The tech sector is driving foreign direct investment into Scotland, according to new economic figures released this week.

Edinburgh and Glasgow, in particular, are focal points for investment in digital technology alongside utility supply, including renewables.

The cities are ranked in the top 10 in the UK, with Edinburgh at 2nd, Glasgow 4th, and Aberdeen joint-5th, for FDI projects outside London, according to an annual tracker.

EY’s attractiveness survey showed that Scotland outpaced both the UK and Europe for the second year in a row, maintaining its position as the top performing area of the UK outside of London for the eighth year.

Inward investment projects grew by 3.3 per cent in 2022, compared to 1.4 per cent growth across Europe and a 6.4 per cent fall across the UK.

Scotland’s share of UK FDI projects reached a record high of 13.6 per cent – up from 12.3 per cent the previous year – while a record 19.2 per cent of investors responding to the EY survey said they were planning to establish or expand operations in Scotland, indicating strong investor sentiment.  

Trade Minister Richard Lochhead said: “These results show Scotland once again outpacing the UK and Europe when it comes to the pace of growth in securing Foreign Direct Investment. This is in spite of the significant challenges in the economy caused by Brexit, Covid and the geopolitical instability which triggered the current the cost of living crisis.

“Attracting inward investment is critical to shaping and growing our economy and ensuring we thrive in the global marketplace. These findings clearly demonstrate Scotland’s attractiveness as an investment destination and highlight the phenomenal progress being made to grow our international reputation as a dynamic, open nation with an outward facing economy. From being at the forefront of the energy transition to the rapidly emerging cutting-edge technology such as in the space sector, there is a tremendous opportunity for us to capitalise even further.”

He added: “The results are also a strong endorsement of the “Team Scotland” approach taken by government and our economic development agencies to attracting foreign direct investment. We will continue to deliver the priorities set out in our Inward Investment Plan, aligning with the ambitions of the National Strategy for Economic Transformation, to build our global reputation further and help deliver even more high quality, well-paid jobs as part of a fair, green and growing economy.”

The US (responsible for 40 projects) remains the biggest contributor of Scottish inward investment projects, with continued strong performance across Europe including Germany with 10 projects, the highest contribution in a decade.