Foreign direct investment has played an important role in the UK economy. Foreign
companies are a source not only of capital but also of new technologies, ideas and
skills. These can bring significant benefits to the domestic economy, boosting output and
productivity, creating new jobs and safeguarding existing jobs.
UK Trade and Investment, the government agency responsible for the promotion of
inward investment, reported 1,744 FDI projects in 2008/09 either locating or expanding
in the UK. . During 2008/09 53 countries invested in the UK. The leading source
remained the USA but with 108 projects during the period, 44% more than in the previous
twelve months, India became the second most important source.
UK Trade and Investment estimated that the 1,744 projects would create over 35,000
new jobs but would safeguard a further 43.000. According to UKTI the investment
covered a range of industries including advanced engineering, the creative industries,
software and computer services, other business services and financial services and
also involved the setting up of 251 headquarters or European headquarters.
The UK has been particularly successful in attracting investment in industries linked
to the knowledge-driven economy such as computer software, internet related fields
and telecommunications. Other major sectors for UK inward investment are the automotive
sector, chemicals and pharmaceuticals and financial services. In terms of many key
measures (such as investment per employee, exports/sales, productivity and average
wages), the British subsidiaries of foreign parents outperform domestic companies.