The latest EY Attractiveness Report 2017 confirmed that the UK remains Europe's top location for foreign direct investment. Why do global companies continue to see the competitive advantages of investing here?
Do we sometimes overthink what attracts inward investment?
For the 2017 survey EY spoke to 453 inward investors to the UK. Their top four criteria were:
- Ability and skills of local workforce
- Transport infrastructure
- Availability of business partners and suppliers
- Local labour costs
Sound familiar? The same four reasons came out on top in the 2016 survey as well.
And, commenting on his company's decision to invest in Glasgow in 2016, Dan O'Donoghue, CEO of Irish software firm Farmflo, said:
"The establishment of our dedicated software development centre in Scotland is an exciting venture that allows Farmflo to tap into an excellent resource of locally-based talent."
The message here is clear. Scotland has these strengths in abundance - and they're the reason global companies continue to invest here.
Farmflo in Scotland
Embracing the new... and the traditional
The survey also shows that Scotland continues to attract investment across a range of sectors.
Business services was the biggest source of FDI projects, an industry where our many advantages make Scotland a natural choice for international firms.
Construction came out in second place boosted by increased investment in major energy projects. That offers a clear example of how Scotland successfully embraces the traditional and the new, with oil and gas
investment now joined by a thriving renewable energy sector.
Software projects were the third highest source of investment, a developing sector boosted by the expertise of our university sector and a commitment to building networks to support established industries.
These positive findings were recently backed up by our own annual results which showed a 10% increase in jobs created and secured through inward investment projects.
Our results were announced as Australian financial services firm Computershare revealed plans to open a tech centre of excellence in Edinburgh.
Computershare’s global president and CEO, Stuart Irving, said:
"As a truly international capital city, Edinburgh has a bright future and is a natural home for a global company. As a growing business we need the skills and hard work we see on offer in this city."
Computershare in Scotland
Building new relationships
While we celebrate our recent successes, we also know it's important to continue to develop stronger relationships with new and developing sources of FDI.
For example, in 2015 China didn't appear in the top ten of inward investors to Scotland. In 2016 it ranked as the fifth largest source of FDI projects.
That's a clear sign that efforts to build stronger relationships with China, and other developing and emerging economies, are bearing fruit.
Seeing yourself as others see you
Robert Burns wrote: “O wad some Power the giftie gie us, to see oursels as ithers see us!" To translate from the original Scots: “Would some Power give us the gift, to see ourselves as others see us!”
We understand what potential and existing investors think of when they consider Scotland and the rest of the UK.
Scotland’s attractions are still shining out brightly in an uncertain world.
EY Scotland Attractiveness survey 2017
The EY Survey provides more insight into our strengths and advantages. So we know that Scotland rates highly both for local skills and transport infrastructure, and we have to make sure we sustain these competitive advantages.
Equally, however, we have to acknowledge concerns that investors have in times of wider uncertainty.
By developing a clear understanding of what motivates inward investors we can continue to highlight our strengths while working to allay concerns.
The EY Survey shows that FDI continues to flow into Scotland and across the UK.
By continuing to build relationships around the world and working to enhance our already formidable strengths we can make sure that, as EY notes, Scotland's attractions continue to shine out brightly in an uncertain world, and we provide a welcoming and successful home for companies like yours.
A record year for FDI