Mercury Advisory Group consultants consult frequently on healthcare projects around the world that are either initiated to attract foreign direct investment (FDI) or as experts on projects that have been initiated as a result of the foreign direct investment in a region.
The New Breed of Investors
China came in third among the world’s top 20 investor economies, behind only the US and Japan. We’ve seen evidence of this on our projects in Nigeria, where in Anambra State, steel manufacturing plants, 5-star hotel resort complexes are entering the region bringing jobs and a percentage of skilled workers as part of the deal. For a state that is lacking adequate healthcare facilities for its existing citizens, this presents a few challenges. Until healthcare investment catches up, the new workers will heavily burden the already scarce resources. There will also be impacts in urban and regional planning.
In some cases, these investors choose to build work site health centers that are for the private use of their employees and dependent family members. In those projects, we are called upon to consult on the development of the work site health and wellness facility, set up or supply interim clinic management and staffing, assist with needs analysis and programming and/or equipment selection, and commissioning and accreditation of the facility itself. These projects often don’t benefit the community at large, except that labor forces from the community will become employed and then have a private clinic at international standard, available to them and their families.
China is aggressively developing natural resources and infrastructure from Africa to the Middle East, but we’ve also seen hints of Chinese investment in Greece, Turkey, and parts of Eastern Europe. You have to know what to look for to see it, and the first hint to me is when I see huge non-tourist passengers on flights to unlikely places as we travel around the globe on client projects. A little research with the appropriate government agencies points me in the direction of what’s happening, and my training and experience tells me what’s likely to follow.
Demography as an indicator
In aging populations, a shrinking workforce and a lower rate of return on investment can be one of the many factors that are weighed to help investors decide where to choose to invest. On the other hand, economies with skilled, young workers with a strong work ethic that also consume products can influence investor decisions. It will be interesting to see how China maneuvers around this — with a rapidly aging population in a developing nation.
Investors from emerging markets companies seem to prefer mergers and acquisitions over greenfield investment as a mode of entry. As we work on international development projects in healthcare, some of the existing facilities are actually too old to be salvaged, but the land may be the attraction for the merger or acquisition.
With greenfield projects in developing and transitioning nations, often the infrastructure (availability of dependable power and pipe-borne water, for example) already installed at the site makes an acquisition or merger more attractive than a greenfield site that is currently a yam field supplied by ditch water to be converted into a healthcare facility.
