In early June of this year consulting firm EY released their EY 2021 Attractiveness Survey, entitled ‘Foreign Investors back Europe, but is Europe back?’ The report aims to analyse both the reality and perception of Foreign Direct Investment (FDI) in Europe. The reality aspect was calculated using EY’s proprietary database tracking new facility and job creation, the EY European Investment Monitor, built in collaboration with OCO Global, a leading authority on FDI. The perception aspect was measured with the help of an online survey sent by Euromoney and based on the responses of 550 key international decision-makers in March and April 2021. EY’s report is supported by articles and insights by EY’s experts and other stakeholders.
The report included some promising findings for the East of England and Cambridge in particular. First, the East of England was the UK leader in terms of increase in inbound FDI projects in 2020, with the number of such projects rising by 35% to 54 from 40 in 2019. The report notes that the region’s FDI success was catalysed by three key sectors: digital technology (12 projects in 2020, an increase by 5), transport and logistics (10 projects, up by 3) and agri-food (8 projects, up by 7)
This strong 2020 performance was achieved against a backdrop of a 12% decline in project numbers in the UK, including a drop of 25% in digital projects. Indeed, the East of England and the North West, which increased by 16%, were the only UK regions to record double-digit growth, especially significant given that London and the South East registered double-digit declines .
Cambridge and Peterborough were the focal point of the East of England’s FDI boom. Cambridge, which as the report notes has been a key cog in the UK’s research, development, life sciences sectors, recorded a 20% annual increase in FDI projects, from 10 to 12. The city was ranked joint 9th best city for FDI with Bristol and its strong performance was spurred on in particular by sales and service, logistics and R&D projects. Peterborough, riding the e-commerce wave, further set in motion by the pandemic, saw a significant increase in projects (10 in 2020 from just one in 2019) and was ranked joint 12th with Coventry and Nottingham.
The East of England also performed well in terms of investor perception: 7% of investors surveyed declared it as the most attractive UK region in which to invest, up from a mere 1% in 2019. The UK as a whole is also performing well in the region’s key sectors: life sciences projects were also up 62%, and research and development projects were up 12% to 102 projects, positioning the UK only behind France in terms of overall projects.
Stuart Wilkinson, Office Managing Partner at EY in the East of England, commented: “The East of England has a diverse regional economy, and some of its sectors have seen an impact from global economic and business shifts linked to Brexit and the pandemic.”
Cambridge and the East of England, with their Silicon Fen knowledge cluster of technology and software businesses, already have the infrastructure to take advantage of the UK and Europe’s heightened focus on these sectors, precipitated by the pandemic and a more general digital transformation. EY’s survey is clearly indicative of this process already being well underway, as projects mount and investment booms in the region.