Scotland was second only to London when it came to attracting Foreign Direct Investment (FDI), according to a new report by Ernst & Young.
In its 2015 UK Attractiveness Survey the global services provider claims that Scotland attracted 80 separate foreign investment projects last year — the third successive year the country has come second only to Britain’s capital.
Almost half of investment came from the United States, with the a ten year high of 37 companies setting up north of the border, creating jobs and boosting the country’s commercial property market.
“Scotland is punching above its economic weight, with the number of manufacturing FDI projects coming to Scotland,” commented Deputy First Minister, John Swinney.
“Combined with a rise in scientific research projects — reaching another ten-year high — and the largest number of financial FDI projects since 2006, this shows an encouraging trend towards high-value projects that recognise our highly-skilled workforce.”
The minister added that: “This is not just a positive year for Scotland, but a continuation of a pattern of competitive excellence. Over the last 10 years Scotland has secured over 37,000 jobs from FDI, a narrow second only to London and well ahead of all other parts of the UK.”
As a nation, the survey reports that Britain turned in an “outstanding performance” last year at attracting foreign investment. A record 887 projects invested in the UK during 2014 — a new record and 11 per cent up on 2013 — creating more than 31,000 jobs.
“The UK’s success was broad-based,” explains the survey. “Despite a second year of decline in business services projects across Europe, the UK grew its software and financial services sector projects, captured 35 per cent of all European headquarter moves and led Europe on research and development projects.
“The UK also achieved a leading market share of 29 per cent of US projects in Europe and was the main destination for investment in Europe from France, Japan, Australia, Canada, India and Ireland.”
Ernst & Young says its questioning of over 400 investors confirmed that confidence in Britain’s attractiveness remains high. The UK was ranked fourth globally, behind the US, China and India, when investors were asked to name their first-choice investment destination.
It did sound a note of caution, warning that the upcoming referendum on European Union membership is a “major risk” to FDI. “Stability and political predictability feature prominently in the list of desirable attributes mentioned by investors, and the UK has traditionally scored very well in this respect,” it reported.
“With 72 per cent of investors citing access to the European single market as important to the UK’s attractiveness, the referendum has the potential to change perceptions of the UK dramatically, posing a major risk to FDI — our survey indicates that 31 per cent of investors will either freeze or reduce investment until the outcome is known.”
