Invest for success (Paul Lewis, Managing Director, Scottish Development International)
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. So the latest EY Scotland Attractiveness survey provides a useful insight on how Scotland is performing.
The survey highlights a record year for Scotland in attracting FDI projects and for the fifth consecutive year Scotland is named as the top performing region in the UK outside London for FDI in 2016. The survey also notes that Scotland is now winning more than one in 50 FDI projects into Europe – a clear indication that Scotland is firmly established as a location of choice for global investors.
With total FDI projects up by 2.5%, representing Scotland’s greatest share of UK FDI projects since the survey started in 1997, this is certainly great news for the Scottish economy.
Inward investment can bring a range of direct and wider benefits to our economy, from jobs and supply chain opportunities to the positioning of Scotland internationally as a place the world can engage with. Inward investors also tend to pay higher wages, be active exporters and invest more in innovation, all of which helps to boost productivity.
City regions are playing an increasingly important role in inward investment, and it's encouraging to see some of Scotland’s cities performing very strongly, with Glasgow, Edinburgh and Aberdeen all featuring in the UK top ten for FDI projects. The emerging City Region Deals across many parts of Scotland can help direct investment into the skills and infrastructure projects that can support the attraction of even more new inward investors in an increasingly competitive global marketplace.
This matters because evidence shows inward investment brings significant returns to our economy.
Scottish Enterprise’s evaluation evidence indicates that our support for FDI in Scotland has a Gross Value Added impact ratio of 1:11, which in simple terms means that for every £1 we spend on attracting inward investment to Scotland, a further £11 is generated for the Scottish economy.
The main factors driving sustainable inward investment in Scotland are access to skilled people, access to knowledge and access to markets, as well as the opportunity to be part of a successful community of liked-minded companies.
This success 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.
We now have an opportunity to build on the international reach and connections that exist across many parts of our economy, to attract even more new inward investment to the country – through our universities, via Governments and with businesses.
If we can work together to achieve this, not only will we strengthen Scotland’s investment proposition, but as a nation we will be better placed to take advantage of the FDI opportunities coming into the UK from some of the newer, emerging economies.
By uniting our voices and our networks, we can reinforce the key message from the EY Scotland Attractiveness survey; that “Scotland’s attractions are still shining out brightly in an uncertain world” and this bodes well for the future flow of FDI into Scotland.