Scotland’s appeal to foreign investors has bucked the downwards trend seen elsewhere in the UK during the pandemic, according to a new report.
The EY 2021 UK attractiveness survey found that Scotland secured 107 foreign direct investment (FDI) projects in 2020, up by six per cent from 101 FDI projects in 2019.
This compares to a 12 per cent drop in the UK as a whole, which attracted 957 FDI projects last year as opposed to 1,109 FDI projects the year before.
Scotland also retained its position as the second most attractive FDI hub in the UK, with Edinburgh recording 36 projects, Glasgow 23 and Aberdeen 13. London remained the UK’s main location with 383 inbound FDI projects.
A Scottish Government spokesperson said: “These findings continue Scotland’s inward investment success story. Despite the challenges presented by the pandemic, foreign direct investment into Scotland increased by six per cent in 2020, compared to a 12 per cent fall across the UK as a whole, making Scotland the top UK inward investment location outside London for the sixth year running.
“Scotland’s leading position was underpinned by strong investment in renewables, clean technology, life sciences, fintech and agri-food. This supports the approach of the Scottish Government’s Inward Investment Plan to further internationalise the economy by focusing efforts on our existing global strengths.
“Edinburgh, Glasgow and Aberdeen all feature in the UK’s top 10 cities for attracting inward investment in 2020, while Edinburgh and Glasgow are the leading UK cities for research after London. Glasgow is also included on the list of European cities investors believe will be the most attractive over the next three years.
“This outstanding performance provides a strong base from which to build as we continue our national endeavour to transform Scotland’s economy and create high quality, secure and sustainable jobs across the country.”
The EY survey found 15 per cent of investors think Scotland, after London, is the most attractive area in the UK to invest, up from seven per cent in 2019. The UK capital had 25 per cent support.
The countries that were source of the most investment into Scotland continued to be led by the USA, with 38 of the 107 projects, followed by Ireland, with 10 and the Netherlands, with eight.
The UK came in second for FDI attractiveness in Europe, missing out on the top spot to France, for the second year in a row. Germany was third and Spain fourth.
And, despite Covid and Brexit – 43 per cent of the 570 international investors surveyed said London is the most attractive European city for investment – up from 28 per cent last year, when it trailed the 31 per cent achieved by Paris. This year, just 18 per cent of survey respondents said they favoured Paris.
The UK performance was, once again, partly based on its success in attracting investment in digital technology projects, which have accounted for the largest share of inbound FDI projects in the UK every year since 2013.
There were 322 digital technology FDI projects in the UK in 2020 – 33 per cent of all UK projects – while the country remained Europe’s leading destination for digital technology investment, albeit with a smaller share of the European market and with fewer projects than 2019.