'Resilient pipeline'

Scotland’s rise in foreign projects bucks EU fall

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US firm AskBio was among those that invested in Scotland

Scotland attracted more foreign projects last year than in 2019, bucking a fall across the UK and in Europe.

New research has revealed that Scotland secured 6% more FDI (foreign direct investment) projects in 2020 (107) against 101 in the previous year, with the US accounting for more than a third.

This contrasted with FDI projects across the UK falling 12% (from 1,109 to 975) and European FDI projects also sliding by 13% (from 6,412 to 5,578).

The UK lost out to France as the most popular European destination for foreign investors for the second year in a row, amid disruption from Brexit and the coronavirus pandemic. During 2020 the UK secured 975 inward investment projects compared with France’s 985 projects.

Scotland has also bolstered its position as the UK’s most attractive location outside London for inward investment.

Scotland’s share of all UK projects increased from 9.1% in 2019 to 11% in 2020.

This proportion has been exceeded only once – in 2015 – in the past decade. Scotland has been the UK location with the second highest number of overseas-backed projects – after London – in every year since 2014. 

The number of new projects (61) in Scotland – as opposed to reinvestments – has bounced back to its highest level for five years, after three consecutive years of decline.

This performance ensured Scotland increased its market share of all new projects coming into the UK from 5.9% in 2019 to 8.4% in 2020.

Scotland’s ‘big three’ cities (Edinburgh, Glasgow and Aberdeen) were all ranked in the UK’s top ten cities for FDI projects outside London, with Edinburgh placed first, while digital tech and agri-food topped the sector leader-board.

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Fifteen per cent of investors said that Scotland was the most attractive part of the UK in which to invest – double the proportion saying the same in 2019 (7%) and, compared to the rest of the UK, behind only London (25%).

The data emerged in EY’s 2021 Scotland Attractiveness Survey.

Ally Scott, EY Scotland managing partner, said: “Amid arguably the most challenging environment for FDI in living memory, it’s clear that Scotland has put in an impressive performance over the past year.

“With investment intentions into the UK overall also at a record high, there’s every prospect of Scotland winning a healthy proportion of a resilient pipeline of investments in the coming months and years.

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