Technology, skills and the green economy have helped to drive record foreign direct investment into Scotland, according to a new report.

EY’s annual independent analysis of inward investment showed 142 FDI projects were secured last year, an increase of 12.7 per cent on 2022, and double the UK growth rate.

Scotland’s share of UK FDI projects increased for a fifth year in a row to 14.4 per cent, the analysis found.

Investor perception of Scotland also increased, with 26 per cent of potential investors surveyed by EY saying they were planning to invest in Scotland – up from 19.2 per cent in 2022.

Seizing opportunities presented by new technology and accessing skills were among the main reasons given for establishing or expanding operations.

The performance underpins Scotland’s position as the top performing area of the UK outside of London – for a ninth consecutive year. 

Deputy First Minister and Economy Secretary Kate Forbes said: “Attracting inward investment is critical to economic growth and driving forward strategic objectives in key sectors.  

“These results show a record performance, with Scotland once again outpacing the UK as a whole and the European Union when it comes to securing foreign direct investment projects, delivering on the actions and priorities we have set out in government.

“From being at the forefront of the energy transition to the rapidly emerging cutting-edge technologies, we have an enormous opportunity to capitalise even further. We will continue to work with our economic development agencies as part of a “Team Scotland” approach to attracting foreign direct investment and bringing more high quality jobs across Scotland.” 

The EY survey also highlighted: 

  • Scotland outpaced both the UK and Europe with FDI growth last year. Europe recorded a 4 per cent year-on-year decline.
  • Scotland has three of the top 10 cities for FDI projects outside London (Edinburgh 2nd, Glasgow 4th and Aberdeen 8th)
  • The US (responsible for 27 projects) remains the biggest contributor of Scottish inward investment projects, with the number of projects from Germany doubling to 20, a decade-high, making it the second-biggest source of projects into Scotland, followed by France with 10 projects. 
  • For the first time in six years, utility supply which includes renewables (40 projects) has overtaken digital technology projects (14 projects) in Scotland due to increasing levels of low-carbon and ‘cleantech’ investment with an impressive decade high rise in manufacturing projects (45).

Reuben Aitken, managing director of energy transition and international operations at Scottish Enterprise, said: “It’s great to see utility supply as the top sector for FDI into Scotland last year. This chimes with our focused strategy which identifies the energy transition as one of three areas central to transforming Scotland’s economy, creating quality jobs and accelerating our path to net zero.”

Jane Morrison-Ross, chief executive of South of Scotland Enterprise, said: ““In the South, we have our net zero investment guide, the new Invest in South Scotland website, our just launched Chapelcross energy transition zone and we are Scotland’s national natural capital innovation zone.”