#2 Regions of Influence – Premium Edition

Regions of Influence – Premium Edition

Newsletter on economic development, investment promotion, and corporate expansion

Edition: May 3, 2025

Price: €7.99 | regionsofinfluence.com

Editorial: The Rise of Non-Urban Regions of Influence

Why are so many industrial and tech investments moving away from big capital cities?

• More aggressive public incentives in peripheral regions, where governments offer land, tax breaks, and subsidized infrastructure to attract jobs and combat depopulation.

• A more distributed logistics network, driven by multimodal corridors and the rise of regional supply chains (reshoring).

• A quest for better quality of life and access to young talent, which is fleeing the high costs and congestion of megacities.

• Technological decentralization, where access to cloud, AI, and automation allows operations from anywhere on the map.

This doesn’t mean big cities will disappear as power nodes, but they are losing their exclusivity as destinations for high-value investment.

International proof points support this thesis:

• In France, the “Territoires d’industrie” project has mobilized billions to create industrial hubs in mid-sized cities like Angoulême, Le Creusot, or Alès.

• In the US, states like Texas, Tennessee, or Arizona are attracting industrial investment that a decade ago would have gone to New York or California.

• In Japan, several tech startups are relocating to mid-sized cities like Fukuoka or Sapporo due to lower costs and proximity to technical universities.

• In India, the government is investing in new hubs like Hyderabad and Ahmedabad instead of overloading Mumbai and Delhi.

• In Chile, cities like Temuco and Puerto Montt are attracting agro-industrial and tech investments with state support, breaking Santiago’s historic centralism.

We must rethink a central idea: economic magnetism is no longer exclusive to financial centers or national capitals. We are witnessing a territorial reconfiguration, where Regions of Influence are expanding, multiplying, and competing across multiple scales: global, national, and subnational.

What starts as a small innovation hub in Castellón can become the seed of broader transformation. But beware: as your book rightly warns, these projects must avoid falling into the trap of poorly designed incentives that create dependency without sustainability, or clusters without real economic tissue. Territorial development must be born from strategic vision, not from a pile of empty subsidies.

Returning to our thesis: companies compete, and where they settle is where economic development happens. The role of regional governments is to ensure a transfer of development—from economic to human.

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Top RFPs and Expansion Announcements (April 11 – April 30)

Africa

• Country/Region: Nigeria

• Event Type: Tax incentive (new scheme)

• Sector: Multisectoral (agriculture, manufacturing, infrastructure)

• Brief Summary: Nigeria is launching a new Economic Development Incentive (EDI) program to boost investment in key sectors, replacing the previous “Pioneer Status” scheme, which had proven ineffective. The new EDI scheme offers tax credits equivalent to 5% annually over five years (25% total) for qualifying investments. However, for energy and utility projects, a minimum investment of 200 billion naira is required to qualify.

• Source: regfollower.com (Presidential Fiscal Policy Committee of Nigeria / Regfollower)

• Date: April 22–25, 2025 (announced during a policy forum in Lagos)

• Strategic Commentary: Nigeria aims to link incentives directly to real investments, correcting flaws in the previous regime. This is a smart incentive design: companies only receive tax benefits if they deliver tangible investment, which strengthens accountability and could drive genuine development in strategic sectors. However, the high investment threshold—especially for infrastructure projects—might limit which companies can benefit, potentially excluding SMEs. In essence, Nigeria is signaling regional influence by tying tax relief to outcomes, though close monitoring will be needed to ensure the incentive fulfills its promise of sustainable growth.

America

Country/Region: United States (Virginia)

• Event Type: Corporate expansion (with state incentives)

• Sector: Advanced manufacturing (medical devices)

• Brief Summary: The state of Virginia announced the expansion of Integer Holdings’ operations, a medical device manufacturer, in the city of Salem. The company will invest to expand its catheter plant, creating 83 new local jobs. To secure the project, Virginia approved a $350,000 opportunity fund and a $500,000 performance-based grant under the Virginia Investment Performance program, in addition to offering free customized workforce training through the Virginia Talent Accelerator.

• Source: wset.com (Office of the Governor of Virginia / WSET News)

• Date: April 15, 2025

• Strategic Commentary: This expansion shows how Virginia competes for manufacturing investment with smartly designed and clearly conditioned incentives. The use of performance-based grants and free training serves as an implicit clawback clause—public support is contingent on job creation and capital investment, aligning private benefit with public interest. Strategically, it reinforces Virginia’s regional influence in the medical-tech sector and presents a long-term incentive model. The key challenge will be ensuring Integer meets its investment and job creation targets—if not, Virginia has mechanisms in place to recover or adjust the support, preserving accountability.

