Ten Rewirings

The metric that has justified investment promotion agencies to legislatures for decades is jobs per dollar. When an agency announces a new facility, the press release says two things: how much the company is investing, and how many jobs it will create. Legislators divide one by the other. That ratio has been the profession's primary accountability mechanism.

It is breaking.

Data centers are now the single largest category of greenfield foreign direct investment. UNCTAD's World Investment Report 2026, measuring announced greenfield project values for 2025, put data-center FDI above $270 billion, more than a fifth of all new greenfield project values worldwide, and AI infrastructure more broadly at $341 billion. If the capital-expenditure plans behind those announcements hold, both figures rise again in UNCTAD's next edition.

The employment ratios are different from manufacturing. The Virginia figure, one permanent job per $54 million invested between 2020 and 2025, compares with roughly one job per $300,000 to $500,000 in general manufacturing. Reported CHIPS Act semiconductor investment lands at about $7.5 million per permanent job. That is better, and still an order of magnitude above what a traditional factory delivers.

This matters because the political economy of investment promotion depends on jobs. When a governor or premier stands at a podium to announce a win, jobs are the currency. Tax revenue, infrastructure investment, land-use uplift, supply-chain density and the value-capture mechanisms that give a community a lasting stake in an investment are real benefits. But they are not the number on the press release.

The fix is not to stop pursuing capital-intensive investment. It is to rebuild the scoreboard around measures that already exist: tax revenue generated, local procurement spending, infrastructure delivered, and workforce-development commitments. Most agencies do not yet report those to their boards or their legislatures in a way that carries political weight, and practitioners who leave the gap open will find their budgets at risk not because they are failing but because they cannot prove they are succeeding.

UNCTAD's World Investment Report 2026 puts five strategic sectors at 16% of global greenfield FDI project values in 2020 and 44% in 2025. In absolute terms, the value rose from $109 billion to $576 billion.

AI infrastructure, semiconductors, critical minerals, energy-transition technologies, and their supporting services are pulling capital toward them at a rate that compresses everything else. The "general" investment pool has not grown, and in real terms it has likely shrunk. In the same report, UNCTAD puts the fall in manufacturing investment in low-income economies at 70% in 2025 and the top 20 recipient economies' share of global FDI above 80%.

This creates a structural problem for most investment promotion agencies. The majority are generalist organizations. They promote their jurisdiction's advantages across sectors: manufacturing, logistics, financial services, food processing, technology. That generalist pitch is now aimed at a shrinking share of total investment flows.

Agencies in small and mid-sized economies that do not have a natural position in the strategic five are chasing a smaller and more competitive pool. The projects available are fewer, smaller, and harder to win.

Agencies that do compete for strategic-sector investment face a different problem: they need deep sectoral expertise that most generalist organizations lack. Winning a semiconductor fab requires understanding supply-chain architecture, clean-room specifications, water and energy supply at industrial scale, and geopolitical supply-chain compliance. A trade commissioner who was selling a region's quality of life and tax climate last year is not equipped to have that conversation this year.

China has committed an estimated $147 billion in equity funds for its semiconductor industry. The United States allocated $37 billion in direct CHIPS Act grants, with state-level packages on top. The European Union has approved more than $35 billion in State aid for semiconductor fabrication. Japan has committed $18 billion. Taiwan matches that with tax incentives.

In clean energy, the scale is comparable. The Inflation Reduction Act's tax credits are projected to exceed $1 trillion over a decade. The EU's Clean Industrial Deal, adopted in 2025, creates a new State aid framework designed to match. Every major economy is running some version of the same play: public money to attract private investment in sectors deemed strategic.

For a mid-sized economy, this is not a game you can win on price. The subsidy packages that Intel, TSMC, or Samsung expect before committing a fabrication plant now run into the billions. The Semiconductor Industry Association reports that $630 billion has been invested across 140 projects in 28 US states since 2020. That investment was attracted by a combination of subsidies, workforce infrastructure, and proximity to design centers and end users. The subsidy was necessary but not sufficient.

Practitioners in smaller economies need to stop pretending they can out-subsidize the big four or five, and start competing on things harder to replicate: permitting certainty, and workforce depth in specific technical areas.

For most of the profession's history, the job was to attract investment. Get companies to build, hire, and invest in your jurisdiction. The institutional culture, the career incentives, the performance metrics all pointed in one direction: bring money in.

That direction now has a counterpart.

On June 8, 2026, the Council of the European Union formally adopted its revised Foreign Direct Investment Screening Regulation. Every member state will be required to screen inbound investments in sectors including semiconductors, AI technologies, critical infrastructure, critical raw materials, and military equipment. On December 18, 2025, the United States signed the COINS Act, which expands outbound investment screening to cover semiconductors, AI, quantum computing, and hypersonic systems across designated countries of concern, with Treasury's implementing regulations due by March 2027. Japan is reforming its foreign exchange and trade law. Canada is expanding mandatory pre-closing notification requirements.

