Scotland heads European table for inward investment jobs

FOREIGN investors are creating more jobs in Scotland than anywhere else in Europe and at levels not seen since the start of the recession, according to new figures.

Ernst & Young's latest UK attractiveness survey, which analyses inward investment and the attitudes of global investors, shows Scotland attracted 69 foreign direct investment (FDI) projects last year - a 35 per cent increase on the 2009 figure - creating more than 4,000 jobs.

Significant projects included the creation of 700 jobs at Hewlett-Packard's Erskine plant and Stena Line's new ferry port facility at Loch Ryan which employed 400.

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London was the only region of the UK to draw a greater number of projects, with 289, but they led to fewer jobs than those north of the Border.

The UK remains Europe's top destination for FDI, well ahead of rivals France and Germany and the figures show how FDI in Scotland, in terms of both projects and job creation, has returned to levels experienced in the two years prior to the recession.

However, they remain down on those experienced in the late 1990s and early 2000s.

James Close, a partner at Ernst & Young, said the UK benefited from foreign investors' loyalty and attracted repeat business from satisfied companies.

He said: "The international business community, surveyed as part of the report, continues to cite the UK's technology infrastructure, stable social environment, quality of life, culture and language as what makes it the most attractive investment destination in Europe.

"We have a loyal following of foreign investors prepared to do repeat business here and government has an important role to keep us in pole position."

The UK as a whole attracted 728 FDI projects in 2010, up 7 per cent on the previous year, compared with 562 projects in France and 560 in Germany.

It was the highest number of investments since 1997, but the findings of the report suggest Britain needs to broaden its pool of investors to remain competitive.

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Close said that more should be done to woo new investors from the emerging economic powerhouses of Brazil, Russia, China and India - known as the "Brics".

He said: "We need to do more to attract high quality foreign investment; re-orientate where that investment is coming from towards the Brics; and manage better our reputation with all overseas investors, not just those already established in the UK.

"These are all areas where government has a role to play. If the UK fails to address these challenges we could start to see declining investor interest in our market relative to our competitors." The US was still by far the largest investor into the UK last year, accounting for 254 projects, compared to 44 each from India and Germany.

But the report also warned that FDI was "no panacea for employment growth", as the kind of projects likely to attract investment in the future did not come with the guarantee of large numbers of jobs.

The average number of jobs per FDI project is decreasing across Europe.