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Saturday, July 4, 2020

Scotland increased inward investment in 2019 at a faster pace than the UK, reveals the EY Scotland Attractiveness Survey

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THE publication of EY Scotland’s Attractiveness Survey 2020 confirmed Scotland continues to be the most attractive location for inward investment in the UK outside of London.

The annual report revealed that in 2019, Scotland increased inward investment at a faster pace than the UK as a whole, both in terms of number and share of UK projects.

According to EY Scotland’s figures, there was a 7.4% increase in the number of projects secured, from 94 in 2018 to 101 last year.  This ensured Scotland remained the most attractive location for FDI in the UK outside of London for the seventh consecutive year.

EY Scotland’s survey supports Scottish Development International (SDI) figures published in January that showed in 2018/19, more than 10,000 planned jobs had been generated by FDI projects into Scotland – an increase of 18% compared with the previous financial year.

Other notable highlights in EY Scotland’s Attractiveness Survey, which covered the calendar year January-December 2019, included:

  • The average size of FDI projects in Scotland created 83.6 jobs last year, which is the highest since 2011 (when the figure was 116.2) and ahead of the UK average for 2019 of 51.4.
  • The sectors responsible for most FDI in Scotland in 2019 were machinery & equipment (58% increase compared to 2018) and agri-food (78% increase compared to 2018)
  • In terms of the type of activities carried out, manufacturing shared the top spot with sales & marketing as both secured 32 FDI projects in 2019

With regard to the origin of the FDI projects:

  • The US extended its lead as the biggest single source of FDI, accounting for 35% of inward investment into Scotland (an increase of 1% from 2018)
  • Making up the rest of the top five (in descending order) were France, Germany, Japan and Norway
  • Scotland secured more projects from Norway than any other part of the UK (seven of 15)

And in terms of FDI into Scotland’s cities:

  • Scotland’s three largest cities all experienced an increase in FDI projects in 2019
  • Glasgow was Scotland’s most attractive city for inward investment (third in UK, excluding London), seeing a 21% increase compared to 2018
  • Edinburgh was second in Scotland (fourth in UK, excluding London), seeing a 10% increase compared to 2018
  • Aberdeen was third in Scotland (seventh in UK), enjoying an 88% increase compared to 2018.
The publication has been welcomed by many, including Scottish Enterprise.

Charlie Smith, Scottish Enterprise International Development, Strategy and Technology, managing director, said: “While our priority remains supporting companies through these challenging times, EY Scotland’s Attractiveness survey reminds us that Scotland continues to punch above its weight when it comes to attracting FDI projects that have a high economic value, creating quality, well-paid jobs for our skilled workforce.

“Companies are attracted to Scotland for a number of reasons, but what make us truly unique is our ‘Team Scotland’ approach; the partnership between our public institutions, academia and the private sector is unparalleled and continues to deliver results.  This collaborative approach will be critical as we aim to restart and recover Scotland’s economy.

“The Attractiveness Survey also showed the importance of 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.

“We know that COVID-19 will have an impact on 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.

“The ultimate prize for us remains the same: seeing international partners work with indigenous companies to innovate, share ideas, share talent, share cultures and grow together for everyone’s benefit.  As we emerge from the darkness of COVID-19, inward investment will be vital to delivering economic opportunities for communities across Scotland.”

Fiona Hyslop, Economy secretary, said:  “There is no doubt these are incredibly challenging times for our economy and we continue to focus on helping as many businesses as possible survive this crisis with our £2.3 billion package of support.

“As we begin to take steps to ease lockdown, this survey provides us with a welcome reminder of the strength and attractiveness of Scotland as a location for investment and for establishing a business. Inward investment will always have a part to play in our economy, so it’s hugely encouraging to see that for the seventh consecutive year Scotland led the way in the UK. This is also yet another example of our strong global reputation as a fantastic place for businesses to locate in and thrive.

“We will feel the impact of COVID-19 for some time and the outlook for international trade and investment has changed significantly following the pandemic. There is also the danger presented by a no deal Brexit if the UK Government refuses to ask for a two year extension to the current transition period, and the threat that poses to Scotland’s inward investment success story.

“However, this survey demonstrates that Scotland is well placed to meet the economic challenges as we work to recover and restart our economy.”

Ally Scott, UKI Managing Partner for EY Scotland, said: “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.

“Importantly, Scotland continues to increase the quality of projects it attracts as demonstrated by the high average number of jobs created, a figure far ahead of the UK in 2019.

“While Scotland has a strong foundation to navigate beyond COVID-19, there is no scope for complacency. Now, more than ever, there must be a strong partnership between government, business and society to formulate a careful, considered and compelling route back to economic growth.”

 

 

 

 

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