Back to previous page

According to professional services firm EY’s annual Attractiveness Survey, Scotland secured 80 foreign direct investment projects in 2014 – and enjoyed its most successful year for attracting US investment.

Whilst investment projects fell marginally from a figure of 82 in 2013, Scotland experienced a significant boost to its global profile following the highly publicised events of 2014.

Mark Harvey, EY Partner and Scotland Market Leader, commented: “Overall, the outcome for the year shows that Scotland has succeeded in sustaining its number of projects at the improved level seen since 2012, when investments into Scotland surged by almost 50%.”

Flourishing sectors

Scotland secured more scientific research FDI projects in 2014 than any other time in the past decade – whilst the five FDI projects secured by the financial sector represented the highest level Scotland has secured from that industry since 2006.

Manufacturing projects were the most significant kind of FDI in Scotland – with numbers increasing from 15 projects to 31 in 2014. Led by machinery and equipment ventures, this growth saw 15 projects established in 2014 – more than double the level in 2013.

Predicting trends

Whilst project success is determined in terms of job creation, Scottish employment secured from FDI fell by 15% to 3532 in 2014. The lowest figure for Scottish FDI jobs since 2009, this represents the third consecutive annual decline from a peak of 5926 jobs in 2011.

However, a comparison of FDI-encouraged employment over the past decade highlights that Scotland remains the UK’s second most popular location for job creation from inward investment projects.

With over 37,000 jobs created in Scotland since 2005, Scotland is second only to London in terms of inward investment – and significantly ahead of the third-placed West Midlands in terms of the UK.

A special relationship

Scotland attracted 37 US investment projects in 2014 – experiencing its most successful year for US investment and surpassing a historical trend.

Previously, Scotland secured two out of every five projects from US investors – with Scotland’s share of US investments running at a ten-year average of 40.4%.

The 'halo effect’ from Scotland’s high-profile events in 2014 have indeed boosted global perceptions of Scotland as an FDI destination

Mark Harvey, EY Partner and Scotland Market Leader

The country also gained a higher proportion of French and Norwegian investment than the UK as a whole, but secured a lower proportion of projects from Germany and India.

“While this is a positive achievement, there’s a continuing need to build relationships with growth territories like Asia to secure a bigger share of their projects”, said Harvey.

Whilst China ranked as the fifth biggest source of projects for the UK in 2014, it does not figure in the top ten origins for FDI into Scotland.

Scotland on the global stage

As part of its annual Attractiveness Survey, EY conducts an annual Perception Survey.

Involving interviews with 406 decision-makers worldwide – from companies who have invested or could invest in Scotland and the UK – the survey is designed to gauge perceptions of the attractiveness of various FDI locations.

When asked which UK region they found most attractive to locate their operations to, 6% of worldwide investors picked Scotland – increasing dramatically from last year’s 2% figure.

Scotland also scored high with investors not yet established in the UK.

“While perception figures can be somewhat volatile by nature, the scale of the increase is a very encouraging sign for future FDI in Scotland – and suggests that the ‘halo effect’ from Scotland’s high-profile events in 2014 have indeed boosted global perceptions of Scotland as an FDI destination”, said Harvey.

Celebrating success and facing challenges

According to Harvey, “Scotland is punching above its weight in securing global FDI, but challenges remain. The world economy continues to struggle for growth and FDI values globally fell in 2014. Scotland faces fierce competition for projects from locations not just across the UK, but also worldwide.

“The challenge now for Scotland is to build further on the achievements to date and tackle the areas where it can do better, making Scotland the most successful place it can be.”

Discover Scotland's investment potential