The new way of selling Wales
FACTORS such as the Brecon Beacons, Welsh National Opera, the Millennium Stadium and Catherine Zeta-Jones can now make a real difference in helping to bring investment to Wales.
It is so called soft-factors, like whether a location has an excellent track record in sport or architecture, as well as being blessed with a good climate, which are increasingly influencing executives when deciding where to make fresh investments.
Research by the Communication Group, sponsored by the Welsh Development Agency, show that corporate investment executives are finding it harder to differentiate between locations, as the economic support on offer is becoming more homogenised.
This is leading executives to assess softer factors to help them reach a decision, say, on whether to locate a new financial services company in Cardiff, Dublin or Barcelona.
The research, entitled Why it matters to be different, included in-depth, one-to-one research with investment decision-makers in 22 international companies.
Its findings show that 55% said they find it difficult to differentiate between locations on the basis of hard or economic factors, such as staff costs and regulation.
Moreover, 60% of executives questioned said that soft factors such as architecture and culture have become more important in the last five to ten years.
When asked to highlight factors which they believe make an ideal investment destination, having a strong tradition in culture and the arts had a 60% response rating - far higher than having attractive labour legislation (32%) and favourable employer legislation (30%)
A strong economy was ranked first at 68%, but also noted were an agreeable climate and environment (67%), exceptional architecture (50%), sporting excellence (26%), with celebrities in music, film and fashion also registering with 22%.
Chief executive of the Communication Group, Michael Hayman, said, "Our research shows that it is increasingly difficult to differentiate between investment locations [65% of respondents].
"Of these, 92% said that as a result the image and profile of a location is becoming more influential in their decision-making.
"In a crowded and competitive market place, a destination brand is a must-have. Moreover, our research found 85% of investment decision-makers want to invest in a place whose values reflect that of their own company."
The research reinforces that hard factors like staff costs continue to be the bedrock on which investment decisions are made. However, it concludes that as more countries meet similar business criteria, the differentiation will move "irrevocably to the possession of intangible assets".
The research also highlights the "human instincts" of investment decision-makers. Mr Hayman said, "Is it so shocking that one senior interviewee told us that it is quite common for one city to lose out... because the wife of the chief executive has relatives in the area or the finance director studied there?
"Would it be so surprising to learn that Swansea-born actress Catherine Zeta-Jones might play a powerful part in the future commercial identity of Wales in a more compelling way than, say, the availability of long-lease office space?"
In the report Sean Young, managing director of Locum Consulting, examines how excellence in sport and the arts can transform locations.
"The archetypal example of this is the Guggenheim museum in Bilbao. Its breathtaking architecture and the museum's content helped transform this ageing city, mostly known for its declining heavy industries, into a modern city on the international map.
"Major sporting events also provide a showcase for a city/region to attract investors. But more than that, they are an opportunity for destination marketers to define (or redefine) what their place is about."