What actually puts a country on an investment committee's agenda

There is a comfortable assumption that capital finds opportunity — that a market with good fundamentals will eventually attract the companies that should be there.

It does not work that way, and the mechanics of how a country actually enters consideration are worth setting out plainly, because they explain a great deal about why some markets are crowded and others are not.

The channels that actually work

An existing customer asks. The most common route by a wide margin. A company follows its customer into a market rather than choosing the market. This requires no market assessment at all and it is how most first entries actually happen.

A competitor moved. The second most common. Competitive response is a far stronger motivator than opportunity analysis, and it moves faster.

Someone senior has a personal connection. Uncomfortable but true. A board member with family ties, an executive who worked there once, a founder with a friendship — these generate consideration that no data set would.

A specific transaction appears. An acquisition target, a distributor looking for a principal, a tender. A concrete opportunity gets evaluated; an abstract market does not.

A supply constraint bites. The company needs an input, a production location or a labour pool it cannot get elsewhere, and it searches until it finds one.

The channels that do not work

Investment promotion materials, in general. Country rankings, which are read to confirm decisions rather than to make them. Conference presentations to audiences who are already interested. And general economic data, which nobody seeks out for a country they have not already started thinking about.

This is not a criticism of promotion work — it matters at the stage after attention already exists, in reducing the friction of an entry already contemplated. It just does not generate the initial consideration.

What follows from this

For a country: the highest-value activity is making the existing foreign presence successful and visible, because a satisfied operating investor is the most effective channel there is. Every one of them is telling their peers something, and what they say determines what those peers do. Attracting the first entrant into a sector is worth more than any number of promotional efforts, because the first entrant creates the competitive response that brings the second and third.

For a company: recognise that your consideration set was assembled by these channels rather than by analysis, and that it is therefore biased in predictable ways. The markets you are not looking at are not markets that failed an assessment. They are markets that never received one.

Deliberately assessing a market that arrived through none of the channels above is one of the few genuinely contrarian moves available in corporate strategy, and it is available precisely because so few organisations do it.

The Ukrainian application

Ukraine has weak coverage on every one of the working channels. Limited foreign corporate presence generating referrals, thin competitive pressure to follow, few personal connections in most European boardrooms, and an advisory ecosystem that is small relative to the market size.

That is the whole explanation for the attention gap. It is not a verdict on the fundamentals, and it is why the fundamentals are worth checking directly rather than inferring from how much attention the country receives.

Related in this archive

• Ukraine in the Baltic and Nordic business conversation: a different set of assumptions
• Industrial parks: the incentive regime, and whether it works
• How to read a country report without being misled by it
• Ukraine Annual Review 2017: growth returns and the constraint changes

A country gets onto an agenda not through what is written about it but through the presence of somebody whose business there is already working. Defending my own investments I have used the same channel: not a report but a working example. What Ukraine lacks is not attention — it is that the companies already making money here do not say so loudly enough.