Shifting gears in uncertain times: How Investment Promotion Agencies balance evolving mandates and limited resources

While attracting and retaining investment has long been the core business of IPAs, their roles are rapidly evolving. Traditionally, the focus was on informing potential investors about their countries’ opportunities and business climates. Rising geopolitical tensions, shifting tariff regimes and disrupted supply chains have made this mission more complex and competitive than ever. The climate crisis, rapid digitalisation and widening inequalities are also reshaping investment priorities and the expectations placed on IPAs. Attracting FDI remains their core function, but it is now only one among several objectives. Meeting new demands is particularly challenging in a context of constrained resources and evolving institutional roles.

While the defining mandate of IPAs remains investment promotion and facilitation, many IPAs are embedded in broader economic development agencies that also integrate trade, innovation or entrepreneurship, among others. Agencies devoted solely to investment promotion are now uncommon, with only three out of 37 operating in that way.

The scope of responsibilities across OECD agencies is quietly broadening, with the average number of mandates rising from 4.8 in 2017 – when the first edition of survey was taken – to 5.4 in 2025. Of the fourteen mandates included in the survey, ten have expanded since 2017, suggesting that IPAs are carrying a heavier and more diverse workload. For example, export promotion now features in 62% of agency mandates up from 56% in 2017, innovation promotion has grown from 53% to 57%, and regional development from 47% to 59%.

These adjustments are often absorbed within existing structures rather than through major reforms. On average, agencies have undergone just over two formal organisational changes over the past decade, yet most mandate shifts occur informally. As a result, new roles are integrated in practice even when not reflected in law: an IPA’s founding framework may not mention innovation or regional development, yet both have become part of its effective mission.

When formal reforms do take place, they can be transformative, introducing entirely new areas of work. In some cases, this has meant taking on domestic investment promotion alongside FDI; in others, building capacity for talent attraction, managing strategic financial partnerships, or supporting mergers and acquisitions. These examples show that while the average IPA may appear stable, individual agencies can evolve rapidly when national priorities demand it.

Less common but expanding mandates reveal shifting patterns. For instance, the promotion of responsible business conduct has grown from 9% of IPAs in 2017 to 14% in 2025. Similarly, the management of special economic or free trade zones has risen from 3% to 8%, while tourism promotion has doubled, from 12% to 24%. These areas reflect evolving policy goals, from ESG integration to regional diversification and the attraction of climate-aligned investment. They are not yet widespread, and the question remains whether IPAs will integrate them proactively or only once responsibilities are formally transferred from other public bodies.

In contrast, some mandates remain unchanged. Outward investment promotion is a good example: in 2017, 29% of IPAs had this mandate, and in 2025, the figure is almost the same at 30%. Unlike export promotion, which is now common across OECD IPAs, outward investment remains less prevalent, even though both functions aim to support the internationalisation of domestic firms.

The evolution of mandates has not been matched by equivalent increases in resources. On the surface, IPA budgets seem to be expanding. Between 2019 and 2025, the average total budget of OECD agencies rose from USD 110 million to USD 191 million in nominal terms, with allocations devoted to their core mandate – i.e. investment promotion and facilitation – increasing from USD 29 million to USD 39 million. Once adjusted for inflation, however, the picture is different. In constant dollars (2018), total budgets rose by 38%, yet specific funding dedicated to investment promotion mandates fell by 22%. 

Today, on average, only around 15% of IPA budgets are devoted to their core mandate, and nearly three-quarters of agencies have seen their investment promotion and facilitation budgets shrink. Unsurprisingly, just one in four IPAs believes it has sufficient resources to deliver fully on its mission. In some cases, political decisions and funding pressures have even led to agency closure. 

Staffing trends reflect these same constraints. The median OECD IPA employs 277 staff, up from 135 in 2017, while managing roughly five mandates. However, these averages conceal striking diversity.

To better understand how IPAs manage their human capital, agencies can be grouped into a simple typology based on staff size and breadth of mandates. This typology illustrates how some IPAs spread resources across multiple roles, while others concentrate capacity on a narrower set of responsibilities. Specifically: the majority – roughly 35% – are small but focused (small specialists), 27% are large and wide-ranging (large generalist), 22% are large but focused (large specialist), and the remaining 16% are small generalists. Notably, no regional patterns emerge, as agencies within the same region can fall into very different categories, reflecting diverse national priorities and organisational choices.

Whether broad or narrow, what matters is not how many mandates an IPA performs, but whether those roles are strategically chosen and adequately resourced. Some agencies are evolving into multi-mandate hubs, integrating trade, investment, innovation, and talent attraction into a single strategic framework. Others have split from broader entities to sharpen their focus on investment promotion. Different organisational models can succeed, but all require a clear sense of purpose in a resource-constrained environment. This includes not only refining investment strategies, but also ensuring operational efficiency, avoiding duplication with other public bodies, and focusing on the areas where the agency delivers the greatest value.

Achieving this clarity is not only about current priorities, but also about preparing for what lies ahead in a changing world. Scenario-planning and foresight exercises – such as those conducted under the OECD IPA Network – can help agencies anticipate shocks and explore multiple possible futures. This proactive approach allows IPAs to translate external pressures, including geoeconomic uncertainty, into strategic resource allocation, updated future priorities, and actionable investment promotion strategies that shape outcomes instead of simply reacting to them.

The full results of the survey will be published in the second edition of the Mapping of Investment Promotion Agencies in OECD Countries to be released in 2026. This report will provide a detailed analysis, fresh insights and comprehensive benchmarking on the structures, strategies and practices of IPAs across OECD countries, supporting IPA reform and strategic planning.