The report titled “Driving UK growth: capturing future investment in a rapidly changing world” claims that the UK’s position as a world-leading services hub is under challenge.
As a result, the report sets out a series of recommendations, including mainstreaming green investment, expanding the R&D incentives to cover the services sector, as well as learning how to better attract talent and strengthen the UK as a global listings hub.
“The UK has long been a global services hub and preferred destination for financial services and tech investment, but complacency is not an option”, said Miles Celic, CEO at TheCityUK. “Bold action and collaboration between government, regulators and industry are needed if the UK is to steal a march on its competitors and attract more global services investment in the future.”
FDI and sluggish UK growth
The UK has been battling sluggish growth since leaving the EU in 2016. Foreign direct investment could tip the balance in favour of more robust growth, as the UK has one of the lowest corporation taxes among the G7 nations.
In December 2022, GlobalData/Investment Monitor launched the Global FDI Annual Report. According to the report, greenfield foreign direct investment (FDI) reached 16,516 in 2021, slightly below the pre-pandemic level recorded in 2019.
The growth was mainly driven by countries reopening their borders, as the “living with Covid” era began.
Amazon was the world’s largest investor in 2021, creating 241 projects, followed by IWG (140), Marriott International (98) and China-based Jin Jiang International (82).
Claire Wills, London managing partner at Freshfields, commented: “Bolstering FDI to the UK and reaffirming the UK’s role as a leading global services hub will be key drivers of growth
“To attract more global businesses, the UK must improve its offer to investors by adopting new pro-investment policies while continuing to ensure its well-established strengths – and communicating these effectively”, Wills continued.
Martin McElwee, antitrust, competition and trade partner at Freshfields, added: “If the recommendations set out in our report are adopted, we believe the UK could position itself to capture a new wave of investment in high-value services and technology, grow as a world-leading financial hub and lead the global green transition”.