Scotland attracted record levels of foreign investment last year and outstripped the wider UK performance, according to figures published today.
The nation saw a 7 per cent increase in the number of Foreign Direct Investment (FDI) projects secured, the third year running of growth, EY’s latest Scotland Attractiveness Survey reveals.
The rise took the total number of FDI projects into Scotland, including setting up business operations or acquiring business assets, up to 116 from 108 in 2016.
The total number of jobs secured as a result of FDI into Scotland more than doubled from 3,131 in 2016 to 6,374 in 2017. The figure is the highest number of FDI jobs created in Scotland in any year in the past decade which EY said was due to a shift towards more large scale projects.
In 2017, 10 projects created 200 jobs or more while there were just six projects that resulted in more than 100 jobs the year before.
The UK as a whole saw an FDI rise of 6 per cent and Scotland’s higher increase saw its share of UK FDI projects increase to 9.6 per cent in 2017. But Scotland’s market share of Europe-wide FDI projects fell back, from 1.8 per cent in 2016 to 1.7 per cent as growth was outpaced by a 10 per cent rise in projects into Europe as a whole.
Mark Harvey, EY’s senior partner in Scotland, said Scotland has demonstrated an “outstanding ability” to attract and drive sustained growth of FDI.
But he warned that the performance of the UK as a whole within Europe is a signal that competition for FDI projects is intensifying.
“Our previous levels of attractiveness are not guaranteed to continue. If Scotland hopes to attract more FDI in the future we must acknowledge and address the challenges that face businesses here,” he said.
He cites issues such as access to labour as challenges that make it more difficult to expand operations in Scotland.
“Scotland must work increasingly hard, with private and public sectors in partnership, to ensure the pipeline of talent, skills and experience is strong enough to drive business and economic growth in the future,” he said.
The sector attracting the greatest number of FDI projects to Scotland in 2017, as in 2016, was business services with 23 projects.
Digital also performed well and accounted for the second largest number of projects generated by any sector in Scotland, with a 56 per cent increase in project numbers in 2017 compared with 2016.
For the second consecutive year Scotland was as the UK’s leading destination for R&D FDI with 22 projects representing a 70 per cent increase from 2016 and accounting for the lion’s share 24 per cent of all UK R&D investments.
Paris was named by foreign investors as the most attractive city to invest in, overtaking London for the first time since the survey began in 2004.