The last word: Drop ‘strategic location’; it’s yesterday’s news

In today’s economy, the availability of talent (now and in the future), talent retention, as well as the capacity for innovation are far more influential than geographic factors.

Earlier this week I had a chat with a senior representative of a national investment promotion agency for one of the emerging Europe countries. 

We were talking about leveraging disruptive technologies in manufacturing when he suddenly brought up his country’s ‘strategic location’ (by others also referred to as, ‘unique location’) as the key element of its value proposition. 

The phrase is always a red light for me, as it is a sign of old-school think and definitely not what countries should really focus on. 

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The digital revolution has fundamentally altered the way businesses operate. Cloud computing, high-speed internet, and remote work capabilities have decoupled business operations from physical location. 

The Covid-19 pandemic further accelerated this trend, demonstrating that many companies can function effectively without being tied to a specific place. 

In this new reality, the significance of geographic location (which is always ‘unique’ by the way, as no country can change its place on earth) has diminished. 

In today’s economy, the availability of talent (now and in the future), talent retention, as well as the capacity for innovation are far more influential than geographic factors. Regions with highly educated workforces, strong research and development capabilities, and vibrant innovation ecosystems are better positioned to attract investment. 

Instead of geographic location, investors also now prioritise infrastructure and connectivity. Modern businesses require robust infrastructure—such as efficient transportation networks, reliable utilities, and advanced digital connectivity—to operate effectively. 

Transparency matters

Another crucial factor in investment attraction is the regulatory environment. Investors are drawn to regions with transparent, efficient, and business-friendly regulations. A stable legal environment, protection of intellectual property, and low levels of corruption are critical for creating an attractive investment climate.

A country’s location is irrelevant if businesses face excessive bureaucracy, corruption, or legal uncertainties. Investors are drawn to regions where the rule of law is strong, intellectual property is protected, and the regulatory environment is predictable and efficient. 

As the world increasingly relies on sustainability, countries and regions that lead in green technologies and environmental stewardship are also gaining a competitive edge. Investors are now looking for places that offer sustainable development opportunities and are committed to addressing climate change. 

While a strategic location may have once been a significant factor in attracting investment, its importance has waned in today’s globalised, digital, and knowledge-driven economy.   

Factors that matter

For countries and regions seeking to attract investment, the challenge now is to move beyond the outdated notion of strategic location and focus on building the factors that truly matter in the 21st century.  

By investing in the essential areas, countries and regions can create a compelling value proposition that resonates with global investors—no matter where they are located on the map. 

The future of investment attraction lies in the ability to create environments where businesses can thrive, not just in proximity to markets or resources, but in ecosystems that support growth, innovation, and sustainability. 

It is time to drop the ‘strategic location’ pitch. It’s yesterday’s news. 

The sooner countries and regions recognise this shift, the better positioned they will be to attract the investment they need to drive long-term economic success.

Copies of Emerging Europe’s Investment Promotion Report 2024, published this week, can be downloaded for free, here.

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