UNCTAD counted 229 investment policy measures adopted globally in 2025. Most were formally favorable to investors, but they were increasingly targeted rather than broadly welcoming. The era of "attract everything" is over.

The agencies that manage this well will separate the functions organizationally: promotion teams that understand the security parameters without being responsible for enforcement, and screening teams with enough technical depth to make credible assessments without defaulting to blanket caution.

The harder adjustment is psychological. The profession was built on openness. The message now is closer to "come invest here, subject to conditions." Practitioners who cannot make that shift will find themselves either bypassed by their own security apparatus or caught making promises their government cannot keep. The screening burden joins a broader pattern of compliance requirements layered onto agencies that were designed as sales organizations.

The OECD's survey of investment promotion agencies in member countries, "Shifting gears in uncertain times," published in October 2025, found that the average number of mandates carried by an agency rose from 4.8 in 2017 to 5.4 in 2025. Ten of the 14 mandate areas in the survey expanded.

These expansions were mostly absorbed informally. Agencies did not restructure. They did not hire proportionally. They took on the new mandate, created a small team or reassigned existing staff, and kept going. On average, agencies underwent just over two formal organizational changes over the past decade, while mandates accumulated continuously.

This is the institutional equivalent of scope creep. Each individual addition seems manageable. The cumulative effect is an organization trying to do six things with the staffing and budget originally sized for two or three.

Some countries are responding by consolidating. Bangladesh is planning to merge four investment-related agencies into a single authority under its proposed Unified Investment Development Authority. Burkina Faso combined its investment and export promotion agencies into ABIPEX. These mergers reflect a recognition that fragmented mandates across multiple small agencies may be worse than concentrated mandates in one larger one.

The opposite approach is to split: create separate agencies for investment promotion, export support, and innovation, each with a clear mandate and the resources to execute. Neither model is inherently better. What does not work is the status quo in many countries, where a single agency is told to promote investment, support exports, drive innovation, develop regions, manage economic zones, promote tourism, and ensure responsible business conduct, while its headcount stays flat and its budget shrinks in real terms.

Practitioners who recognize this dynamic should stop absorbing mandates quietly. Either argue for restructuring and additional resources, or push back on mandates the agency cannot deliver credibly.

Under Mayor Karen Bass, Los Angeles has prioritized direct trade and investment relationships with cities across Africa. The San Francisco-Oakland metropolitan region reported more than 350,000 jobs tied to international trade and transportation in December 2025. In India, state governments are running their own investment-attraction missions abroad.

This is not entirely new. Cities and states have pursued international economic work for decades. What is changing is the scale, the formality, and the degree to which subnational actors are building their own foreign economic infrastructure independent of national agencies.

In the United States, the Department of State's Subnational Diplomacy Unit has not been operational since mid-2025. The proposed City and State Diplomacy Act would create a replacement, but it has not passed. Cities and states are filling the gap themselves. Some are doing it well. Others are duplicating effort, creating confusion for investors who cannot tell whether the state, the city, or the national agency is the right point of contact.

For national investment promotion agencies, this fragmentation poses a coordination problem. When a multinational is evaluating a location, the company expects a coherent offer: regulatory information, workforce data, incentive structures, and site options. If those come from three different agencies at different levels of government, each with its own branding and its own pitch, the company may look elsewhere.

Since 2022, governments have signed 58 bilateral critical minerals agreements. In February 2026, the United States convened the Critical Minerals Ministerial and launched FORGE, a new international forum succeeding the Minerals Security Partnership, with the Republic of Korea chairing. The US International Development Finance Corporation has invested over $1 billion in critical minerals projects, including $600 million in a cobalt consortium in the Democratic Republic of the Congo and $565 million for rare earth extraction in Brazil.

These are not marginal adjustments. They represent new trade flows between countries that, until recently, had limited bilateral economic relationships. A decade ago, most trade promotion agencies would not have needed a position on cobalt supply chains or hydrogen export corridors. Now, some of the most consequential commercial relationships being built globally run through these commodities.

Green hydrogen and ammonia tell a similar story. Saudi Arabia's NEOM project, backed by Air Products and ACWA Power, aims to produce 1.2 million tonnes of green ammonia per year from 2026 using four gigawatts of renewable power. South Africa's Hive Energy project targets 800,000 to 900,000 tonnes. Australia is building hydrogen export partnerships with Japan, Singapore, and South Korea. The green ammonia market is projected to grow from $720 million in 2025 to $178 billion by 2035.

The supply-chain concentration makes this urgent. In 2025, the Democratic Republic of the Congo accounted for 74% of global cobalt mine production. Indonesia held 67% of nickel production. China controlled 69% of rare earth mining and dominated refining for lithium and cobalt. Diversifying away from that concentration is the stated goal of FORGE, and the implicit commercial opportunity for trade agencies with the right expertise.

On the market projections above, the agencies that move early hold a position in flows that grow by orders of magnitude before 2035, while the ones that wait find that commodity-trading houses, development finance institutions, and sovereign wealth funds have already built the relationships.

