Digital projects secured from foreign investment last year grew by 74 per cent in Scotland according to latest economic figures from accounting giant EY.

The annual foreign direct investment survey showed the rate of increase far outstripped that of the UK, which rose by seven per cent and Europe which saw a decline of seven per cent.

EY Scotland’s latest annual attractiveness survey indicated that Scotland secured 14 per cent more foreign direct investment (FDI) projects in 2021 (122) compared with 2020 (107). 

In comparison, there was a 1.8 per cent increase in the number of FDI projects attracted to the UK as a whole, while the number of European inward investment projects increased by 5.4 per cent over the same period.

For the purposes of the survey, FDI projects includes investment from the rest of the UK into Scotland, or involves a company or institution headquartered outside of Scotland that establishes a base of operations within Scotland.

The results of the survey confirmed the country was again the most attractive location for inward investment in the UK outside of London.

Scotland increased its share of the total inward investment projects attracted by the UK, from 11% in 2020 to 12.3% in 2021. 

Crucially, its investment destination attractiveness rose to its highest level, with 15.8 per cent of investors rating the country as the most attractive location in the UK for FDI, more than double the 2019 figure (seven per cent).

Adrian Gillespie, chief executive of Scottish Enterprise, said: “Today’s EY Attractiveness Survey underlines the compelling strengths Scotland has to offer on the international stage. 

“Scotland’s incredible workforce, world-renowned universities, competitive cost base, supportive business environment, magnificent natural resources and unparalleled quality of life on offer immediately put Scotland on the radar of investors. 

“When combined with our ‘Team Scotland’ approach, which sees public bodies, academia and industry working together to promote the very best Scotland has to offer, this really makes us stand out from the crowd. Businesses have told us that this joined-up approach is a key reason why they choose Scotland – and EY’s survey is testament to this – with Scotland’s perceived attractiveness to inward investors now at record levels.

“For Scotland’s performance to grow so markedly, and to yet again be the most attractive location in the UK for FDI outside of London, is a fantastic achievement that will further enhance our global reputation. Scottish Enterprise and our partners will continue to promote Scotland as an ideal investment location, delivering economic and partnership opportunities for our communities and businesses alike.”

Three Scottish cities, Edinburgh, Glasgow and Aberdeen remain in the Top 10 locations outside of London for attracting inward investment projects. Edinburgh alongside Manchester is ranked equal first; Dundee and Livingston also make the Top 20.

The data also showed Scotland performed strongly in high-value, high-growth industries like digital and utilities alongside a rebound in manufacturing FDI. The four leading sectors were digital technology (33 projects), utility supply (18 projects), business and professional services (14 projects), and machinery and equipment (14 projects).

Trade Minister Ivan McKee said: “It is great to see these latest results, which show Scotland leading the UK when it comes to securing Foreign Direct Investment, in spite of the significant challenges posed by Brexit and the pandemic. That is testament to our skills base, and our highly qualified workforce.

“We have been the most successful nation or region in the UK, outside of London, for 9 of the last 11 years and for the 7th year running, in attracting FDI.

“These results indicate that our values-led approach to investment, set out in our Inward Investment Plan, is delivering and underline the important ongoing contribution of inward investment to the recently published National Strategy for Economic Transformation.”