This briefing is the fourth in a regular series of notes tracking the changing patterns of inward investment in the UK as we emerge from COVID-19, and as our trading relations with the rest of the world become more certain. This collaboration between Warwick Business School and Moody’s Analytics, funded by The Productivity Institute, explores the latest intelligence on Foreign Direct Investment (FDI) flows into the UK, and what that means for productivity.
This edition explores how adopting a more strategic approach to attracting inward investment could enhance its role in improving regional equality, with an emphasis on productivity as the main driver of prosperity.
Analysis of the regional data demonstrates significant differences in the nature of Foreign Direct Investment (FDI) between and within regions. Lagging locations attract a higher proportion of low productivity FDI, while high performing places attract more innovation-intensive, high-productivity FDI.
Regional inequalities are worsened by the differences in the ability to attract high productivity investment. Achieving the goals of levelling up will therefore require policies targeted at attracting inward investment to lagging regions.
Read the other briefings:
Authors Nigel Driffield, Xiaocan Yuan (both Warwick Business School), Fernando Gutierrez Barragan (Moody’s Analytics)
