Importance of FDI to COVID-19 recovery underlined by latest EY Attractiveness Survey

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.

Charlie Smith, Managing Director, International Development, Strategy and Technology at Scottish Enterprise, 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.”

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