Country/Region: United States (Ohio)

• Event Type: Corporate expansion

• Sector: Biopharmaceutical / Biotechnology

• Brief Summary: Multinational Amgen announced a $900 million investment to expand its biomanufacturing plant in Ohio, raising its total investment in the Columbus region to over $1.4 billion and creating an additional 350 jobs. This expansion nearly doubles the original workforce since the plant opened in 2021, strengthening Ohio as a hub for biological drug production. The governor of Ohio praised the decision, emphasizing the state’s favorable business environment, skilled labor, and strategic location for the growth of such industries.

• Source: amgen.com (Official statement from AMGEN)

• Date: April 25, 2025

• Strategic Commentary: Amgen’s investment enhances Ohio’s regional influence in the biotech industry, consolidating a biomanufacturing cluster in the US Midwest. While the announcement highlights corporate commitment, it’s likely backed by implicit state support (infrastructure, regulatory facilitation, or tax credits). This illustrates how a stable business climate can itself function as an incentive. Broadly speaking, it’s a smart incentive: Ohio secures high-quality jobs and long-term capital, while Amgen benefits from local advantages. Strategically, maintaining accountability is key—ensuring the promised 350 jobs and investment are realized, avoiding premature celebration. In regional terms, this expansion sends a strong signal in the global race for advanced pharmaceutical manufacturing, showing how a state can boost its economic influence by attracting flagship projects.

Country/Region: Paraguay

• Event Type: Industrial project (EPC contract for new plant)

• Sector: Green energy / Fertilizers

• Brief Summary: UK-based green energy firm ATOME PLC signed a $465 million definitive EPC contract with Swiss company Casale to build a large-scale green fertilizer plant in Villeta, Paraguay. The 145 MW project, powered by hydropower, will produce 260,000 tons of green ammonia (fertilizer) annually and is set to become the world’s first fully green fertilizer plant of this scale. A final investment decision is expected mid-2025, with a 38-month contractual timeline for construction and commissioning.

• Source: hydrogen-central.com (Corporate announcement from ATOME PLC / Hydrogen Central)

• Date: April 7–8, 2025 (contract signed, publicly disclosed on April 28, 2025)

• Strategic Commentary: This project puts Paraguay on the map in the green hydrogen economy, turning its abundant hydropower into industrial value. It’s a case of structural incentive design at the national level: Paraguay offers competitively priced renewable electricity (a kind of “natural” incentive) to attract foreign investment in clean manufacturing. The fixed-price, defined-scope EPC contract brings certainty and accountability—any cost or timeline overruns fall on the contractor, protecting project viability. If successful, the plant will strengthen Paraguay’s regional influence as a green fertilizer exporter, helping diversify the economy. However, risks remain: global demand for green ammonia is still emerging, and the project must hit strict milestones to secure financing (with potential clawbacks if delayed). Overall, this is a bold move by Paraguay toward a new sustainable industry—but the promised development and incentives must yield real, measurable results.

Asia

Country/Region: India

• Event Type: Competitive bidding / PPA (renewable energy with storage)

• Sector: Renewable energy and energy storage

• Brief Summary: Hero Future Energies signed a Power Purchase Agreement (PPA) to supply 120 MW of firm (24/7) renewable energy to India’s public utility SJVN. The project, awarded through a competitive tender, combines solar/wind generation with battery storage to guarantee consistent supply, and will provide power for 25 years to one of India’s northern states. In parallel, Hero Future Energies signed a memorandum of understanding with the province of Binh Dinh, Vietnam, to explore a $200 million investment in a green hydrogen plant—signaling its regional expansion into this emerging field.

• Source: pv-magazine-india.com (pv magazine / Corporate announcement)

• Date: April 7, 2025 (PPA awarded in India; Vietnam agreement announced March 28, 2025)

• Strategic Commentary: The Indian PPA illustrates how Asia is innovating in clean energy schemes: a long-term contract that incentivizes the integration of renewables with storage to provide reliable, emission-free electricity. This approach—essentially a market-based incentive via tender—drives advanced technological solutions while sharing risks and benefits between company and government. The company secures a guaranteed market, while the state ensures green power at a fixed rate, backed by performance clauses for firm energy delivery (analogous to clawback provisions if delivery fails). Hero’s move into Vietnam suggests a coordinated regional strategy, likely leveraging local incentives there, and strengthens India’s and its companies’ influence in the green hydrogen investment wave. As a broader trend, Asia is shifting from general announcements to concrete action on sustainable energy projects with robust mechanisms. The main challenge will be maintaining financial viability and fulfilling technological promises—failure could erode credibility in the green incentive model.

