Scotland enjoys ‘unprecedented’ record of foreign direct investment

Scotland has achieved an ‘unprecedented’ record of attracting foreign direct investment (FDI) according to EY’s latest Attractiveness Survey, marking the third consecutive year that investment in Scotland has set new record levels.

The report’s top findings include:

EY senior partner in Scotland, Mark Harvey, said: “Scotland has demonstrated an outstanding ability to attract and drive sustained growth of FDI.

“However, the performance of the UK as a whole within Europe is a signal that competition for FDI projects is intensifying and our previous levels of attractiveness are not guaranteed to continue.”

He added: “Economic growth (in Scotland) is positive, but sluggish, and access to labour is a recurring challenge that makes it more difficult to expand operations.

“Scotland must work increasingly hard, with private and public sectors in partnership, to ensure the pipeline of talent, skills and experience is strong enough to drive business and economic growth in the future.”

Welcoming the report, Scotland’s Economy Secretary Keith Brown said: “This report shows Scotland has achieved another excellent performance in inward investment in 2017, with an increase in both numbers of projects and jobs reported.

“The EY results confirm Scotland’s position as the top UK destination after London for inward investment, with the increase in projects coming to Scotland greater than that across the UK‎.

“It also reflects the underlying attractiveness of Scotland for R&D and digital investment, where we are outperforming the UK, both in terms of the number of projects and in the growth in projects. There is also a significant increase in the number of jobs being created as a result of this investment, with over 6,000 jobs in 2017, a record year for Scotland.

“It is also encouraging that the digital sector experienced a 56 per cent increase in FDI projects and was the second largest sector to attract investment into Scotland behind business services and manufacturing activity, which experienced a 25 per cent increase of FDI in 2017, compared to 2016.

The research identified potential challenges to the UK in maintaining its leading position in Europe for attracting inward investment.

Paris overtook London for the first time when investors were asked name the most attractive city to locate projects.

Addressing those findings, Mr Brown said: “While these strong investment and employment figures reflect the continuing attractiveness of Scotland, the full report shows the damage Brexit is already doing to the UK’s reputation as a location for investment, with Paris replacing London as the top city location.‎

“Our continuation in the single market and customs union post Brexit is crucial for business and investment. We are doing all we can to mitigate the impact of Brexit on our business community – it means the ability to trade in a market which is around eight times bigger than the UK market alone. That is why I recently announced a new grants scheme to help exporters get ready for Brexit and help business deal with the economic consequences of leaving the EU.

“We are determined that Scotland will continue to be attract further new investment and enhance our global reputation, which is why we launched an international campaign - Scotland is Now - to promote Scotland as a place to invest, to live, to work and to study.”