Aftercare after COVID-19
A global recession is unavoidable. UNCTAD [The United Nations Conference on Trade and Development] are estimating that global FDI could drop by as much as 40%. And with companies likely to look towards regionalising their supply chains, a comprehensive Aftercare strategy has never been more important. But how has Aftercare evolved to meet the demands of a COVID-19 world?
The role of Aftercare in a COVID-19 world
According to Tim Harris, the CEO of Wesgro, official Investment and Trade promotion agency for the Western Cape, “Aftercare is a critical component of Investment Promotion support – World Bank statistics indicate that 50-60% of fixed investments are re-investments rather than new greenfield investments.”
On a similar note, depending on which industry you’re in, it’s been suggested that acquiring a new customer is “anywhere from five to 25 times more expensive” than retaining your existing customers. In short? Supporting your existing investors is more likely to result in new investments, and it will likely cost you less to do so.
Today though, the investment landscape looks substantially different, even in comparison to just a month ago. Many organisations are looking at their short-term survival; companies that might have been planning to open a new location could well be prioritising shoring up their defences now instead. While it seems likely that your existing investors are still your most likely source of reinvestment, Aftercare is taking a more critical role during COVID-19 – helping existing businesses navigate these uncertain waters.
Challenges facing the private sector
Obviously, each sector is facing their own challenges, but one of the biggest challenges for all organisations is the lack of certainty. With no clear end to the lockdown in many places, planning for the next few months becomes extraordinarily complicated.
How can they ensure their supply chain is stable? Will there still be consumer demand? How can they protect their employees – and will they be liable if they encourage people to return to work and their employees get sick?
Most companies are scenario-planning in order to be prepared for multiple possible outcomes, but with the number of unknown variables still at play, it’s likely that we’ll see more local businesses closing before the end of the year. So how can economic development and investment promotion agencies support their local private sector companies through the crisis? How are cities, nations and regions transforming their Aftercare strategy to help their businesses to recover?
Being the trusted voice: Wesgro
“We need to be a source of information that they can count on and depend on,” explained Leah Chandler, the CMO at Discover Puerto Rico, during our most recent webinar. “It’s an opportunity for us to stand up, to be leaders, and to really push the recovery forwards when the time comes.”
Leah was speaking primarily of her tourism stakeholders, but her words resonate much more broadly. Private sector organisations across the world are facing a number of tough decisions right now, and they need information to respond effectively.
Wesgro, have revised their own strategies in the light of COVID-19, refocussing 80% of their resources into supporting local businesses.
With the support of key stakeholders like the Western Cape Government Department of Economic Development and Tourism, and the City of Cape Town, Wesgro have developed the COVID Support Finder tool. “[The tool] assists businesses in accessing support measures that are most relevant to their business,” explained Tim. “The tool has been utilised by more than 5,000 businesses; through ongoing and follow-up interventions, the team has also directly provided guidance to more than 350 businesses in the region.”
Using innovative tech solutions to provide personalised support: Invest Estonia
Estonia have been one of the forerunners in digital innovation, with multiple e-government solutions. “Last year, [Estonia] created an e-consulting service and automated its enquiry handling process,” explained Andrew Wrobel, Founding Partner at Emerging Europe. “Potential investors are asked a series of questions and provided with a report that is tailored to their needs.” As a result of this, around 85% of enquiries received by Invest Estonia are now dealt with automatically.
However, Estonia haven’t been resting on their laurels, and the IPO recently launched an AI chatbot called Suve which can offer advice on the COVID-19 situation: “Suve is now a fully operational and viable way for the Estonian state to communicate with businesses and individuals,” Andrew stated. “What’s more, Suve is here to stay, beyond the end of the coronavirus crisis and the chatbot’s future role could see her taking care of passport applications and other administrative duties, alongside, no doubt, much else.”
A recent hackathon in Estonia also awarded €5000 to five start-ups offering innovative COVID-19 solutions – including a workforce sharing platform, Share Force One, which is helping to connect short-staffed organisations with furloughed workers.
Being agile in the digital sphere: Invest Hong Kong
Like many of us, the Invest Hong Kong team had to adapt to working from home in a virtual setting; communicating that they were still accessible by phone and email was critical to supporting their current and potential investors. “We expanded our presence and visibility in the digital space to convey key information to our clients,” explained Edith Wong, Invest Hong Kong’s Chief Marketing Officer. “We began to organise webinars from March to keep our clients informed and engaged. In addition to marketing and communications efforts, we focus very much on one-on-one Aftercare service.”
This personal note is essential to building firm relationships with your investors, but also to ensure that you’re supporting their personal needs. But the framework of that relationship has had to adapt to new social distancing requirements. “We used to conduct overseas visits to meet with clients face-to-face. This is being replaced by ‘virtual’ visits,” says Edith. “We are thinking of using virtual reality to bring Hong Kong to them.”
The key to successful Aftercare – both during and after the COVID-19 pandemic – is the ability to be nimble, and to rapidly adapt your strategy: “We are constantly exploring how to do the right things at the right moment. We may not always get it right the first time, but we reflect on what we have done right, what can be improved on a daily basis – having this kind of constant experimentation and adjustment mindset is important.”
Reconnecting the supply chain: Business Sweden
“From a trade promotion perspective, both Swedish and international companies are struggling to get supplies in time; get their value chains working; find new suppliers; and to get products through customs,” Ylva Berg, CEO and President of Business Sweden explained in an interview to FDI Intelligence.
To support companies through these challenges, more staff members have been made available to answer queries and to connect them to the available support systems. They’ve also worked to ensure that foreign-owned companies paying taxes in Sweden have been afforded the same possibilities as their local counterparts – such as the ability to pay taxes at a later point.
“I always try to put the employee in the centre,” Ylva admits. “You have to put yourself in their shoes and see what you can do to make their life a little easier.”
Sustainable investment: CINDE
Sustainability is at the core of Costa Rica’s value proposition; CINDE, the nation’s investment promotion organisation continue to focus on investment with purpose, supporting people, planet and longer-term prosperity.
“Today, the role of aftercare must be focussed on delivering the right talent for those jobs of tomorrow,” explains Karin Lachner, Head of Marketing and Communications at CINDE, “leveraging Costa Rica’s capabilities on digitalization and building the technical and soft skills needed to continuously adapt, innovate and drive sustainable impact – as COVID-19 has shown the world it needs to do.”
Working together with the Ministry of Foreign Trade and PROCOMER, a bi-weekly meeting has been established for all related chambers to channel any concerns. Six ‘work groups’ of public-private participation address challenges around immigration, employment, talent, free zones, export s and logistics. “The model has proven successful in ensuring safe and reliable business continuity,” Karin states. “In the manufacturing sector – particularly life sciences and advanced manufacturing – all companies are operating normally with no business disruptions.”
Meanwhile, CINDE has been working closely with the tourism arm of the government to create a virtual platform – like Estonia’s hackathon solution, the platform connects unemployed tourism workers with new roles opening up in the multinationals that are thriving in the crisis. As well as supporting citizens who have been impacted by the drastic decline in tourism, the partnership is an excellent example of how investment promotion and tourism can collaborate to drive better quality of life for their community.
Aftercare after COVID-19
As these five investment promotion organisations demonstrate, the mechanisms by which we deliver Aftercare are evolving. We’ve rapidly accelerated through years of digital transformation in mere months and we’re finding new ways of working, communicating and connecting with others. But the importance of Aftercare is still clear – and supporting your local businesses beyond their initial investment has never been more crucial to ensure the resilience of your destination.