Europe

Country/Region: Spain

• Event Type: Public policy (increase in defense investment)

• Sector: Defense and security (military and technology industries)

• Brief Summary: The Spanish government announced a significant increase in defense spending, allocating 2% of the national GDP to security and defense already in 2025. This represents an additional €10.471 billion investment for the year, channeled through a new Industrial and Technological Plan for Security and Defense. The government has pledged to finance the increase without raising taxes or cutting social spending. This move brings Spain ahead of schedule in meeting NATO's 2% GDP target and aims to strengthen both military capabilities and the country’s defense industrial base.

• Source: lamoncloa.gob.es (La Moncloa, Presidency of the Government of Spain)

• Date: April 22, 2025

• Strategic Commentary: Reaching 2% of GDP in defense marks a strategic shift for Spain with significant economic implications. On one hand, it provides direct stimulus to the national defense industry (shipyards, aerospace, cybersecurity), potentially creating high-skilled jobs and driving technological innovation. From an incentive design perspective, the plan promises not to divert resources from other sectors, signaling a political bet on “more security without less welfare”—though whether that balance is maintained remains to be seen, and hidden deficits could pose a risk. From the Regions of Influence perspective, this move could enhance Spain’s regional influence within NATO and the EU by shouldering more collective security responsibilities. However, the true measure of success will be accountability: whether the additional funds translate into tangible capabilities rather than inefficient spending. A poorly executed incentive in this sector could lead to cost overruns or corruption, while a well-managed one could boost both defense and economic development in regions linked to the military sector.

Highlighted Fiscal Incentives and Investment Promotion Initiatives

Spain – Rural Reindustrialization Program

The regional government of Castilla y León has launched a €63 million program to boost industrial development in 206 rural municipalities. The initiative includes grants for SMEs, self-employed individuals, and new innovative projects related to the circular economy and green technology.

USA – SelectUSA Clean Tech Zones Program

States like Colorado, Michigan, and North Carolina are rolling out combined tax credits and grants to attract renewable energy and advanced manufacturing companies to designated non-urban “Clean Tech Priority Zones.”

European Union – InvestAI Fund

The EU has mobilized €200 billion to support AI-related initiatives, including incentives to set up data centers and innovation labs outside of national capitals. Priority is given to regions with digital infrastructure and available energy resources.

Key Economic Development Trends This Month

1. Megacities are losing exclusivity as investment destinations: In countries like Spain, the United States, and Japan, more and more high-impact industrial and technological projects are being located outside of major capital cities. A clear example is Castellón’s “rural Silicon Valley,” which seeks to create an innovation ecosystem in a historically peripheral area. This trend is driven by several factors: lower land costs, environmental pressure, urban saturation, and—above all—the effort of secondary regions to position themselves as new hubs of attraction.

2. Smarter incentives: less volume, higher performance: The era of large, unconditional incentive packages is coming to an end. Regions like Ontario, Catalonia, and Bavaria are adopting smarter models: incentives tied to execution milestones, real employment impact, or environmental sustainability. We’re entering the age of performance-based incentives: if conditions aren’t met, no funds are released. This approach aims to avoid failures like Foxconn in Wisconsin or Intel in Germany, where governments overpromised beyond what they could recover.

3. Talent is decentralizing – regional universities take the lead: Public universities outside capital cities are evolving from being just educational centers to becoming true economic engines. Jaume I University (UJI) in Castellón, the University of Jaén, and initiatives like “territorial campuses” in rural areas are now connecting knowledge with the local production base. This new role positions them as key allies in attracting projects, startups, and companies that used to focus solely on Madrid, Barcelona, or Seville.

4. The real cost of operation outweighs traditional tax incentives: Factors such as energy costs, land availability, bureaucratic agility, and regulatory stability are playing a bigger role than ever in location decisions. Tech and industrial companies are prioritizing territories with a better Total Cost of Ownership (TCO)—even when those places don’t offer the highest tax incentives. The equation has changed: long-term operational savings matter more than an initial bonus with no continuity.

