Over the past decade, the United Kingdom has remained “Europe’s top recipient of foreign direct investment (FDI) projects”, a report by Ernst and Young has revealed, with the North West coming out ahead of London and the South East to secure the highest number of jobs from foreign investors in 2012.
Ernst & Young’s annual attractiveness survey detailed that the North West alone drew in 5,572 jobs, a 50% increase on the 2011 figure of 3,715, despite the abolition of the North West regional development agency.
The report highlighted the UK’s ability to secure more investment and higher market share of projects across the whole of Europe last year. 2012 saw a 2.6% rise in the number of projects coming into the kingdom, which was achieved against the backdrop of the first decline in projects across Europe since 2008.
Among these initiatives was the £400 million purchase of Battersea Power Station in London by a Malaysian consortium last year. The development project looks set to create 13,000 new jobs over the coming years. Car giants BMW and Nissan have also pooled investments into their UK manufacturing plants, with BMW investing £500 million into the production of the next generation Mini in Oxford.
“These figures suggest that – despite the UK’s relatively sluggish pace of recovery from the recent downturn – the Government’s efforts to enhance the country’s attractiveness in areas such as taxation, trade missions and support for SMEs are going down well with cross-border investors,” stated the firm in its announcement of the report.
The firm’s research concluded that overseas companies “believe the UK has made advances in a number of areas over the past year”, which include improvements in the country’s financial flexibility, policy regime for start-ups, and entrepreneurial culture.
Minister of State for Trade and Investment, Lord Green, has remarked that despite the effects of economic uncertainty on world markets, “the ongoing strong flow of FDI continues to have a transformational impact on the UK, helping to create and sustain a globally attractive, highly competitive and truly international economy.”
The report noted the UK’s lead in fast-growing business services, in addition to software and financial services. It added that although projects from the financial services industry are presently witnessing a decline, “overseas companies expect this to be the number one sector driving UK growth in the coming years – suggesting the UK is well-placed to capture any upturn”.
Highlighting the UK’s key strengths, the firm noted that the UK must now work to sustain its leading position in foreign investment by enhancing its offer to foreign investors, particularly continuing its position as European destination of choice for investors in the United States.
The firm emphasized the need for the country to define a strategy for focusing its efforts in terms of sector, function and region. “Now is the time to act, while the UK is still leading the way as Europe’s top FDI location,” said the firm.