A survey by accountants Ernst & Young provides an interesting and – if one wants to take it that way, a reassuring – perspective on London’s position as a centre for technology innovation and inward investment.
Indeed, our recently Tube-less capital has retained its position as the "most attractive European destination for technology [investors]," according to this survey, the eighth of its kind. The data also suggests that the UK and London remain the favoured country and city locations respectively for the most so say ‘foreign direct investment’ interest in both the hardware and software technology sectors. The Smoke got 49 software investments in 2009 versus Paris (20) and Munich (11).
Not that all the action is confined to London, note: in 2009 as a whole, the UK got 119 software projects resulting from FDI, the largest number secured by any country in Europe and 17 more than we got in the previous year. And who’s putting that money in? The USA was the largest investor into the UK’s software sector in 2009, boosting its investment it made from 2008 to 2009, five times more than the Federal Republic and ahead of its investments into France, Sweden and the Netherlands.
"The UK is extremely well positioned to secure more investment," notes the study. "We have the right skills, infrastructure and reputation to retain our position top of the table. In addition, the UK maintains a strong domestic market for software products and services, worth more than £8bn a year with healthy growth rates forecast in the years up to 2013."
This is good for many reasons. All this FDI translated into jobs – no less than 20,017 jobs, ranking the UK as the number one European location, with 16% of the total jobs created across Europe by FDI. The UK’s continuing strength in financial services also underpinned its receipt of 30% of business service projects, 36% of software projects and 27% of financial service projects in Western Europe.
(By the way, it’s important to be clear as to what FDI is. It’s a technical economic term meaning long term participation by country A into country B and usually involves participation in management, joint-venture, transfer of technology and expertise. In other words, we as a country are making ourselves attractive as a place for foreign investors to do a range of things, from setting up subsidiaries or VJs, buying shares of existing companies and so on.)
Little England aspect aside for a sec, E&Y also say that this data shows Europe as a whole is holding its own as a place investors want to put their money into. Despite the economic downturn, Europe still secured 3,303 investments – an 11% decline, but could have been worse. Jobs-wise, we came in lower as a region, though – only 124,923 were created in 2009 versus 148,333 in 2008.
The bottom line here is that London and the UK are seen as places smart people are doing good things with technology and so rich people and corporations outside our shores want to give us their money. That has to be applauded, welcomed, cherished and further developed.
UK Plc needs strong FDI – and we’d even be happy to see other places in the EU get some too… maybe just not as much.