S&P Global Market Intelligence, tracking private-market transactions, put sovereign wealth fund deal value at $199.9 billion in 2025, up 198% from $67 billion in 2024. Nine of the ten largest SWF deals that year were co-investments alongside private equity firms, and between 50% and 60% of sovereign wealth fund investments are now direct or co-investments, executed by in-house sector teams rather than through fund managers.

This matters because sovereign wealth funds are, by some measures, the most significant pool of long-term capital available for foreign direct investment. When a sovereign fund decides to build a data center, acquire a port concession, or invest in a battery supply chain, it deploys capital at a scale most corporate investors cannot match. And it does so without calling the investment promotion agency.

SWFs have their own sector teams, their own deal-sourcing networks, and their own political relationships. They know what they are looking for, and they do not need a brochure or a webinar. They are, in effect, self-directed FDI.

This does not make IPAs irrelevant to sovereign capital, but it changes the nature of the relationship. The traditional IPA function of marketing the jurisdiction and responding to inquiries does not work with a counterpart that already has more information than the agency does. What SWFs need from a jurisdiction is permitting certainty and co-investment structures.

The global location intelligence market reached an estimated $25 billion in 2025 and is projected to reach $47 billion by 2030. The broader geospatial AI market is growing from $60 billion to a projected $472 billion by 2034. AI-powered site screening can compress a process that once took six to eight weeks into three to five days.

For practitioners, this changes the value proposition of an investment promotion agency in a specific way. The traditional role was, in large part, an information-brokerage function. The agency knew things about the jurisdiction that the company did not: available sites, labor-market data, utility capacity, regulatory requirements, incentive programs. The agency's value was in aggregating and presenting that information persuasively.

That information advantage is eroding. Companies access labor-market data, utility rates, tax structures, real estate availability, and regulatory benchmarks through commercial platforms. A site-selection consultant with an AI-powered tool can evaluate a jurisdiction in less than a week without ever speaking to the IPA. The analytical work that used to differentiate a good trade commissioner is increasingly table stakes.

What algorithms cannot easily replicate is tacit, relational, and political knowledge: which permits move quickly and which stall, and what the timeline for an infrastructure project is against the official one. This is local knowledge. It comes from being embedded in a community, and it cannot be scraped from a database.

Agencies that recognize this shift will invest less in glossy data portals and more in the depth of their field staff's local knowledge. They will spend less time producing reports and more time building relationships with local stakeholders who can deliver on the promises the agency makes. The risk for practitioners who do not adapt is not that AI replaces them, but that it renders their most visible work (the brochure, the data package, the webinar) redundant, exposing whatever value is left underneath.

UNCTAD data shows that in some industrialized regions, up to 70% of investment comes from the existing investor base. Companies that are already operating in the jurisdiction choose to expand, reinvest, or establish additional operations. This makes reinvestment the single largest source of FDI in mature economies.

Yet most investment promotion agencies allocate the majority of their resources to new attraction. Marketing campaigns, trade missions, investment conferences, and lead generation dominate budgets and staff time. Aftercare, when it exists at all, is typically a small team handling complaint resolution and permit issues for established investors.

The return on aftercare investment is almost certainly higher than the return on new attraction. Existing investors already know the jurisdiction. They have infrastructure and relationships. The cost of persuading them to expand is a fraction of persuading a new investor to enter. They are also the jurisdiction's most credible sales force: a satisfied existing investor who speaks positively about the business environment is more persuasive than any marketing campaign.

Despite this, aftercare remains what one industry analysis describes as "usually not a key function" in most agencies. Resources go to new attraction because new investments generate announcements, and announcements generate political visibility. Expansions by existing investors are rarely announced with the same fanfare, which means they are under-valued in the metrics agencies report to their political sponsors.

Fixing this requires agencies to build systematic aftercare programs, investor-satisfaction tracking, and expansion-pipeline management for their existing base. It also requires a change in how success is reported. If agencies tracked and publicized reinvestment rates with the same prominence as new attraction numbers, political sponsors would value aftercare differently. The best agencies treat their existing investor community as an advisory board: regular check-ins, and early warning systems for problems.

None of these ten rewirings require the profession to disappear. All of them require it to change what it does and how it measures success.

The investment landscape has concentrated into strategic sectors that demand technical specialization. The institutional environment has layered security mandates onto promotional ones. And the most productive source of investment, reinvestment by firms already in the jurisdiction, remains systematically under-resourced.

The agencies that adapt will rebuild their scorecards around value captured rather than jobs announced, and shift resources from awareness to facilitation.

The claim is testable. If UNCTAD's next World Investment Report shows the strategic-sector share of greenfield project values falling back toward its 2020 level of 16%, and if the OECD's next agency survey records mandates per agency dropping below the 4.8 it counted in 2017, then what is described here was a cycle rather than a rewiring, and the agencies that waited were right to wait.

The agencies that do not adapt will not necessarily fail. Some will persist on institutional inertia and political connections. But they will become less useful to the firms and investors they are meant to serve, and less relevant to the economic outcomes they are meant to produce.