UK is destination of choice in Europe for foreign investment; for this to continue a pro-growth, open and stable business environment needs to be preserved
23 January 2019
- Deloitte analysis shows that 3,900 UK inward investment projects in the past three years brought in $140 billion of capital –more than France and Germany combined
- 57% of Fortune 500 companies have their European headquarters in the UK
- Impact of Brexit on foreign investor sentiment yet to be seen but report highlights need to maintain a pro-growth, open and stable business environment to keep up investment
The UK attracted more foreign direct investment (FDI) than any other country in Europe between 2015 and 2018, with nearly four thousand projects bringing in more capital investment than second and third placed Germany and France combined.
Sharon Thorne, Deputy CEO and Managing Partner, Global & Strategy for Deloitte
“We have produced this report to highlight the significant contribution that inward investment makes to the UK economy, to examine the UK’s place in the global economy and look at what the country needs to do to maintain and grow investment levels in the future. The report highlights the key drivers that have made the UK so successful – and also the concerns that Brexit and our changing international trading position might have on our ability to attract FDI. From the interviews we have undertaken there is one clear imperative - UK business and government need to invest in safeguarding the key drivers of UK attractiveness, from the depth of the talent pool to the digital and physical infrastructure, so that we can set a course of for future growth and prosperity for the UK.”
David Sproul, Partner and Chief Executive of Deloitte UK and North West Europe, added:
“There is much in this report for the UK to be proud of. The levels of investment the country has attracted over previous years from foreign investors
The report shows that London is the most popular city globally for inward investment in terms of
London is home to 43% of the European headquarters of Fortune 500 companies in 2018, compared to only 4% in Geneva and 2% in Amsterdam, Brussels and Dusseldorf respectively
Making the UK home
In 2018, 57% of the Fortune 500 had their European headquarters in the UK. Germany was the second favourite destination and is home to 14% of headquarters. Switzerland is third (7%) with the Netherlands and Belgium in tied fourth place (5%).
In 2013, Deloitte analysed the Top 250 Fortune 500 companies according to their choice of European headquarter location. 72 of the Top 250 companies had their European HQ in the UK, compared to 68 in 2018 – showing a slight decline.
While the number of European HQs of the Top 250 Fortune 500 companies in the UK and London has declined over the last five years, the number of European HQs in regional cities has dramatically increased. Now, a quarter of the European
The impact of Brexit and ensuring the UK’s continued success as a destination for FDI
“Brexit is, of course, the focus for much attention for prospective investors in the UK, but it is too soon to tell what impact Brexit will have on inward investment levels”, commented Deloitte’s Chief Economist, Ian Stewart. “The scale of the type of investments cited in this report means foreign investors take a long-term view when considering a country’s continued competitiveness and we will have to wait to see how Brexit impacts on those strategies.”
Business people interviewed for this report cited the need for the Government to maintain the country’s key strengths – its pro-growth, open and stable business environment – in order to keep up and improve the UK’s success as a destination for foreign investment. They added that the Government needs to provide clarity on policy direction to ensure the UK continues to be perceived as
Broader Benefits – economic growth, R&D
The report also highlights the broader benefits of strong FDI on an economy, namely enhanced research and development (R&D) and a strong correlation between FDI and economic growth and productivity. Studies have shown that Gross Value Added labour productivity is greater in
International Trade Secretary Dr Liam Fox MP said:
“This report is further evidence that the UK continues to be an attractive destination for investors - with London the most popular city globally for inward investment, ahead of New York and Singapore. And we remain the top place to invest in Europe, bringing in more capital investment than France and Germany combined.
“I am in Davos today to maintain and build relationships with the world’s most important investment stakeholders – who are attracted to the UK’s open, liberal economy and business-friendly environment. My international economic department will continue to work to ensure that the whole of the country benefits from the growth, opportunities and jobs that international investment brings.”
Sharon Thorne concludes:
“From a talent perspective, the focus should be on ensuring a ready supply of the skills foreign and domestic businesses need. Alongside this is the need for continued investment to create a world-class digital infrastructure.
“And not least of all, a proactive relationship between Government and business is also a priority.
The full report can be found here.
Note to editors
About the Power Up report
The research, published today in Deloitte’s ‘Power Up: UK inward investment’ report, analyses data and statistics from researchers such as FDI Intelligence and the Office for National Statistics and includes commentary from Deloitte partners, London First, the CBI, TheCityUK and
Deloitte’s Power Up series explores what we can do now to power up the future ahead, from retaining our strength in innovation to developing and attracting the skills our economy needs. This is the fifth in a series of insight reports that explore topical challenges and opportunities facing UK businesses and government.
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