5. Reconfiguration of the global investment map (by region):

a. Europe – Decentralized digital hubs: Projects like AWS in Zaragoza, data centers in Aragón, and gigafactories in Germany and France reflect a shift toward building tech infrastructure outside capital cities. Still, there’s a lack of transparency regarding the incentives granted, and a growing debate on whether these investments truly benefit the local environment.

b. Americas – Green expansion in emerging territories: From Tesla in Nuevo León (Mexico) to new battery plants in Brazil and North Carolina, the Americas are emerging as a new magnet for electric mobility investments. However, political volatility and logistical bottlenecks could jeopardize the return on these megaprojects if they’re not integrated with a strong regional vision.

c. Asia – Technology clusters beyond coastal zones: India is promoting semiconductor hubs in areas like Gujarat and Telangana. Taiwan and South Korea, meanwhile, are working to diversify their production centers due to geopolitical risks. Asia is betting on reinforcing its technological autonomy by decentralizing its installed capacity.

d. Africa – Renewable energy with territorial focus: Large-scale solar and wind projects in Morocco, South Africa, and Namibia are gaining international financial backing. But without local supply chains or logistics investment, there’s a risk these projects will become “tech islands” disconnected from broader regional development.

e. Oceania – Critical resources with environmental risk: Australia and New Zealand lead in extracting lithium and rare earths essential for the energy transition. Governments have launched well-designed incentives to attract responsible investment. However, social and environmental pressures now require these regions to prove that there won’t be another boom-and-bust cycle like in the past.

Theme of the Month: A New Logic of Location

The old model of concentrated urban-industrial clusters, based on large cities, urban free zones, and financial capitals, is losing ground to a more distributed and strategic approach. Increasingly, industrial, technological, and logistics projects are emerging outside of capitals, in intermediate or even rural territories. This shift is not anecdotal; it’s a systemic response to the exhaustion of the centralist model.

Today, investment decisions no longer revolve solely around access to large markets or international airports, but rather a combination of factors that form a new territorial competitiveness equation:

1. Energy Costs and Land Availability

• Electricity prices and the ease of building large facilities have become critical factors for high-consumption industries like artificial intelligence, advanced manufacturing, and data centers.

• Zaragoza (Spain) has attracted several Amazon Web Services data centers and a large Samca complex thanks to its availability of renewable energy, affordable logistics land, and access to high-capacity power lines.

• Abilene, Texas (USA), was selected for the Stargate project, a multibillion-dollar AI infrastructure investment, due to its combination of solar energy and available land.

• Energy cost is the new form of taxation. Even with low incentives, if the electricity bill is 30% cheaper, the long-term gain surpasses any temporary tax exemption.

2. Stable Incentives with a Long-Term Focus

• Emerging territories are competing smartly: offering phased incentives with performance clauses (milestones) and clawback contracts in case of non-compliance.

• Ontario (Canada), after criticism over incentives granted to Volkswagen, has tightened its conditions: now every euro is delivered only if job creation, investment, and sustainability targets are met.

• In India, states like Gujarat and Tamil Nadu are offering five-year tax packages for semiconductor projects, linked to construction milestones, workforce training, and tech transfer.

• The new mantra is clear: no results, no money.

3. Digital Infrastructure and Logistics Connectivity

• Territories with good fiber connectivity, intermodal logistics, and local tech support are gaining ground against congested or saturated capitals.

• Porto (Portugal) has become a hub for tech startups and shared services centers, thanks to its high-capacity fiber, university talent, and local municipal incentives.

• Querétaro (Mexico), despite not being a capital, is concentrating more and more advanced manufacturing projects thanks to its network of industrial parks, proximity to a cargo airport, and railway corridors to the U.S.

• It’s no longer enough to be well-connected by air—now it matters to be well-connected by cable, by road… and by data.

4. Efficient Regulatory Frameworks and Local Governments That Don’t Deter Investment

• Many regions have realized that as important as the incentive itself is the speed at which permits, licenses, land access, and conflict resolution can be executed. The most attractive regions for investment today are those where you can go from plan to execution in months, not years.

• In Chile, regions like La Araucanía are simplifying the permitting process for forestry and agribusiness companies that demonstrate social impact and low environmental risk.

• In Germany, states like Saxony and Brandenburg have created “one-stop shops” for major industrial investments, with deadlines for each phase of the administrative process.

• Regulatory bottlenecks are being penalized by investors, even more than tax levels.

5. Result: The Logic of Total Cost of Ownership (TCO) Is Changing

• All of this leads to a key insight for any executive team: the total cost of ownership (TCO) of a project is no longer defined by proximity to an international airport or national capital.

• What matters more today is:

  • Competitive and predictable energy

  • Local technical talent

  • Incentives with clear conditions

  • Non-conflictive environments

  • Affordable land and cost of living

• Locations once seen as “second-tier” are becoming the new winners—not out of rural romanticism, but out of pure economic logic.

• What we’re witnessing is not a temporary decentralization, but a structural reconfiguration of the global investment map.

• And the regions that understand this new logic will gain influence, investment… and a future.

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