UK Up To Fourth Place On List Of Nations CEOs Consider Important For Growth
A new report by EY has added weight to the argument that the UK is becoming an increasingly popular location for Foreign Direct Investment (FDI).
The Europe Attractiveness Survey by EY revealed that 40% of over 550 international decision makers said they plan to establish or expand operations in Europe in the next 12 months.
The EY survey found Germany, France and the UK tied as Europe’s most attractive investment destinations for the first time, with investors agreeing skills, sustainability, government stimulus and tax simplification all remain critical when making investment decisions.
The report supports the findings in a recent Foreign Direct Investment study by law firm Irwin Mitchell and the Centre for Economics and Business Research (Cebr). Here one of the main findings from the report was that although there was an overall decline in investment into the UK, EU investors have increased their position in the country.
The figures show that while FDI from the US still dominates, there was a 10% rise in the value of investment from the EU to the UK in 2019, worth £681 billion, despite Brexit being imminent.
Irwin Mitchell’s study also recommended that UK businesses must take advantage of policies to encourage investment and improve skills; for local government to have plans to support growth and for the government to prioritise a smoother EU trading relationship.
It also includes commentary from spokespeople at a number of experts from organisations including the CBI, British American Business and foreign Chambers of Commerce.
They all highlight the positives within the UK including:
- Levels of trade and investment between the UK and China could reach previous high levels in the months and years ahead, despite the current geopolitical turbulence.
- French companies are still very interested in the UK market and the current surge in the number of firms setting up here is driven by many businesses controlling their own destiny in a post-Brexit world
- The UK‘s role as a hub for innovation across different sectors of the economy is vital for the continued growth of US & North American investment in the UK
- The ever-growing importance of the ‘green economy’ will be an underlying factor that continues to make the UK an attractive location for investment from German businesses
Expert Opinion“There are risks and opportunities for the UK as a result of Brexit and our report, coupled with the EY survey, show that FDI represents a tangible means for key components of the UK economy to prosper as we emerge from lockdown.
“The problems associated with non-tariff barriers and bureaucracy are well documented, but Brexit also provides regulatory autonomy. Factor in Freeports, new trade deals, plus Covid-19 vaccine rollout success and the UK looks set to attract more inward investment this year.
“Businesses are keen to invest into the UK to take advantage of the latest trade deals and the new situation will play a significant part in attracting FDI to these shores. Reskilling the workforce and developing infrastructure will boost the economy and stimulate the jobs market nationwide.
“In addition to the North East and West Midlands, FDI is set to benefit other regions who also rely on investment to support their expansion and develop the local labour market, while such funding will allow new, developing sectors of the economy to thrive.
“The development of the Oxford-AstraZeneca vaccine is a perfect example and is likely to see life sciences remain a major recipient of FDI - a shot in the arm for a sector in receipt of over 100 FDI funded projects in 2019/20, supporting just under 2,000 jobs.
“The value of the UK’s inward FDI position was only 0.9% lower in 2019 when compared to 2018 and its good news that despite Brexit, EU investors increased their position in the UK. This still amounts to over £1,559bn and as these reports demonstrate, with the right responses from business, in partnership with local and national government, there is much to be positive about.” Bryan Bletso - Partner