SESSION 2: WHAT SECTORS SHOULD BKPM …...2018/05/08 · FDI only) 3. Indonesia top export sectors...
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1 www.wavteq.com SESSION 2: WHAT SECTORS SHOULD BKPM TARGET FOR FDI? 10:15-11:15
Transcript of SESSION 2: WHAT SECTORS SHOULD BKPM …...2018/05/08 · FDI only) 3. Indonesia top export sectors...
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SESSION 2: WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
10:15-11:15
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o Identifying the target sectors for FDI attraction is critical to success in attracting FDI and should drive the overall investment promotion strategy
o Sector strategy informs proactive investment promotion and lead generation activities
o The sectors being targeted help determine:
+ What sector marketing materials and value propositions are needed?
+ Which trade shows and events to attend?
+ What countries to target for FDI?
+ Which overseas missions to make?
+ What partnerships to create?
+ Which specific companies to target?
WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Why develop a sector targeting strategy?
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oWhen identifying ”sectors” its is essential to be as focused as possible. Most IPAs have far too broad sector strategies, which makes it very difficult to proactively target companies. Targeting the “food” sector or the “IT” sector or “renewable energy” sector is not sufficient for an investment promotion strategy – the specific subsectors and individual product areas to target must be identified
o The sector targeting strategy of IPAs may not fit standard industry classification systems. For example, Cyber security, artificial intelligence, and big data are amongst the hottest subsectors for FDI but fit no standard industry classification. Furthermore, many IPAs are actually targeting business activities which are often sector agnostic e.g. an IPA may target BPO operations, which can come from multiple industry sectors
oMost IPAs build sector teams who have the sector expertise to be able to help companies invest and expand their operations in the location and create local linkages with SMEs, research institutions, skills and training centers, and other entities
WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
How to develop a sector targeting strategy?
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WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Framework for identifying target sectors
TARGET SECTORS
1. Economic development
objectives
2. Competitive position
3. Market demand
WAVTEQ Three Force Model of target sector identification www.wavteq.com/publications
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Please see the below handouts providing sector data to help identify sectors to target for FDI into Indonesia
1. Inward FDI flows to Indonesia by sector (BKPM data – covers all types of FDI)
2. Inward FDI projects, jobs and capital investment into Indonesia by cluster, sectors, subsector and activity (FT data – covers greenfield FDI only)
3. Indonesia top export sectors (ITC data)
4. Indonesia top import sectors (ITC data)
5. Global FDI flows by sector (UNCTAD data – covers all types of FDI)
6. ASEAN inward FDI projects, jobs and capital investment by cluster, sectors, subsector and activity (FT data – covers greenfield FDI only)
Please take 20 minutes to look through the handouts
WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Exercise handout – sector information
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What should be the key sectors (and subsectors) to target for FDI into Indonesia?1. Infrastructure – energy, mining, transportation, electricity – conventional
and renewables especially (priority of government)
2. Manufacturing – food (exports), industrial machinery, heavy industry (value added), textiles (jobs), pharma and chemicals (import substitution and reduce costs in Indonesia), electronics, automotive
3. Maritime – cold storage, fish processing, harbor, ship and boat building
4. Agriculture – cattle, livestock (food security)
5. Tourism – hotels, restaurants, travel agents, SEZs
6. Lifestyle/Digital – e-commerce, software development, retail, film, creative industries
7. Services – financial, professional (increases competitiveness of all sectors, knowledge-transfer, high income – but min. FDI threshold too high perhaps!), and education
8. Xx
9. Xx
10. xx
WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Group brainstorm – what sectors to target for FDI?
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WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Target sectors identified as part of TPSA project to attract Canadian FDI to Indonesia
Renewable Energy
1. Biomass
2. Solar
Services
3. Professional, scientific & technical services
4. Software & IT (digital media, e-commerce, and mobile)
Manufacturing
5. Machinery & Equipment (Agriculture, Construction, Mining)
6. Pesticides, Fertilizers & other Agricultural Chemicals
Transportation
7. Air Transportation (PPP, support services, freight & distribution services)
Agri-business
8. Dairy Products
9. Fisheries
Aligning Indonesia sector strengths for FDI with outward FDI sectors from Canada
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WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Indonesia’s competitive sectors for FDI – Solar
Source: Developed by WAVTEQ for TPSA project
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WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Indonesia’s competitive sectors for FDI – Biomass
Source: Developed by WAVTEQ for TPSA project
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WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Indonesia’s competitive sectors for FDI – Chemicals
Source: Developed by WAVTEQ for TPSA project
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WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Indonesia’s competitive sectors for FDI – Machinery
Source: Developed by WAVTEQ for TPSA project
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WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Indonesia’s competitive sectors for FDI – Fisheries
Source: Developed by WAVTEQ for TPSA project
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WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Indonesia’s competitive sectors for FDI – Dairy
Source: Developed by WAVTEQ for TPSA project
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WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Indonesia’s competitive sectors for FDI – IT
Source: Developed by WAVTEQ for TPSA project
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WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Indonesia’s competitive sectors for FDI – Technical services
Source: Developed by WAVTEQ for TPSA project
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WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
Indonesia’s competitive sectors for FDI – Air Transport
Source: Developed by WAVTEQ for TPSA project
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To benchmark locations there are many data sources:
o International organizations e.g.+ https://data.iadb.org/+ https://data.worldbank.org/products/wdi
o Competitiveness reports e.g.+ https://www.weforum.org/reports/the-global-competitiveness-report-
2017-2018o Subscription databases e.g.
+ https://eiu.bvdep.com/frame.html+ www.fdibenchmark.com
o National governments e.g. + www.state.gov/e/eb/rls/othr/ics/2017/wha/270080.htm+ https://2016.export.gov/+ www.export.gov/
WHAT SECTORS SHOULD BKPM TARGET FOR FDI?
How to benchmark location competitiveness?
