EY Attractiveness Survey 2020

Scotland is growing its number and share of inward investment projects at a faster pace than the rest of the UK, according to EY’s Attractiveness Survey.

We know that Covid-19 will have an impact on foreign direct investment (FDI) flows, not just for Scotland but for countries across the world. However, FDI levels remain stable in Scotland’s priority areas where we excel, such as advanced manufacturing and low-carbon technologies.

"Scotland has yet again achieved an impressive performance on FDI in 2019. The pace and scale of growth achieved is evidence of Scotland being well-placed to tackle the challenges presented by Covid-19 and an uncertain economic environment."

EY Scotland's Ally Scott

Top choice for investors outside London

EY’s 2020 Attractiveness Survey shows that Scotland remains a prime location for international companies considering foreign investment and expansion amid global challenges.

  • For the seventh consecutive year, Scotland has reinforced its position as the most attractive location for inward investment in the UK outside of London with a 7.4% increase in FDI projects
  • Growth of FDI in Scotland outpaced the UK, while Scotland’s share of UK inward investment also grew in 2019
  • Glasgow has bounced up the ranks to third most attractive UK city, excluding London, followed by Edinburgh in fourth and Aberdeen in seventh
  • Increasing numbers of existing overseas companies are investing further in Scotland

The EY report examines the performance of Scotland and the perceptions of the UK and Europe as destinations for FDI. This year’s report included a survey of 800 international investors looking at the impact of Covid-19 on investment.

Scotland's resilient FDI performance

Scotland secured more than 100 inward investment projects last year, with international investors citing core strengths in talent, skills and innovation that give Scotland the edge over other UK and foreign investment locations.

Scotland also performed well for job creation in 2019, rising to second place from fifth in the UK in 2018.

UK leader in manufacturing

Scotland’s machinery and equipment and agri-food sectors generated the highest number of inward investment projects while there was a notable rise in manufacturing and R&D activities.

“The boost in manufacturing places Scotland as the UK leader for this sector. This, along with the growth in machinery and equipment and agri-food, plays directly into Scotland’s international reputation and capabilities within the food and drink market.”

EY Scotland's Ally Scott

Scottish cities increasingly attractive

Scotland’s three largest cities all experienced an increase in FDI projects in 2019, Aberdeen up 88%, Glasgow up 21% and Edinburgh up 10%. All three cities are among the top ten most attractive cities for inward investment in the UK, excluding London.

Commenting on Aberdeen’s performance, Derek Leigh, Aberdeen Managing Partner at EY said:

“Aberdeen’s future has hit a critical juncture as the impact of Covid-19 compounds challenges faced by the oil and gas industry following a recent dramatic fall in the oil price. Energy transition will be a key focus for the city.”

The survey of global investors in this year’s report identified clean tech and renewables as the number one sector expected to drive growth in Europe in the coming years. Aberdeen stands out as it already has a wealth of skills and experience bolstered by internationally renowned universities to feed the talent pipeline.

Top countries for foreign direct investment into Scotland

The USA remains Scotland’s number one source of FDI, followed by France, Germany, Japan and Norway.

Scotland secured most of its projects from Norway, signalling the strong ties between the two North Sea nations and an avenue of opportunity for further growth outside the EU beyond Brexit.

Building a greener, brighter future

With seven consecutive years of strong FDI performance under its belt, Scotland continues to be an open and welcoming place to do business, with a positive outlook for FDI in a post-Covid-19 world based on investor intentions.

We value too our existing investors who have chosen to grow their businesses here after locating in Scotland. As part of our Covid-19 response and our future FDI strategy, we will be redoubling our efforts to support these significant companies.

And as we move out of the coronavirus crisis, we plan to rebuild Scotland’s economy in a way that supports human wellbeing and the transition toward a greener, net-zero country, while overcoming inequality and ensuring sustainability.

View the full EY Scotland Attractiveness Report, May 2020

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Your guide to setting up business in Scotland (PDF, 1.9MB)

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