The Liverpool City Region in the UK has attracted companies from across the globe in search of the ideal location for their high-tech customer contact centres.

Offshore relocation of service centres is tempting but the decision should be based on more than cost. Ashleigh Lezard reports.

Everyone is doing it. Even Microsoft, the most American of companies is doing it. Moving offshore is cost effective and, in these difficult economic times, even the richest companies in the world want to save money.

Microsoft recently announced that it plans to expand its operations in India. The company, whose Windows operating system and Office desktop software run on more than 90% of the world’s PCs, has a small software development centre in Hyderabad. On its website, Microsoft lists a large number of vacancies, many requiring five years’ experience, understanding of multiple computer languages and degrees in computer science. It now plans to develop a customer support centre in Bangalore. It is reported that initially it will hire 150 people but the centre can easily be scaled up to 1000-strong in the next two years.

Nanotechnology has the potential to advance industry in ways that have never yet been experienced. This tiny technology also has the ability to encourage communities to grow, jobs to be created and tremendous economic development in a wide range of industries from electronics to biotechnology and beyond.

But the effort of working with atoms and molecules 80,000 times smaller than the width of a human hair to develop new processes and products requires big bucks and a vast sharing of resources. Not all communities have these ingredients. To move nanotechnology out of the laboratory and into the market place requires the right chemistry: a clustering of and co-operation between major manufacturers, university research laboratories, nanotech alliances, and private and public money.

Nanotechnology is evolving fast and commercialisation is a priority. With so many centres of excellence around the world, the race to win the title of “Nanotech Valley” is on. Karen E Thuermer reports.

The world of nanotechnology is akin to Lewis Carroll’s Alice in Wonderland. Everything becomes very small and fantastic things begin to happen.

Nanotechnology involves working with materials on the nano-scale, 80,000 times smaller than the width of a human hair, a practice that has been around for centuries. Remember the alchemists? Yet, ever since IBM invented the Scanning Tunnelling Microscope and researcher Don Elgler arranged 35 atoms to spell “IBM” at the IBM Zurich Research Laboratory in 1989, the world has seen an unprecedented land grab for nano-technology intellectual property.

Haitham Rashid Wihaib is in ebullient mood. The former chief of protocol in Saddam Hussein’s private office for 11 years is bursting to tell stories of his fascinating past and what he plans to do in the future.

To create a biotech industry, you need “brave hearts, cool nerves and iron stomachs”, says Singapore’s Philip Yeo, the man driving the island state’s push into this most sought-after investment sector.

“You must take risks. You must be prepared for some failures before you succeed. If it was easy, everyone would do it,” he says.

Mr Yeo pioneered Singapore’s petrochemical industry from green field to world beater during his 15 years as chairman of the Economic Development Board (EDB). He is now repeating the process for biotech in his role as chairman of the Agency for Science, Technology and Research (A* Star).

Vicente Fox, president of Mexico, was named as the global fDi magazine’s Personality of the Year 2003 at an award ceremony held in Amsterdam. Since he came into power in 2001, FDI into Mexico has increased substantially. This is all the more impressive when set against a global slowdown in investment flows.

According to Ma. de Lourdes Dieck Assad, undersecretary of economic relations and international co-operation who collected the award on behalf of Mr Fox, the president has created a business environment that is conducive to investment by maintaining macro and micro economic stability, increasing access to markets through free trade agreements and reducing regulations and red tape. According to Ms Dieck Assad, although the country has suffered from recession the government has maintained fiscal controls in order to create long-term stability.

Turkey announced in July its intention to ease FDI rules by enacting a series of legislative and regulatory amendments. The Foreign Investment Advisory Service of the World Bank assisted the government in drafting a new foreign investment law and is evaluating the options for the establishment of a national investment promotion agency.

www.ntvmsnbc.com

A survey by the American Chamber of Commerce of South Africa has revealed that US companies operating in South Africa are taking a more favourable outlook on domestic investment.

Global flows of FDI fell sharply in 2001 and 2002, following the historical boom during 1999-2000. A lot of countries in both developing and developed regions have experienced the most abrupt downturn in FDI inflows for years. A recent world-wide survey of 154 national investment promotion agencies (IPAs), conducted during February and March 2003 by UNCTAD, confirms this: almost 60% of the IPAs surveyed (106 responded to the survey) reported on postponement of FDI projects, while about one-third faced cancellation of projects, downscaling of FDI projects and even outright divestments.

A controversial minerals mine in Fort Dauphin, Madagascar, could serve as a model of green capitalism while helping the economic development of one of the world’s poorest countries.

