How FDI is
Funding Projects
Figure 11 shows the number of inbound FDI projects and the number of jobs supported by those projects by sector in the 2021-22 financial year.
Software and computer services are the industry with the most FDI-projects with 304, up from 264 in 2020-21.
This is followed by the environment, infrastructure and transportation sector with 170 inward FDI projects, supporting a total of 10,980 jobs in the UK.
The high number of projects in environment, infrastructure and transportation, which rose by 45% in 2021-22, highlights the growing importance of the environmental sector.
Countries and businesses are increasingly working towards a low carbon economy and environmental sustainability.
The renewable energy sector also saw a 140% rise in the number of projects, reaching 60 in 2021-22.
These sectors are attracting investment as sustainability becomes more important to international investors. Businesses which have clear ESG objectives are more likely to be attractive to investors.
Table 2 shows the number of projects supported by FDI by UK region. The bulk of FDI-projects can be found in London, with the capital recording 444 projects in 2021-22.
Figure 2: Top 10 sectors for FDI projects in the UK, 2021/22
Figure 3: Top 10 sectors for FDI projects in the UK, 2021/22
Table 2: Number of FDI projects in the UK by region, 2019/20 level and annual change
London’s share of FDI projects fell in the 2021-22 financial year compared to the previous year, making up 28% of projects.
This is down from 32% in 2020-21. In the latest data, Scotland and the East Midlands saw increases in their number of FDI projects, with both seeing 27 more projects than in 2020-21. The North East also saw a notable rise in the amount of investment it received, with a 29% annual rise due to 20 more projects. The region has a competitive advanced manufacturing sector which is very attractive for investors. Outside of London, data from EY reveals the other UK cities attracting foreign investment projects. Edinburgh saw the most FDI projects after London in both 2020 and 2021, although the number of projects fell year on year, from 36 in 2020 to 31 in 2021. Manchester, the next city receiving the most FDI, saw a similar decline from 34 projects in 2020 to 31 in 2021. Bristol was the city to see the most notable rise in FDI projects in 2021: it achieved 19, which was driven by digital and utility investments.