Bloom_Consulting_case study_Latvia
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The Latvian government commissioned Bloom Consulting to develop a country strategy to attract more strategic foreign direct investment (FDI). Latvia was receiving investment but it was based on low-value factors like low costs rather than differentiation. This strategy would not last as wages and quality of life increased. Bloom proposed identifying Latvia's unique attributes to promote abroad and strategic sectors for credibility. Research found Latvia was perceived positively for its education system. The resulting Polaris Process interconnected key Latvian stakeholders like universities and the investment agency to provide research and support to strategic investors. It aimed to structure FDI around high-value sectors and establish Latvia as an educated society to attract investment long-term.
Bloom_Consulting_case study_Latvia
- 1. Do you know who I am? How to differentiate and stand out from the crowd? Know how and why the Latvian Government commis- sioned Bloom Consulting to develop a Country Strategy to attract FDI and increase the country`s visibility abroad. Welcome to T1 Development of Countries Human Asset Management Business Strategy
- 2. The challenge Latvia's government identified the need to develop a project to increase strategic foreign direct investment. The country was attracting a substantial amount of greenfield investment, however those investments were based on low-value strategic variables, such as available workforce, low cost workforce, low Taxation, good infrastructure or location. These variables were not considered strategic as there was no differentiation from its neighboring countries, and more impor- tantly, as time and development progressed, quality of life would increase in the country and these variables would no longer be available for investors. Salaries would rise, there would be a high level of employment and so on.
- 3. The challenge Latvia's government identified the need to develop a project to increase strategic foreign direct investment. The country was attracting a substantial amount of greenfield investment, however those investments were based on low-value strategic variables, such as available workforce, low cost workforce, low Taxation, good infrastructure or location. These variables were not considered strategic as there was no differentiation from its neighboring countries, and more impor- tantly, as time and development progressed, quality of life would increase in the country and these variables would no longer be available for investors. Salaries would rise, there would be a high level of employment and so on. The approach Bloom proposed to open a project focused on 1 - Identifying unique variables of Latvia and how to "sell the country abroad” 2 - Identifying and justifying which are Latvia’s strategic sectors to bring credibility to investors Following our methodology, we researched what are the current perceptions in investors’ minds about Latvia, so we could understand what were Latvia’s unique selling propositions.
- 4. The challenge Latvia's government identified the need to develop a project to increase strategic foreign direct investment. The country was attracting a substantial amount of greenfield investment, however those investments were based on low-value strategic variables, such as available workforce, low cost workforce, low Taxation, good infrastructure or location. These variables were not considered strategic as there was no differentiation from its neighboring countries, and more impor- tantly, as time and development progressed, quality of life would increase in the country and these variables would no longer be available for investors. Salaries would rise, there would be a high level of employment and so on. The approach Bloom proposed to open a project focused on 1 - Identifying unique variables of Latvia and how to "sell the country abroad” 2 - Identifying and justifying which are Latvia’s strategic sectors to bring credibility to investors Following our methodology, we researched what are the current perceptions in investors’ minds about Latvia, so we could understand what were Latvia’s unique selling propositions. The Findings Latvia’s perception Latvia’s University reputation Positive Our findings among 300 Business leaders indicated that although Latvia had no connotations or was simply associ- None ated with “price”, it was also perceived as a country with an excellent educational system thanks to it’s connotations Low Education Negative with Russia and the former soviet union. With this positive None perception, came the Latvian Universities that ranked very Other high in terms of perceptions. 42% 27% 23% 8% 65% 25% 10%
- 5. The Strategy Based on all findings from the research, Bloom Consulting developed a project called the Polaris Process - A conjoint Methodology between Latvian Universities and the Investment Promotion Agency to provide research and sectorial know how to strategic foreign direct investors. The Polaris process does not only involve two main stakeholders, but totals seven. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain process All seven stakeholders feed the Latvian perception of an “highly educated society” by delivering true knowledge and content to any strategic investor. This delivery is structured in the Polaris Process, where all Key stakeholders are interconnected and play a role in the entire process... Including the Investor, thus ensuring an engagement from an early stage of contact or lead.
- 6. The Strategy Additionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the whole process and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) external The first one was about identifying what were the key success factors for the process to work efficiently The second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain process All foreign representatives where instructed to approach only strategic sectors for Latvia and to introduce a sales speech based on research and sectorial findings from Latvian Universities. The focus for each foreign representative was to bring 10 strate- gic investment leads in the first Phase and convert it in real cases within 1 year
- 7. The Strategy Additionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the whole process and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) external The first one was about identifying what were the key success factors for the process to work efficiently The second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain process The Latvian Development agency was responsible for coordinating all stakeholders in the Polaris process, as well as structur- ing the organization to ensure the whole process would work. Moreover, they used Bloom Consulting research to choose 7 select sectors for development and attraction, introducing them in the National Political agenda and cabinet of ministers.
- 8. The Strategy Additionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the whole process and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) external The first one was about identifying what were the key success factors for the process to work efficiently The second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain process The Universities were coupled with the Latvian Development Agency in the Investor approach and all research findings and white papers on the 7 select sectors would be introduced in the process and delivered to the strategic investor. Moreover once the investor would decide to invest in Latvia, the University would offer free of charge research projects.
- 9. The Strategy Additionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the whole process and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) external The first one was about identifying what were the key success factors for the process to work efficiently The second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain process The Ministry of Economy needed to assure the strategic sectors were the recommended 7 and would meet each individual investor personally to inspire confidence
- 10. The Strategy Additionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the whole process and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) external The first one was about identifying what were the key success factors for the process to work efficiently. The second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain process All interested municipalities were asked to demonstrate their level of interest in receiving foreign investment and play an edu- cational role with the local community to explain the importance of FDI
- 11. The Strategy Additionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the whole process and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) external The first one was about identifying what were the key success factors for the process to work efficiently. The second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain process Most Latvian companies in the 7 select sectors (Wood processing, Metallurgical, Transportation and Logistics, IT, Healthcare, Life Sciences, Green tech) would express interest in receiving international investors or simply in cooperating and sharing sectorial information
- 12. The Strategy Additionally to the process, Bloom Consulting designed the entire methodology with quantifiable objectives for the whole process and for each stakeholder. All objectives where thought out in two phases 1) internal and 2) external The first one was about identifying what were the key success factors for the process to work efficiently. The second one was about determining who could be a strategic investor and in what geographies. Level of involvement Investor Latvian Development Agency Universities Municipalities Foreign representatives Ministry of Economy Private Sector Chain process International Investors would express areas of interest with Latvian Development Agency to discuss with Universities and all Stakeholders know-how and integration needs.
- 13. The Projections and Results Most stakeholders had quantifiable objectives to follow, and sectors were considered strategic thanks to solid projections. Investor Ministry of Economy Level of return Municipalities Universities Latvian Private Sector Foreign Development representatives Agency Chain process 10 Leads/Y 20 visits/Y 10 Projects/Y Up to 5% Taxation Investment Higher ROI 1 Investor/Y 10 Investors/Y GDP Increase Employment More research P/ Sector