Lublin Info Centre

Soft factors in attracting investments

Business is business - everyone knows this saying. According to this, business decisions are completely separate from emotions or personal issues. However, we were wondering whether soft factors also have an impact on investment location decisions. So we asked experts - representatives of a consulting company, a business support institution and a firm that has already invested in Lublin - to take a comprehensive look at this issue.

An entrepreneur looking for the optimal location for his investment pays attention to the so-called hard, objective factors, such as labour market conditions, available investment incentives, a supply of plots or office space. Can soft, often subjective factors, e.g. a favourable image of the place or the attitude of local authorities, also influence the investor’s decision?

Agnieszka Solak, Head of Lublin Office, Cushman & Wakefield – Definitely yes. Investors, not only foreign but also Polish, often need the support of local authorities, especially at the beginning of the process. The success of an investment is achieved not only by the availability of staff or the number of university graduates but also the speed in issuing administrative decisions, understandable procedures, availability of investment areas or offices. More and more often investors also pay attention to the quality of life or cultural potential of a given city.

Wiktor Doktór, CEO, Pro Progressio Foundation – Several elements are essential for investors looking for an optimal location for their business. The first is the human resources necessary for operational work, the second is infrastructure – it depends on whether the company is productive or service, so investment areas, office space, etc. are taken into account. Another element is logistics and ways to reach a given location. Each of the above factors is also connected with cost offers, both from the perspective of the cost of starting a business, as well as from the standpoint of running a long-term operating activity. I am pleased that the question asked about soft elements – they are equally important. People buy from people; hence the human factor is essential in the process of attracting a new investor and the relationships that can be established during both telephone conversations and meetings in the potential location of the future business. The atmosphere and professionalism presented by representatives of the city, regional development agencies, business support institutions, HR or Real Estate agencies are of key importance in the process of convincing the investor to include the location on the so-called ‘shortlist’. At the end of the day, the financial, logistic, and human factors are the most important.

Zbigniew Radomski, Business Development Manager, KS engineering technology – The most important decision criterion for our investment in Lublin was the fact that it is my hometown. Local patriotism played a key role in the installation of our project. Of course, before the final decision on the choice of Lublin as our future location, we also analysed all the information available on hard and soft factors.

Regardless of the administrative and statistical facts, the positive emotions generated during our first visit to Lublin in September 2015 played a significant role. Professional care of our plans on the part of the representatives of the City of Lublin resulted in decision-making certainty and increased trust in the possible success of our investment.

Does the first impression affect the process of selecting an investment location? What is its strength?

Agnieszka Solak – The first impression effect is important in every area of our lives. It is no different in the process of choosing an investment location. Large corporations or companies from the BPO sector often do not have much time to look for a place for their centres. That is why the first impression or cooperation with Investor Service Centres is so important for them. A great example from Lublin of openness of local authorities is the situation when one of the investors ‘quite spontaneously’ asked C&W to present the Lublin market. At 8 PM I called the representatives of the city and the next day, at 8.30 AM a team of experts from the Municipality was fully ready to support the potential investor. I must admit that it made a great impression on my client.

However, let’s be aware that decision-making processes are based on many indicators, so even the best first impression does not necessarily mean success.

Wiktor Doktór – Absolutely yes – nothing can replace the first impression. The representatives of the local government should professionally take care of the investor. The first impression is irreplaceable, so every effort should be made to ensure that the best possible people serve the investor, the feedback is comprehensive, and the investor himself has the certainty that he came into the right hands.

Zbigniew Radomski – The positive effect of the first impression was an important factor influencing our investment decision. Professional service on the part of the City of Lublin met our expectations and positively tuned us to further potential cooperation.

What are the expectations of a potential investor in direct contact with the local government in the city?

Agnieszka Solak – We live in times when the investor’s expectations towards the local government are growing. Cities competing with each other have specialist units in the form of Business Support Offices, which guarantee comprehensive service and readiness to answer almost any question. Investors expect precise and accurate information relating to a specific project and its demand regarding the labour market and infrastructure. Quickly reacting local government, which is active in action or moderates dialogue with universities to develop particular skills in particular fields of study is also crucial.

Wiktor Doktór – The investor expects a comprehensive ‘care’. He needs to get answers to all questions or at least information that is complete enough to be able to build an image of his potential presence in a given location. You need to be honest with the investor and do not colour the answers. If there is no infrastructure in a city (e.g. an airport), it should be explicitly stated. Each city has advantages that determine its value as a location for many different groups of investors, and it should focus on them. Local government is one of the key organisations that can provide comprehensive data on the city and its surroundings, competitors on the local market, academic environment, as well as possible grants and support in the investment development process.  It is to a large extent up to the local government, and not private advisory companies, to determine whether the investor will be located in a given location.

Zbigniew Radomski – The process of selecting an investment location in our case had a clear preference in Lublin at the outset. On the other hand, we had to verify our analyses and see how cooperation with the local government may look like on the spot. The most important expectation was, therefore, the professionalism of the city representatives with whom we had contact, and this expectation was fulfilled.

How important are the elements related to the quality of investor service in the city, e.g. qualifications of staff, office premises, the form of organisation and relevance of meetings selection, or cooperation of local government with business support institutions and universities?

Agnieszka Solak – Fulfillment of the elements mentioned above is crucial for the success of the investment. A representative of the Municipality must be a partner for experienced consulting companies. Therefore a good knowledge of the business language is crucial in building an understanding between the City and potential investors. The environment in which investors are received is a showcase of the city. It is beneficial when the comfort and quality of space reflect the highest standards available on the local market.

Wiktor Doktór – Local government – City Hall or Marshal’s Office – is the frontline for a potential investor. This is a signpost to all other institutions, schools, universities, offices, and other organisations that can or should be involved in the process of talks with the investor. Bearing this in mind, it is critical how the environment in which the investor is received looks like and who is selected to talks with such an investor. Both the area of the office, and the professionalism and proper preparation of people talking to the investor have an impact on how the city will be remembered in his eyes. The investor counts on support, hopes that his visit will run smoothly, people for talks will be adequately selected and the time will be 100% well used. All meetings and their course should be planned with this in mind.

Zbigniew Radomski – All these elements are essential, but from our perspective, the most crucial aspect has been and still is the ability of the Business Support Office staff to respond quickly and substantively to our needs at every stage: both during and after the completion of the investment. Their peace, support and high level of personal culture make going through the successive stages of the administrative process and satisfying the resulting technical needs become pleasant and trouble-free.

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