The Importance of Monitoring & Evaluation (M&E) in an Investment Promotion Context
23 November 2015 Category: Topical Review
One important function carried out by successful Investment Promotion Agencies (IPAs) around the world is that of continually monitoring and evaluating their investment promotion strategies. There is not much point in having a strategy if it is not monitored and evaluated during its implementation.
The truism “what gets measured gets done” does apply in practice. M&E typically has two main functions: First, to allow the government (funding agency) to check that enough is being achieved towards the overarching goals set for the IPA and to allocate resources accordingly and, second, to allow IPA management to more effectively manage the organization and its resources. Effective M&E allows the following questions to be answered:
- Whether to continue with the existing strategy
- Whether to take corrective measures to modify or update the existing strategy
- Whether to abandon the existing strategy and devise a new strategy
- Whether budget allocation and personnel changes are required
An M&E system involves answering four key questions:
- WHAT is being monitored and evaluated? This requires a clear definition of the objectives and the precise metrics or Key Performance Indicators (KPIs) to be used to assess the performance against those objectives.
- HOW are the data to be captured – meaning what form of Investor Tracking System (ITS) is to be deployed using what kind of information technology?
- WHO is responsible for carrying out the M&E? This means the organisation of the work, assigning responsibility for inputting, collecting and analysing the data and making recommendations to management for any changes required.
- WHEN is the M&E to take place? This means defining the procedures to be adopted to implement the “what”, ‘”how” and “who” along with the “when” – the frequency (daily, weekly, monthly etc.) with which the M&E inputting of data should take place.
International best practice highlights the importance of measuring outcomes and impacts rather than activities. Too often in practice IPAs seek to impress stakeholders by reference to the number of meetings held with investors, the number of promotional events held, the number of industry conferences attended, the amount of money spent, etc. These, although important, are only means to the desired ends, in other words they are merely inputs into the investment promotion process and are not outcomes.
Of much more interest and importance to stakeholders are the outcomes reflecting conversion rates. That is the IPA’s success in pursuit of its strategic priorities including, for example, how successful the IPA is at influencing prospective investors’ decisions, viz. the proportion of investor inquiries that lead to face-to-face presentations to the investors, the proportion of face-to-face presentations that lead to site visits to the country, the proportion of site visits that lead to approved projects, and the proportion of approved projects that eventually become actual investment start-ups with investment generated, jobs created and so on.