Scotland has slashed economic downward trend caused by covid with increase in foreign direct investments with Edinburgh second highest in UK, according to EY study

Despite the economic pressures of covid, Scotland has stopped the trend of falling foreign investments in projects and has instead seen an increase with Edinburgh as the second highest foreign invested area in the UK, according to a latest report.

Monday, 7th June 2021, 7:51 am
Updated Monday, 7th June 2021, 8:04 am
Economist Mark Gregory says the University of Edinburgh could be a reason as to why Edinburgh had an increase in Foreign Direct Investment as Scotland overall sees a rise in investment (Photo: Ian Georgeson).

An Earnest and Young (EY) Global study found that Edinburgh was the second highest in the UK for attracting foreign investment in the last year, overtaking Manchester and Glasgow.

Edinburgh managed to secure 36 foreign direct investment (FDI) projects while Glasgow secured 23.

Overall, the number of FDI projects that came to Scotland last year was up from 101 to 107.

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London continued to attract the biggest number of UK projects, however it saw a drop from 48% to 39% of the UK’s total projects.

Across the board, however, the figures show that Scotland consistently outperformed other parts of the UK in this annual survey, with the exception of London.

Scotland saw a 6% rise for FDI projects compared to a 12% drop for the UK as a whole which stands at 975 projects.

The report found that the reduction was caused by digital technology going to London.

Most of the appeal in Scotland last year was due to digital technology, agri-food and business services, the study found.

Mark Gregory, EY’s chief UK economist told BBC Good Morning Scotland: “So last year was a tough year everywhere for FDI but Scotland bucked the trend and was up 6% so one of the best performing parts of the UK and strongly in second place so a really good performance in a difficult year.

"I think Scotland has worked hard on this for some time and it’s got a new strategy for FDI and I think it’s offering very joined up propositions to new investors.

"Then you have some real assets such as Scottish universities which underlies that strength in research projects attracted into Glasgow and Edinburgh.”

Talking about why Edinburgh is doing well with FDI’s, Mr Gregory added: “It’s partly the university and partly it is an attractive place to come to, it’s got a skilled workforce and it has a history of doing well but it’s got strength in some key sectors such as digital, life sciences and they’ve been growing much faster in recent times."

Europe's total FDI investment was down 13%.

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