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Location attractiveness

Location attractiveness. Project “Welcome to the business land“, LT-PL-2S-190. BUSINESS IN LITHUANIA. The aspects of coutry attractiveness for business development assesment.

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Location attractiveness

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  1. Location attractiveness Project “Welcome to the business land“, LT-PL-2S-190 BUSINESS IN LITHUANIA

  2. TheaspectsofcoutryattractivenessforbusinessdevelopmentassesmentTheaspectsofcoutryattractivenessforbusinessdevelopmentassesment • Countrywill be attractiveforinvestorsonlyiftheprofitearnedwill be biggerthaninvestedcapital. Thatiswhyinvestorshave to measurethe risk ofchoosing a certaincountryandif it issuitablefortheownersofthecompany. • The selection of new locations for business development is mainly influenced by a combination of factors: costs, access to consumers and markets, quality, availability of information and resources, etc. Changes in the taxation system, social policy innovations, labour cost and availability, political stability, economic and financial crises, i.e. the economic, political and social environment where business or investment is planned are equally important. • It should be emphasised that the attractiveness of a location for business development is influenced not only by local authorities but also by the geographic, natural, infrastructural, technological, demographic, sociocultural conditions of the location as well as economic entities operating there. The concept of location’s attractiveness for business development encompasses not only investment but also business development by legal as well as natural persons.

  3. Factorsofcountryattractivenessforbusinessdevelopment • Location’s attractiveness cannot be described by one major factor; therefore, a number of different factors of attractiveness are identified and included in indexes used to assess the attractiveness of certain locations (countries, regions or cities): • Basic factors (infrastructure, accessibility, climate, natural resources, etc.) • „Soft“ factors (intelligence, knowledge-driving, learning, networking, innovations, agility, sustainability and digitalization factors) whichencompass also smart operation of economic entities (private and public sector), which give them a competitive advantage over other entities.

  4. Factorsofcountryattractivenessforbusinessdevelopment • Countryattractiveness-forming factors are distinguished into two categories: static and variable. • Staticfactors include the factors that cannot be replaced and characterize a specific identity of the region, that is: the geographical location (f. e. a cross-border region, etc.), size, importance at the international level , available natural resources (production resources, tourist resources). • The rest of the factors are variable, i.e. they are formed or created for gaining or maintaining the attractiveness: the quality of the living environment, physical infrastructure, demography, employment, viability of the business sector, availability of educational infrastructure, the public sense of community, the sufficiency of social and health care services.

  5. Keyfactorschoosinglocation

  6. Keyfactorschoosinglocation • Resultsofentrepreneurs‘ surveysallowto determine the main factors promoting business development and investment: • The main factors attracting entrepreneurs: availability of qualified labour, fast document processing in the municipality, affordable real-estate purchase/lease prices, cheap labour, personal contacts and levelof competition in the market (ifuntapped marketexists). • The following factors had a weak influence on making the decision to start business or invest incertainregion: land and real-estate taxes lower than average, a well-developed road infrastructure, closeness to foreignmarkets, image of the region, qualityofconnection with the biggest cities. • The following factors that had no influence on their choice to start business incertainregion: multimodal transport possibilities, simplified document processing, flexibility of municipal institutions considering the investor’s requests, operations of big market players in the region, support and consultations on business starting, development and investment issues, clear and stable business development strategy of theregion, land lot buying possibilities, multiple real-estate purchase/lease offers, availability of natural resources required for business operations.

  7. Keyfactorsinfluencingchoiceofcertainlocation • Economic: the number of citizens and its change, age structure of residents, the level of income, natural resources, manufacturing according sectors, local currency and its stability, inflation rate, volumes of import and export, the tendencies of the sector in which it is planned to invest, international debt, urbanization level, market potential. • Political, legal and tax policy factors: political stability, institutional infrastructure, participation in international organizations, laws of private property, level of FDI, number of international transactions, trade limitations, tax system, economic and technological zones, free trade zones, level of competition, patents and protection of inventions, corruption, bureaucracy, cartels. • Economic infrastructure: sufficiency and quality of telecommunications, transport infrastructure (roads, highways, availability of air, water and railway transport), availability of energetics infrastructure. • Demographic factors: average age of residents, average of lifetime, social disparities, level of education, consumption habits and traditions. • Social infrastructure: availability of health care services, number of insurance companies and infrastructure, availability of accommodation services, number of restaurants, cafes and other nourishment entities, cultural infrastructure. • Social and education factors: number of schools, universities and colleges – their availability and quality of services provided, number of science and technological parks, level of cooperation and networking with business. • Quality and quantity of labor supply. • Technological progress and penetration, innovation infrastructure. • Cultural factors: religion, social values and attitudes, customs and behavior, esthetics and education.

  8. About the project The project “Welcome to the business land“ (LT-PL-2S-190) is aimed at showing the border region youth that Business can be simple, if you have a good idea, some support from professionals and general knowledge on business processes. During its implementation, it is planned to organize business leader’s competition and International Economic Forum and to activate partnership of project beneficiaries and social partners (schools, business companies, professional development centers). This training material has been produced with the financial assistance of the European Union. The contents of this training material are the sole responsibility of PI PVC and “Euroregion Niemen” Association and can under no circumstances be regarded as reflecting the position of the European Union. Total projects size is 49 973, 25 EUR. Out of them co-funding of European Regional Development Fund is 42 477,25EUR. • This project is Partly financed from the European Regional Development Fund • Interreg V-A Lithuania-Poland cooperation programme www.bonusLT-PL.eu

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