A new report from TheCityUK and Freshfields Bruckhaus Deringer calls for the UK to adopt a bold new investment strategy to capture future investment, stay ahead of international competitors and drive growth.
The report, ‘Driving UK growth: capturing future investment in a rapidly changing world’, highlights that the UK’s position as a world-leading services hub is under challenge. In financial services and technology, it has lost ground on capturing global services investment to New York, and centres such as Singapore are making quick gains.
In Europe, while the UK remains the largest destination for financial services foreign direct investment, it attracted just three more financial services projects than France in 2021 (63 vs 60).
To reaffirm its spot as the leading global hub for services investments, boost exports and be at the cutting edge of tech and green innovations, a new UK investment attraction strategy must be future proofed by reflecting both well-established and evolving investment priorities and trends.
TheCityUK and Freshfields’ ‘Driving growth’ report sets out a series of recommendations and policies to deliver this:
- Maintain green investment – green investment to be fully mainstreamed.
- R&D incentives for services – R&D incentives broadened to cover the UK’s services sector and aid retooling the economy for a net-zero future.
- Create a global talent hub – promote the availability and quality of talent and ensure employees benefit from maximum flexibility.
- Design the world’s best and most efficient regulatory centre – drive regulatory effectiveness, consistency and efficiency / regulators to recognise their role in shaping UK competitiveness / Enhance regulatory cooperation with other countries.
- Deliver a safe, reliable hub for global investment – ensure that the process for screening investments in the UK is efficient, transparent and well-targeted on policy goals.
- Strengthen the UK as a global listings hub – joined up and proactive approach to promoting UK exchanges as attractive venues.
- Share the UK’s proposition with the world – a new strategy that is highly tailored to different investment groups, coupled with a focused communication programme / a global diplomatic network that actively engages with how global financial markets operate and can effectively deliver investment messages to key investors in market.
Miles Celic, Chief Executive Officer, TheCityUK, said, “The UK has long been a global services hub and preferred destination for financial services and tech investment, but complacency is not an option.
“Bold action and collaboration between government, regulators and industry is needed if the UK is to steal a march on its competitors and attract more global services investment in the future.
“Ensuring the UK’s investment strategy reflects the priorities of today’s investors is paramount to continuing to create more high-skill, high-value jobs and make sustainable investments across the country.”
Claire Wills, London managing partner at Freshfields Bruckhaus Deringer, said: “Bolstering foreign direct investment 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.”
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.”
Further details investment priorities and specific recommendations can be found in the report.