ICA Global Performance Index 2007/2008:
Investment Globalization Impervious to the Foreign Profitability Cycle

Multinational firms operating in the computer (network) industry are among the leading international performers who have managed to realize an exceptional return on their foreign productive activities. The table below shows the top-10 performers over 2006 measured along the ICA – Global Performance Index (GPI), the return on foreign assets.
1.Cisco Systems
7.Cardinal Health
10.United Technologies

Douglas van den Berghe, managing director of Investment Consulting Associates: “The top performing firms seem to be able to manage their globalization process very successfully, making it a successful business strategy. Most of the exceptional performers have been able to find the right balance between their domestic activities and those offshored and outsourced to (emerging)markets – something we qualify as the optimal level of globalization. In addition they have been able to strategically tap into local talent pools and realize an effective supply chain management strategy.” “Illustrative for the better performing firms is their ability to control the pace of globalization by building up a foreign presence. Slow is better seems to be the lesson as it is associated with the highest levels of foreign profitability.”.

The report highlights that international expansion by large multinational corporations is not always a profitable proposition. On average it is accompanied with very volatile levels of foreign profitability. At the same time given competitive pressures, international expansion is a forced proposition and inevitably for many firms operating in global industries.

Steady Globalization but greater, volatility in foreign investment profits
Over the last decade globalization of foreign production and foreign turnover has developed progressively and very steadily. However, the profitability of foreign operations has been very volatile and subject to much greater variety. For many global operating firms globalization has continued despite the absence of profitability, making it a forced proposition.

For more information to access the ICA-GPI Database please see

The report by Investment Consulting Associates Ltd. (ICA): “ICA Global Performance Index 2007: Investment Globalization Impervious to the Foreign Profitability Cycle” can be downloaded on this website as well.

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Aftercare as reservoir of potential FDI
Posted on Wednesday, 29 April 2009 16:22

Over the last couple of years we have had  the pleasure to run a number of workshops for the World Association of Investment Promotion Agencies (WAIPA) on investment aftercare around the world.

FDI by existing investors is often neglected as an important source of FDI in any location. In many cases it can, however, be seen as an important and growing ‘reservoir’ of FDI. In some countries more than 50 percent of FDI is conducted by existing investors through re-investments, diversification or expansion projects. In fact organic growth in existing locations by multinational corporations is one of the most common strategies in international business today.

Aftercare programs – or more broadly our concept of Corporate Development Strategy (CDS) - should therefore be a top priority with many Economic Development Agencies (EDOs, including IPAs and Free Trade Zones).
Nevertheless, many EDOs do not have an aftercare strategy or see aftercare as investor facilitation in which administrative tasks in relation to work permits, visas, land issues and exemptions are the daily practice. The concept of CDS is more strategic and much moree associated with business advisory. 

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