The UK:
Europe's Front Runner In the Race for
New Business (cover)
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Site Selection talked recently with Andrew Fraser, chief executive of the London-based Invest in Britain Bureau (IBB). As Fraser elaborates below, Britain is not only the perennial European front-runner in attracting foreign direct investment (FDI), it's also leading the way in attracting today's emerging information-age businesses.
SS: Where does the UK fit in the big picture of European business location? What competitive advantages does it offer U.S. and other companies that need to expand in Europe?
Fraser: The UK historically has dominated the site selection market in Europe, with something like a quarter of all the investment coming into the EU (European Union) coming to Britain. The latest numbers suggest that our market share has been increasing. In 1997, fully 34 percent of all FDI flows into the EU went to Britain. It really is a remarkable story.
Our share of U.S. investment is about 40 percent of all U.S. companies in Europe. That parallels our market share of Japanese companies as well. Interestingly, we're second only to the USA in attracting German investment.
SS: What kinds of industries or investments are you seeing?
Fraser: There's been an interesting shift. We've had a lot of traditional manufacturing in Britain, with companies like Ford manufacturing here since the 1920s. But we see some new trends emerging. First, Britain is leading in telecom and shared services centers. We have the obvious advantage of English language, but Britain also has the most open and deregulated telecom market in the world.
Secondly, there's been a big increase in management centers and management headquarters. There is evidence that well over half of European management headquarters -- increasingly, facilities for managing Europe, plus Africa and the Middle East -- are locating in the UK. And it's not just U.S. companies. Most recently, Ericsson of Sweden has shifted a number of European management functions to London.
The third area that's growing enormously is investment in research and development. The most high-profile example last year was Microsoft's first lab outside the USA, which located in Cambridge. We're seeing a cluster of R&D investment all around the UK from all kinds of industries. Pfizer now has 4,000 pharmacists in Kent, where they've developed more patents than all of Pfizer outside the UK put together. The new drug Viagra® is their latest UK success. Cadence Design Systems is investing in a chip-design center in Scotland, and it will be recruiting nearly
2,000 engineers for semiconductor design.
In sum, there's just a big focus now on what we call the knowledge-driven businesses. Telecom giants like Nortel and US West are here, plus U.S. software giants and companies like IBM and Compaq. You name them, they're all here in the UK.
Above Left: The UK's share of total European foreign direct investment is increasing,
IBB Chief Executive Andrew Fraser says.
Other big recent projects include Sitel Corp., which plans to create about 10,000 new call center jobs, and Motorola, which is hiring another 1,300 people in Swindon to produce infrastructure for its worldwide Iridium® communications system.
Above: The Scottish government and the University of Edinburgh plan to create a $10.5 million Scottish Microelectronics Center to aid in the development of microelectronics and semiconductor companies. Pictured above is Edinburgh.
©1999 Conway Data, Inc. All rights reserved. Data is from many sources and not warranted to be accurate or current.