UNCTAD’s World Investment Report 2003 is due out in September. The report, FDI Policies for Development: National and International Perspectives, identifies that transnational corporations (TNCs) are increasingly relocating their headquarters (HQs). (See Outlook)

US companies that invest overseas will be keeping a close eye on Congress in the next few months as a longstanding tax gripe is finally being addressed. A bill is now being read which, if it becomes law, could lift a huge barrier to investing abroad.

Multilateral investment rules may seem like a sensible step but the most vexing question is how they will be enforced. The US, in the throes of an upsurge in anti-foreign sentiment, cannot be counted on to set a good example.

A recent report by IBM-Plant Location International recorded 1093 project announcements worldwide in May, creating over 137,000 jobs. The statistics below, taken from the report, show who is benefiting from this investment and where it is originating from.

As Iraq’s soaring debt tests investor confidence, Mark Wallace looks at how new trends in debt forgiveness could pave the way to economic restoration.

Emerging markets are the scene of the growth of major companies in diverse sectors. Some, like those profiled here, are taking on the established global giants.

Eastern european countries are working hard to change investors’ preconceptions. fDi talks to representives from seven regions and finds them confident of success.

Special Summit Meeting
International Law on Incentives, Benefits, Competition and State Aids

World Free Zone Convention has called for a Summit Meeting of all free zone and industrial park authorities and operators to be held in London in early December. The programme will also be of interest to investment promotion agencies and regional authorities.

In Turkey’s Aegean Free Zone, employees have access to medical and dental clinics, sports facilities and child care. Mary Tuncer explains the ESBAS philosophy.

There is disagreement about whether or not the UK is suffering from being outside the eurozone.

Figures released by the European Commission in June show that the UK share of foreign investment from outside the EU fell from 48% of the total in 1998 to 25% in 2001. There has also been a decline in the UK’s share of cross-border investment from other European countries.

However, a report released by Ernst & Young (E&Y) revealed that, although the number of inward investment projects into the UK declined in 2002 by 5%, it remains the largest market for inward investment in Europe, receiving 19% of the total. Investment into the eurozone fell by 13%.

The manufacturing sector is regarded as suffering the most from being outside the eurozone but the E&Y report showed that the UK has the highest market share for auto assembly projects in Europe. Barry Bright, head of the Location Advisory team at E&Y, said: “The issue of euro membership appears to be a bit of a damp squib as far as inward investors into Europe are concerned.”

Population

The government of Sharjah is aiming for a diverse economy. Ashleigh Lezard looks at its strategy.

Dubai is creating its own opportunities for prosperity by supporting enterprise.

Dubai’s story is one of enterprise and innovation. In its meteoric rise as a global destination of choice for business and tourism, Dubai has earned international accolades for its visionary thinking, sound policy making and liberal regulatory environment, and has firmly established itself as a prime global contender in the new economy and gateway to the region.

The developers of the Dubai Internet City (DIC) know all about the power of advertising. From the main highway leading out of town that stretches past the DIC, the names Microsoft, Canon and IBM are clearly visible atop the buildings in which the firms are housed. The presence of such technology firms, as well as the visual appeal of a modern, well-manicured tech campus – has proved a powerful draw for foreign investors.

Dubai is forging ahead with new projects and strategic partnerships in its efforts to be a major global economic centre and a world-class competitor for FDI. Ashleigh Lezard reports.

Although there are still ownership barriers for foreign investors,

Al Ain is about 160km inland from the city of Abu Dhabi and is the capital of the eastern region of the emirate. It is the fourth largest city in the UAE. Its position on the borders of the Sultanate of Oman and the only city in the UAE with seven oases has established it as the “garden” city of the emirate, and an important and ancient trade centre in the Gulf.

Since its inception in 1971, the United Arab Emirates has made astonishing progress. Moving the economy away from a reliance on oil will require more change but, this time, in investment regulation. Ashleigh Lezard reports.

In an era of globalisation, the worrying upsurge in anti-foreign sentiment in the US could jeopardise inward investment. Sophie Roell investigates.

Mark Begich has a vision of his hometown of Anchorage becoming an important financial centre. As its new mayor, he has an opportunity to help make a difference. Karen E Thuermer reports.

Mark Begich, the recently inaugurated mayor of Anchorage, Alaska, recalls a city that boomed in the 1970s then suffered under the oil shock of the mid-1980s. “People virtually walked away from their houses and left, leaving street after street of deserted homes,” he says. “We lost 20,000-plus people.”

Can multinationals really make a profit in China? Yes but not without perseverance and planning, as is shown in this extract from Merrill Lynch’s recent report, Multinationals in China.

Located on the east coast of the United Arab Emirates, Fujairah has built an impressive reputation as a centre for business and trade, aided in part by the efforts of the Fujairah Free Zone Authority.

The government of Fujairah, in its constant development of infrastructure, has reduced the red tape that hinders economic growth, be it in relation to the international airport, the Port of Fujairah or the Fujairah Free Zone.