Investment recipient countries are benefited from foreign investment from capital inflow, advanced technology, management skill and marketing advantages. All this comes through the linkage between the Foreign Investor and the local firm, where the local firm plays the role of suppliers, customers, competitors and partners.
The local entrepreneurs create these links with the support better human resource and a conducive policy environment. The backward linkage industries facilitate the key sectors which attracts the foreign investors. Unfortunately, in reality, one of the main obstacles to foreign investment in Bangladesh is the lack of linkage industries.
A survey by OECD shows that the amount of money invested by Japan’s Kodak company in China, in cameras and film production, is 6 times higher than its own country’s investment. The main reason behind this is that the Chinese government was able to create linkage industry that is needed for KODAK company. “Singapore Approach” of Economic Development Authority’s Singapore is famous throughout the world for Facilitating Linkage.
The number of local investor or foreign investor needed to transform country to MIC by 2021 and developed country by 2041 is insufficient. To ensure higher investment growth in 7th five year plan creation of 300,000 entrepreneurs was envisioned and necessary works are underway.