Scotland held onto its position as the second most attractive location for foreign direct investment (FDI) after London, according to a new report from EY.
The nation has also retained the majority of ground gained over the last five years, the accountant’s Scottish Attractiveness Survey found.
The report analyses FDI projects that have resulted in the creation of new facilities and jobs, as well as the perceived attractiveness of regions to investors.
It found that Scotland remained the second-top location in the UK for attracting FDI projects despite a fall of nearly a fifth from 2017, reflecting a declining trend across the UK.
This followed three consecutive years in which Scotland’s number of FDI projects set new records for the past decade, in what EY Scotland’s incoming managing partner Ally Scott deemed an “unprecedented run of success”.
The study found that 94 foreign direct investment projects were secured in 2018, down from 116 the previous year. London attracted 458, down by only 0.2 per cent from the prior year.
Edinburgh, Glasgow and Aberdeen were among the UK top ten cities outside London for attracting projects – generating 20, 19 and nine FDI projects respectively.
Furthermore, when investors were asked to cite which region of the UK they perceive as the most attractive in which to establish operations, 7 per cent named Scotland, up from 3 per cent in both 2016 and 2017 – and top countries for FDI in Scotland were the US (34 per cent), Germany and Switzerland (both 8 per cent), and Norway (7 per cent).
Scott pointed to Scotland having had three consecutive years of “record-breaking FDI numbers – an unprecedented run of success”.
He added: “Make no mistake – this is a picture of a resilient Scotland standing tall in a challenging UK-wide environment to secure inward investment, set against an unsettled European economic landscape. Efforts now must focus on ensuring the talent pool is skilled and agile, fed by an appropriate pipeline of talent, in order for Scotland to compete in the market and attract high-paid, lucrative projects.”
Paul Lewis, MD at Scottish Development International, said: “Encouragingly, the perception of Scotland as a place to invest has more than doubled among foreign investors, bucking the UK trend. The report suggests this can be attributed to the strength of ‘Brand Scotland’ and the way the country is marketed on the international stage.”
He also called for further efforts to build on Scotland’s reputation and global connections. “This will help attract even more inward investment and consolidate Scotland’s position as a location of choice for global investors.”