Page 34 - FDI Alliance International Magazine. Spring 2021 Digital Interactive Issue

THE AI TRANSFORMATION - RESHAPING

INVESTMENT ATTRACTION

The million-, or billion-dollar question for investment attraction professionals lines. For example, what would it mean if a company has applied for an
in the 21st century is: How do I sort through thousands of target companies, unusually high number of patent applications or has a growing pension
located around the world, to find the right ones that are truly serious about plan? Would these signals be as important? And if so, why?
investing in my region?
The fact is, there are hundreds of data points that could be indicative of
So how do modern EDOs cut through the noise and corporate chatter firm-level expansion and hundreds that may not. The challenge is gathering
to find the leads worth investing time in? Like poker players, expanding all the data and making sense of it. Unfortunately, the human brain cannot
companies have tells. Knowing how to spot these tells and put them into process hundreds of data points across thousands of companies on an
context with all the other signals they send out is what will determine success ongoing basis.
or failure of EDOs in the digital era. In this article we will go over how artificial
intelligence can help process and decipher the “signals” companies send ■ CUTTING THROUGH THE NOISE TO MAKE ACTIONABLE
out, both intentionally and unintentionally, that are indicative of a company's INSIGHTS
likelihood to expand. This is where artificial intelligence can become the investment attraction
professional’s best friend. The days of “dialing for dollars” and cold-
■ GAZELLE HUNTING emailing to a list of unproven prospects are over. For the sophisticated
As a business development professional, you need to find companies that business development professional, trained algorithms can now tell us
are expanding. Companies with a compound annual growth rate of 20%, which companies are most likely to grow and which data signals are the
doubling in size every five years (known as 'gazelles'), generate considerable most telling. If you thought that year-over-year revenue growth alone is
job creation and R&D spending. Gazelles make up less than 1% of the most important “tell” that a company will expand its brick-and-mortar
all businesses, yet account for approximately 70% of net job creation in footprint internationally — spoiler alert — it’s not! How do I know? Because
any given year. The majority of these companies end up with 20 to 249 AI applications told me so. This has led us to revise our targeting criteria
employees. Several thousand of these fast-growing companies grow to a leading to greatly enhanced deal flow.
substantial size, employing up to 10,000 people and becoming the next
generation of iconic companies. Identifying and ranking corporate growth “tells” is the challenge of modern
economic development professionals. Developing, using and leveraging AI
So how do we find gazelles? Given how difficult it is to capture the attention tools that balance these factors together will certainly dominate the EDO
of targeted companies and executives, certainly, we’d like to avoid wasting industry for the decades to come.
time and effort reaching out to targets with no prospects for expansion. Let’s
face it, there’s no greater “shot through the heart” than finally connecting STEVEN JAST
with a prospect that has no plans for expansion.
PRESIDENT & CEO
■ CORPORATE GROWTH SIGNALS ROI RESEARCH ON INVESTMENT/GAZELLE.AI
Many corporate growth signals are evident, if you’re paying close enough
attention. A great example of this is if a company recently announces a steve@gazelle.ai www.gazelle.ai
successful round of later stage VC funding or significant increases in hiring.
Other signals you need to listen for more carefully and read between the www.researchoninvestment.com
34. FDI ALLIANCE INTERNATIONAL