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Foreign Direct Investment and its importance to UK regions post-Brexit
Foreign Direct Investments (FDI) are made by individuals or businesses from one country investing financially in another. Attracting FDI has become paramount to the UK’s continued overall growth because it sets up long-term ties between different economies. The Office for National Statistics (ONS) reports that FDI (inward) investment has had a decremental fall since 2011.
The good news is that the UK was the lead beneficiary in a number of projects in 2016 and also in terms of FDI jobs. According to EY’s annual Attractiveness Report, the rapid rise of FDI projects overall across Europe contributed to the UK’s market share falling from 21% to 19%. But with the report stating that London obtained 39% of all FDI projects from Europe, and the West Midlands leading the way amongst the UK’s regions, there’s no need to panic just yet.
It’s the way we choose to approach negotiations that could affect the UK’s investment opportunities from potential overseas investors in the future.
What are the different Brexit approaches?
At this delicate time while the negotiations continue, how should regional clients and workers best prepare to secure their position?
Daniel Yates, Director of CFO Practice at Page Executive says: “Key to ongoing success in securing ongoing FDI, as has been demonstrated in the West Midlands, is strong regional leadership by both government and industry. In particular regions need to be seen as open, outward looking and welcoming to potential foreign investors. Having the right skills in the workforce and creating the perception as being a region that is ‘on the up’ is also important.”
What is interesting to note is that on an individual project basis, the US came out as the biggest investor, which at least points to the UK being able to retain regular investment and trade links with non-European countries. But if the country’s regions are attracting such positive levels of investment in such an uncertain time, retaining that interest is key in ensuring that the biggest business investment areas can continue to grow.