Scotland’s global appeal underscored by annual EY Attractiveness Survey
Increase in FDI projects sees Scotland bucking UK and Europe trend
Scottish Enterprise has welcomed the publication of EY Scotland’s Attractiveness Survey 2021 that confirmed Scotland was yet again the most attractive location for inward investment in the UK outside of London.
Despite the challenges of COVID-19, Scotland secured 6% more Foreign Direct Investment (FDI) projects in 2020 (107) compared to 2019 (101), providing a remarkable vote of confidence for the country as a place for global companies to do business in.
In contrast, the number of FDI projects attracted to the UK as a whole in 2020 fell by 12% (1,109 to 975), while the number of European inward investment projects dropped by 13% (6,412 to 5,578) over the same time period.
This ensured Scotland increased its share of the total inward investment projects attracted by the UK, from 9.1% in 2019 to 11% in 2020.
In further good news for Scotland, the survey revealed that Edinburgh was ranked the number one city in the UK for FDI projects outside of London. Glasgow and Aberdeen were also within the top ten list of UK cities.
Linda Hanna, interim Chief Executive of Scottish Enterprise said: “Whilst there is no doubt COVID-19 caused significant challenges for our economy, today’s EY Scotland Attractiveness Survey 2021 shows exceptional results for Scotland and provides real cause for optimism as we look towards economic recovery.
“Scotland’s incredible workforce, competitive cost base, world-class universities and supportive business environment is what makes global companies want to locate here. Not only does inward investment deliver high-quality, well-paid jobs, it also provides wider benefits such as supply chain opportunities and increased R&D spending that impacts across Scotland’s economy.
“As well as these key economic strengths, Scotland is known for our successful partnership approach, what we call ‘Team Scotland’, to achieving inward investment that sees public bodies, academia and industry working together to promote the very best Scotland has to offer and secure economic investment.
“I am privileged to speak to international businesses on a regular basis to highlight just why Scotland is a perfect place to invest. Encouraging investment from overseas is a critical part of the role that Scottish Enterprise plays to accelerate Scotland’s economic recovery and help create many more good, green jobs.
“Scotland is very much open for business. Scottish Enterprise and our dedicated colleagues based around the world will continue to bang the drum for Scotland, delivering more economic opportunities for our communities.”
Other notable highlights in EY Scotland’s Attractiveness Survey 2021, which covered the calendar year January-December 2020, included:
- The sectors responsible for most FDI projects in Scotland were digital technology (19 projects), agri-food (14 projects) and business services (11)
- New projects in Scotland – as opposed to re-investments – have bounced back to their highest level for five years (61 projects), after three consecutive years of decline. This performance ensured Scotland increased its market share of all new projects coming into the UK from 5.9% in 2019 to 8.4% in 2020
- A total of 15% of investors surveyed by EY as part of the research said that Scotland was the most attractive part of the UK in which to invest – double the proportion saying the same in 2019 (7%) and, compared to the rest of the UK, behind only London (25%)
With regard to the origin of the FDI projects:
- The United States remained the single biggest originator of FDI projects into Scotland, accounting for 35.5% (38 projects)
- This rate for Scotland was slightly above the US proportion of the overall UK market
- Ireland was the second biggest source of projects into Scotland with ten projects, followed by the Netherlands with eight
And in terms of FDI into Scotland’s cities:
- Scotland’s three largest cities were in the top ten leading cities in the UK outside of London for FDI projects in 2020
- Edinburgh – 1st place, (36 projects); Glasgow – 5th place, (23 projects); and, Aberdeen – 7th place, (13 projects)
- Edinburgh and Glasgow were also the leading UK research cities after London