethey want. We want to deliver optimal solutions directly and efficiently.”The company’s database currently holds 500 locations over 40 countries,but is engaged with Credit Suisse to rapidly accelerate growth to onehundred times the number of resource allocation opportunities.

africa holds opportunity

According to Storm, Africa holds strong opportunities for attractivemarkets and talent supply, although investment there isn’t entirelystraightforward either. The skills shortage that is present even in coun-tries that are higher up the development scale, such as South Africa, canpresent a problem.

the future of FDI is about talent

While companies’ FDI drives may have slowed or stopped during therecession, Storm is convinced that as the world begins to pull out ofthis crisis talent will become the major determining factor as to wherecompanies choose to invest. However, talent supply can be a problem forcompanies, even in their home countries, “almost all Western economiesare struggling with demographics. The population is aging as people livelonger and fewer children are born and the situation as it stands is onlygoing to get worse over the next ten to twenty years,” explains Storm,“Businesses are increasingly having to import their top talent from theglobal arena. Even China will begin to have this problem over the sametime period due to the one child policy and its rate of growth.” With

this in mind, FDI in non-traditional countries, ie not China or India, isincreasingly appealing to companies, and increasingly important.

search versus create talent

However, increasingly companies are looking not for an existing talentpool, but for an environment where they can create a fully integratedtalent ecosystem, “I recently spoke to both Nokia and General Electric

at a conference event, and both told me thatthe potential to create a sustainable supply oftalent for their companies was what they arelooking for when choosing a business loca-tion,” says Storm. In order to do this, busi-nesses are at first bringing in some of theirown skilled and experienced workers whilethey train up local people through on the jobskills acquisition and post-graduate develop-ment programmes for students in the area,“this is one of two major shifts in attitude,the other being the importance of Corporateand Social Responsibility. Right up to themillennium the top and indeed only factor

for consideration when looking at where to invest was cost. Now thereare other factors that top that.”

CSR and Green – sustainable business are of increasing importanceto all companies. When looking for a strategic matching for FDI, com-panies want to engage in business in a way that will communicate thesustainability and responsibility values they want their brands associatedwith, “Currently, we only have social and political sustainability as acriteria on our website in this area, but as there is such increased interestin this area, we are looking to expand it,” says Storm, “we are lookingto include many other factors such as the target country’s performance ofthings such as carbon emissions and the work/life balance of the people– things that are increasingly important to companies and to talent.”

Another change that Global Arena is seeing is in terms of what compa-nies are seeking to achieve once they have established a presence in a newmarket, “previously large multinationals would look at these countriesas an opportunity to establish their existing products in new markets.What we see now is that they are looking to develop new products thatare tailored to these markets,” explains Storm, “businesses are adaptingthemselves to local customs and, importantly, local buying power. It is amodel that Nestlé and Phillips have been using very successfully for sometime now, but that others are seeking to follow.”

identifying solutions

So what does Storm consider to be the most important factors todayfor successful foreign direct investment, and how can Global-Arena.com help companies to achieve this? “In the past, companies would ap-proach a government agency, buy some land or a building and set up acall centre or production facility, but for the most successful companiesthis is not the case. FDI strategies need to be focussed around foster-ing an environment of entrepreneurship, innovation and supportingknowledge transfer amongst young talented people. For example, manybiotech, nanotech and other high tech industries are following smallcompanies in the area they are intending to invest in. They snap up theones that are producing unique products and patents, integrating theminto their own portfolio and creating a presence in the country at thesame time. Such an approach, as well as being good for the business,acts as a catalyst for development and strengthening the local economy.At Global-Arena.com we can help companies identify the best area forthem without their first having to establish a pied-à-terre there to see ifit is suitable. Our online presence means our total capabilities are avail-able to anyone anywhere, bringing locations and businesses together.”

Global Arena is a company that enables all parties to maximise thebenefits of globalisation through the internet. It helps businesses tonavigate the global business location marketplace, avoiding the pitfallsthat can hinder or completely put paid to ventures abroad. It is aninvaluable tool and one that, like FDI itself, is only bound to grow inimportance and prosperity.

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