Account management in the context of inward investment and economic development.
Inward Investment is a key function in economic development. Attracting new investment into a location creates jobs and contributes to the growth of the locality.
However, inward investment is a very competitive scene, with cities, regions, countries all looking to attract the next large investor or big brand to both contribute to the economy and add credibility to the promotion of the area.
This is also a challenging and potentially costly activity with having to proactively target and engage with potential investors across the globe, sometimes delivering projects with a relatively small number of jobs or capex investment from brand new investors.
Successful Inward Investment promotion agencies have put more emphasis on account management and investor development of their existing investors in order to increase return on investment.
What is account management?
Account Management is a strategic approach to building and nurturing relationships with clients to drive revenue and growth for a business. Account managers are responsible for providing exceptional customer service, identifying and addressing client needs, and creating value that keeps clients returning.
Account management is, however, often underrated and sometimes ignored as a function for inward investment. DBT statistics show that between 2018 and 2023, on average 60% of inward investment projects came from existing investors. The projects from existing investors also tend to be larger in terms of job creation and capital expenditure. France which is one of the most successful countries for inward investment in Europe, generated on average 64% of the job creation from expansion projects, compared to only 30% for the UK. (EY EIM data 2024).
There is therefore plenty of scope to increase account management activity in the UK. Done well, account management provides the more profitable form of inward investment activity, as it tends to create a larger amount of jobs per project, continues to embed the business into the local economy, and has the potential to further develop local skills and supply chains. Developing strong, trusted relationships with a business will deliver value for both parties.
Benefits and risks of account management
Scotland is the most successful region for inward investment in the UK after Greater London. It is not surprising to see that 67% of their inward investment projects came from expansions in 2023. (EY EIM 2024). Scottish Enterprise is one of the most successful organisations delivering account management in the UK. Their 2021 evaluation report detailed the considerable wider economic benefits and impacts of this activity with an additional £500 million or £0.7 million in turnover per company; an additional 4,487 jobs, an average of 6 per company; an additional £143 million in exports, an average for the exporters of £0.3 million; an additional £65 million spend on Research and Development, an average of £0.1 million per company; and an additional £84 million in capital expenditure, an average per company of £0.1 million. Positive impacts were also reported on such metrics as profitability and labour productivity. Estimated net impacts over 5 years included GVA of £1,112 million.
Conversely, poor account management carries a reputational risk for the organisation or the locality. Businesses that don’t get value out of their account management meetings will tend to disengage from local relationships and could feel more isolated, potentially increasing a risk of relocation outside of the area. It is therefore important to ensure that the account management targets are set properly for the team in order to drive quality rather than quantity and focus on delivering value to the investor.
Conclusion
In conclusion, delivering a high-quality account management function will increase the propensity for businesses to invest in the area, adding valuable economic benefits to the locality. Businesses benefiting from quality account management could also act as ambassadors to support the promotion of the region.