The market for inward investment is increasingly competitive, with more nations and regions seeing foreign direct investment (FDI) as a key way to grow their economies. The latest EY Scotland Attractiveness Survey provides a useful insight on Scottish performance.
It has been a record year for Scotland in terms of foreign direct investment, and for the fifth consecutive year Scotland has been named the UK’s top performing location for FDI in 2016. The total FDI projects have increased by 2.5%, the largest increase since 1997, which is certainly great news for the Scottish economy. There are also many indications that Scotland is firmly established as a prime choice for global investors. Support for Foreign Direct Investment in Scotland means that for every £1 we spend on attracting inward investment to Scotland, a further £11 is generated for the Scottish economy.
Inward investment brings a range of direct and wider benefits to our economy, from jobs to ensuring Scotland has a strong global position. Inward investors also tend to pay higher wages, be active exporters and invest more in innovation, which ultimately keeps productivity flowing. Investment is built around the skills of Scotland’s workforce alongside the quality of our research and innovation. 2016 seen Scotland attract 21 individual investment projects, the second highest number to date, this number of new investors and how they help strengthen growth sectors and improve international competitiveness is a clear indicator of long-term growth and sustainability for Scotland. R&D inward investment plays an important role in supporting greater innovation and higher productivity in Scotland’s economy and builds on the strengths of Scotland’s universities. Overall, it also means that Scotland is now first in the UK for R&D investment, a particularly significant outcome given these high value investments.
Much of this success is built from Scotland’s position in sectors that can support sustainable economic growth, such as technology, energy, and business services; sectors where Scotland is internationally competitive and where there is global demand. It also reflects the significant collaboration across our public, private and academic sectors to project a truly connected Scotland to the world at large, something that is an important source of competitive advantage.
Scottish Development International plays a key part in selling Scotland. With a network of 29 offices in 18 countries, it’s particularly rewarding to see that our hard work in building networks and connections across China is paying off; with five investment projects in 2016, China has now entered the top five countries investing in Scotland for the first time. Scotland has an opportunity to build on international reach and connections and if universities, governments and businesses collaborate to achieve this we will strengthen Scotland’s investment proposition. By uniting our voices and our networks, we can reinforce the key message from the EY Scotland Attractiveness Survey; “Scotland’s attractions are still shining out brightly in an uncertain world” and this bodes well with the future flow of Foreign Direct Investment into Scotland.
