Foreign investment in Scotland ‘highest since 97’

FOREIGN investment in Scotland has reached its highest level since 1997, creating more than 4,000 jobs last year, according to a report.

Events such as the Commonwealth Games and Ryder Cup are putting the spotlight on Scotland. Picture: TSPL

Scotland attracted 82 foreign direct investment (FDI) projects in 2013, 8% more than in the previous year and only six short of its record number in 1997.

The figures mean Scotland remains second only to London as the the top location for foreign investment in the UK, but Scotland’s market share of all UK FDI projects has fallen slightly from 10.9% to 10.2%.

IT investment accounted for more than a fifth of investment, making it the biggest sector, and the US remains Scotland’s top source of inward investment with 39.5% of projects.

The Ernst & Young (EY) Attractiveness Survey, which analyses UK inward investment in the past year, also highlighted the opportunity for investment around the Commonwealth Games and Ryder Cup this year.

The number of jobs generated by FDI projects fell from from 4,876 in 2012 to 4,165 last year and the survey put the fall down to the shift away from manufacturing projects towards research and development projects.

Finance Secretary John Swinney said: “This independent survey shows a further impressive performance by Scotland, with an increase in the number of projects secured in 2013, to reach the highest number since 1997.

“And Scotland continues to be the most attractive location for investment in the UK outside of London. In fact, outside of London, Scotland has ranked 1st or 2nd in the UK since 2006.

“As the EY report states ‘this adds up to an encouraging year for Scottish FDI, one in which Scotland’s strengths in knowledge intensive sectors, notably software, came to the fore.’

“Scotland now has a greater share of projects in Research and Development (R&D) than the UK as a whole, a position EY say shows Scotland can ‘punch above its weight in science and technology.’

“Scotland’s success at securing inward investment flies in the face of the Chancellor of the Exchequer’s doom and gloom comments when he said that the independence referendum would damage business. And as EY set out, 2014 presents a great opportunity for Scotland to shine with our increased profile, the Commonwealth Games and Ryder Cup putting the spotlight on Scotland.”

Around half of the FDI projects in Scotland come from reinvestment from companies, which was described as “unusual” in Europe.

Jim Bishop, EY Scotland senior partner, said: “Last year saw the rate of growth in inward investment projects into Scotland return to more modest levels following the sharp rise in 2012. However, any increase in project numbers is laudable given the fierce competition for investment between the rest of the UK and Europe.

“Scotland must increase efforts to sell its advantages to global investors if its impressive track record of securing FDI is to be maintained.

“The country is expected to gain a boost to its international profile this year as a result of the exposure afforded by the Glasgow 2014 Commonwealth Games and Ryder Cup and this should be harnessed as a competitive edge over most other areas of the UK.”

• Scottish independence foreign investment boost