3 minute read • published in partnership with Irwin Mitchell
Elevating UK manufacturing: Report highlights key insights to drive overseas investment and foster industry growth
A new report by law firm Irwin Mitchell and economic consultancy, Cebr, makes a series of recommendations aimed at increasing the amount of foreign direct investment (FDI) injected into the UK’s manufacturing sector.
According to the latest data, the UK economy has attracted £2,000 billion of FDI and in addition to creating jobs, it helps enhance productivity, competitiveness, and innovation. Irwin Mitchell, which advises overseas businesses looking to invest in the UK, revealed that the UK’s position in 2021 for inward investment in food products, beverages and tobacco products was £90.7bn, representing a £10bn annual increase.
Metal and machinery products was the next most attractive manufacturing related subsector at £55.8bn, however this was down by £9.1bn compared to the previous year. According to the latest data, the total value of manufacturing related FDI position totals £300bn.
The report’s three main recommendations to increase investment in the future are:
Provide quality infrastructure – Investors look closely at the location and a city must have good infrastructure to be an attractive place for international investors to place their money. A good road, sea and air transport network is important for any business involved in goods trade. Services businesses also need to move their employees around, so connectivity is key for supporting FDI.
Offer businesses good access to credit – A business-friendly financial system is key for attracting FDI. Good access to credit will help international businesses operating in the UK, as they will be also to borrow to invest and innovate as part of their project in the UK. Britain is home to a world leading financial services sector, and so supporting this sector will help all businesses and make the UK an attractive place to do business.
Support sustainable economic growth – Foreign investors will only be willing to accept risk in the UK is it is seen to have a sustainable economic environment in which businesses can prosper. If potential investors are concerned about a possible recession, they are likely to be less willing to engage in FDI in the UK. Therefore, it is important the Government pursues policies to support sustainable economic growth.
Bryan Bletso, director of strategic growth for Irwin Mitchell’s international team, said: “The importance of FDI to the UK manufacturing sector cannot be overstated. FDI plays a crucial role in bolstering the sector’s growth, innovation, and competitiveness on the global stage. Through FDI, the UK manufacturing industry benefits from access to new markets, advanced technologies, and managerial expertise, which in turn leads to increased productivity, job creation, and overall economic growth. Furthermore, FDI helps to diversify the UK’s industrial base, attracting investments from various countries and industries, thus reducing the risks associated with economic fluctuations.
“In an increasingly interconnected world, fostering a healthy environment for FDI is essential for the UK manufacturing sector to remain a vibrant and significant contributor to the nation’s economy. In order to attract more foreign direct investment, the UK Government must focus on providing quality infrastructure, offering businesses good access to credit, and supporting sustainable economic growth. This will create an attractive environment for international investors and help the UK become a global leader in FDI.”
Irwin Mitchell provides full-service advice to overseas businesses and individuals looking to invest in the UK and has experts across jurisdictions including the US, France, India, Germany, Singapore, Israel, and China – all of which are mentioned as countries leading FDI into the UK.