March 31, 2017
- With the arrival of more than 80 new foreign capital projects in 2016, Bogota is emerging as a regional business center.
- It is estimated that the city’s investment promotion agency attracted more than 50% of the new FDI projects to Bogota and about 45% of all jobs generated by them.
It is estimated that 2016 revenue from new foreign direct and expansion investment (greenfield FDI) in the Bogota Region amounted to USD 1.99 billion thanks to over 80 projects of companies from different countries that are expected to generate more than 7,600 new jobs.
Juan Gabriel Pérez, CEO of Invest in Bogota notes that: "With an average estimated growth of 26% in the amount of investment over the last decade, the capital of Colombia is fast becoming one of the main business centers of Latin America."
Estimates made by the Market Research & Intelligence area of Invest in Bogota show that during the period studied (2016), the United States continued to lead the list of countries of origin of investment into Bogota, with a share of 23.8% of total projects, followed by the UK, with 11.36%; Spain, 10%; and Brazil, 7.5%; among others.
Pérez explains: "By sector, the project leaders are in business services, communications, software and IT development, processed foods and consumer products activities."
Among the most prominent foreign investment announcements last year were those of companies such as Air Liquide (France, Manufacturing, USD 52 million); Endava (UK, IT, USD 6.5 million); Mercado Libre (Argentina, BPO, USD 4 million); GAES (Spain, Medical Devices, USD 3 million); HBO LATAM (United States, Creative Industries, USD 3 million); and DOKA (Austria, Building Materials, USD 1.5 million). These projects resulted from the groundwork of the City Investment Promotion Agency of Invest in Bogota.
Invest in Bogota’s efforts in 2016
In 2016, Invest in Bogota attracted 41 foreign-funded projects to the city with an estimated intention to invest USD 257 million and creation of approximately 3,440 direct jobs.
By number of projects, the United States led the list of countries of origin attracted by the Agency, followed by the United Kingdom, Venezuela, Argentina and Brazil, among other investments. By amounts invested, the leading areas were business services, medical devices, consumer products, pharmaceuticals, software & IT and construction materials, among others.
Prospects for FDI flows into Bogota
The largest proportion of the FDI received by the Bogota Region is in sectors other than commodities. According to Pérez: "The Bogota Projects are characterized by high added-value and many of them have an important component of R&D. We calculate that while in Colombia the average FDI investment percentage over the last 10 years for service activities has been 20%, yet this proportion in the case of the Bogota Region has exceeded 50%."
An analysis based on the investment intentions of potential investors in the Bogota Region identifies promising markets and sectors that will generate an additional boost to the productive bets of the economy, related to the areas of the Smart Specialization Strategy, a roadmap for the productive development of the city, led by the Bogota Chamber of Commerce. On this basis the segments with most potential to attract investment in the Bogota Region over the next few years are technology platform services; outsourcing of high value - added services (BPO/KPO); processed foods and drinks; construction materials; health services; pharmaceuticals; medical devices and biotechnology.
As far as the markets seen as having the greatest potential for foreign investment, it is hoped that the major players will be keeping Bogota on their investment radar: Brazil, Mexico, Germany and Spain, mainly. The position of the United States, which has historically been the main source of investment coming into the city, could be compromised due to the new capital internationalization policy.
The results obtained by the city in foreign investment matters will be framed in the context of an economic recovery of developed countries, the main driver in Latin America, as well as the process for achieving peace in the country, among other factors.
In 2017 Bogota is expected to maintain its position as an attractive city for doing business in Latin America and an ideal place to invest in productive projects with high added value. Invest in Bogota’s strategy, in its role as a "hunter" of strategic foreign investment projects for the city - with the support of the Mayor’s Office and the Chamber of Commerce - will be to generate increased capital flows that contribute to the economic growth of the city-region.