The UK enjoyed a very strong inward investment performance in 2006/07. A total of 1,431 foreign direct investment projects were recorded in the UK during the year - the third record year in a row - creating over 36,000 new jobs and safeguarded a further 4,000. So where were the key areas of success and expansion?
The US continues to be a crucial partner and accounted for one third of the UK’s inward investment over the year. In excess of 540 projects were initiated – up 21% on the previous year. Financial services and ICT were the strongest sectors for US involvement.
Remaining vibrant
Investment from Europe remained vibrant. France, Germany, Ireland, the Netherlands and Sweden were the top five sources of investment projects in the UK during the year. Again ICT was a popular sector but key projects were won in the environmental technology and life science areas.
343 projects were recorded from the Asia Pacific and Africa region, with improvements in business from Australia, China, South Korea and Taiwan. The largest source of inward investment from the region was Japan, with 80 projects initiated.
A nation of natural born innovators
R&D continues to be a major selling point for overseas companies coming to the UK. We account for 1% of the global population but are responsible for 5.5% of the world’s research and 70% of foreign owned companies maintain a higher density of R&D here than in their home territories. For example, Microsoft has recently opened a major research centre in the UK.
The UK also boasts world-class scientists (no less than 9% of the world’s scientific papers are produced by UK researchers) and there are now eight research councils working together to promote science, technology and engineering. In 2006/7, over £200m was invested in knowledge-based industries, a strength we will continue to build on in the coming years.
The UK is a global player in life sciences and is the world’s 2nd largest pharmaceuticals exporter. The UK was responsible for the discovery of one quarter of the world’s top 100 medicines. Over 137 R&D projects started in 2007, often helped by a newly appointed team of 20 R&D specialists that the UK Trade & Investment provide, all with considerable experience in their industries.
UK Trade & Investment has a new initiative to encourage joint ventures with British companies. We offer foreign businesses thinking of investing in the UK a free report to assess whether a joint venture would further their business objectives. This has resulted in 10 successful joint ventures, a figure we plan to build on during 2007/8.
UK Trade & Investment helps businesses to thrive
Overseas investors enjoy comprehensive ongoing support from UK Trade & Investment when they choose to invest in the UK. Wherever they locate, they will never be far away from a local development agency and an aftercare service geared to their needs. UK Trade & Investment can provide advice on immigration, skills, planning, infrastructure and tax legislation. It also supports businesses by representing their interests through the development of government policy. Our ethos is that by sharing knowledge and encouraging collaboration, we can help build world-class businesses.
The UK is universally recognised as a perfect environment in which entrepreneurs can thrive. With this in mind, in 2003 we developed an initiative called the Global Entrepreneur Progamme, which to date has helped 67 overseas businesses and entrepreneurs locate in the UK. Part of the programme is one to one business mentoring currently being utilised by 70 clients.
World class creativity
Creative industries are increasingly seen as one of our greatest strengths with over a million people currently employed. For example, the recent Harry Potter film “The Order of the Phoenix” was shot in the UK by a skilled British team including British director, editor, composer and cast. The special effects and post- production were also carried out in the UK with world class technical personnel.
This creative excellence is also showcased in the online games industry, where the UK is Europe’s largest and most established market with over 150 games development studios. There are also 4 accredited university courses helping to maintain skill standards.
The UK also has a thriving TV and music industry. We are the 4th largest music publishing market in the world, with an export value of £1.3 billion. UK designers are also renowned worldwide – the iphone was designed by a UK design team and over 185,000 people are employed in this area.
The perfect location for investment
The five-year strategy outlined by UK Trade & Investment last year put financial services at the very top of UK success stories. The figures speak for themselves: over 70% of International Bond Trading and 50% of Global Foreign Equity trading is carried out in the UK. One of the UK’s advantages is its geographical location, as it can interact with all the major international money markets during the trading day.
The UK is seen as a leader in world finance. We currently host 255 foreign banks. The combination of skills, innovation, geography and a low tax regime make the UK an attractive proposition to overseas investors. We are also a leader in international insurance.
Getting greener – the energy industry
Finally, there have been considerable developments in the energy industry, reflecting an increasing commitment to new energy resources. For example, licensed electricity suppliers will soon be required to buy a proportion of their electricity from accredited renewable resources. This has led to major developments in investment in off shore wind farms and other greener energy sources. In 2006, more than £500 million worth of wind turbines were commissioned in the UK and there was also a £15 million investment project to develop underwater wave power. This side of UK industry is set to be one to watch over the coming years.
Looking ahead
This was another very successful year for the UK winning foreign direct investment projects. Working with our partners in the UK and overseas, UK Trade & Investment will continue to support businesses realize their international business potential. The future looks promising for inward investment in the UK.
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