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Rt. Hon. Lord Mandelson, First Secretary of State, Secretary of State for Business, Innovation & Skills, Lord President of the Council
Launch of 2008/9 FDI Results, London, 17 June 2009
Thank you to UKTI for staging today’s conference and to all the support they are providing for inward investors to the UK – demonstrating to the world that the UK is open for business, welcoming this business, helping to create the environment for business to thrive, and ensuring that the UK is a springboard for companies to secure global growth and to thrive.
We’re in the middle of a huge debate about globalisation right now. A key concern of which is how easily cash can move from country to country and potentially result in the type of footloose, short-term speculative investments that helped trigger this current global crisis.
And we have got to answer that concern – but we have to keep our response in perspective. Of course, there are big questions to answer. Real risks that we need address in how we regulate a global economy.
But in the midst of this debate, one kind of global investment remains critical to reducing poverty and creating opportunity across every continent. And that’s the long-term, productive Foreign Direct Investment, which over the last twenty years or more, has brought new jobs and driven innovation in the UK and other economies, and which remains our lifeblood in the generation of value, wealth and employment.
That’s why I’m so pleased to be here to announce today’s results. In the sea of grim statistics across the world that have defined this global crisis, this is a piece of good news that’s testament to the fundamental strengths of the UK’s economy and our ability to come through this downturn stronger, and ready for future success.
Over the last financial year, measured by projects, foreign direct investment has risen by 11% in the UK from what was already a high base. 1,744 investment projects have located and expanded here. That’s an increase of 171 on last year. And includes projects in the hi-tech, high-value sectors critical to our future competitiveness and strength.
Despite tough economic conditions, the UK has held on to its position as the number one destination for FDI in Europe, and second only to the United States, in the world.
That’s no small prize at a time when companies across the world are tightening their belts and focusing investment in those sectors and countries, where it can bring most benefit to them.
What the UK has to offer is one of the best and most productive investment climates of anywhere in the world, and we are going to maintain that in the years to come. Supported by open and flexible product and labour markets; a strong commitment to free trade and international investment – there is no wriggling or pussy-footing around in this Government to achieve this. We know where our interests lie, where investors interests lie, and where we are going to continue to lay the welcome mat out in the UK; leading universities and world-class science and innovation base - that have all helped make us one of the world’s most dynamic economies.
When the full impacts of the global credit crunch began to emerge, we acted quickly to stabilise our banking system – we were the first, early movers, and we showed the boldness required, leading where other countries followed. And the City of London remains strong, a leading global hub for financial services and unrivalled gateway to world markets for those international companies that want to grow.
Taken together, it’s these fundamental strengths that have brought some of the world’s most innovative companies to our shores.
Attracting FDI in 2008/09 that’s created and safeguarded over 78,000 jobs in our country. That’s more than anywhere else in Europe. And an important gain, when unemployment is on the rise in every continent.
Of course, the full impact of the financial crisis on FDI projects planned for 2009 is still coming through. Of course we will feel the effect in every part of our economy, and of course investment projects will feel the effect. But what’s already clear is that global competition for this investment will intensify.
The economic downturn has only slowed, not stopped the rise of the world’s emerging economies. While global supply chains continue to redefine the business landscape, and alongside the world’s shift to low-carbon will revolutionise how we do business – what we produce, how we supply, the markets into which we do so, the very processes by which we do so – all of this is going to change. This is a massive challenge, but also a massive opportunity.
In the face of that change, this country - along with other current leading locations - is going to need to work even harder to stay a global destination of choice. And we’re committed to doing everything we can to make this the best possible place in the world to start and grow an innovative business.
That means taking a more strategic approach to UK industrial policy in the future - working hard to secure our lead in those knowledge-intensive industries and global markets that will drive discovery and growth in this century, such as low-carbon technologies, the life sciences, advanced engineering and other hi-tech sectors.
It means doing all we can as a country to build on our strengths and develop the new capabilities essential to our future success.
And our new Department for Business, Innovation and Skills - which the Prime Minister brought together and created in his restructuring of the Government the other week - is focussed on working to ensure our people are equipped to secure the high-value jobs of the future. And that the UK maintains the best effective regulatory environment for global investors and businesses to thrive. There are always pressures for new regulations. We have to assess the merits of these regulations, to consider if there are alternatives and, if there aren’t, ensure they are smart and do not serve to suffocate businesses. It is a tough standard that we fight for in the UK and with our partners in Europe, and it is the standard we will continue to stand up for.
How do we do that? By bringing together those policy levers, which will drive our success - such as skills, regulation, access to finance, science and innovation - so they sharpen our competitiveness and provide the certainty and capabilities business need to invest and realise their long-term ambitions.
And also targeting Government action in those areas, where it can be most effective and make the best difference: enabling business success in every UK region, supporting small businesses and boosting the advice and assistance available through UKTI to help the UK’s thousands of foreign investors develop and grow their global business.
All those things that drive FDI - confidence, credit, global demand - have been in short supply as we know over the last 18 months. They’re essential to our recovery, hence the interventions and actions this Government has taken and encouraged other countries to take through our leadership of the G20. And that’s why today’s results are so important - reinforcing the UK’s position as a strong global investment hub.
No successful company makes the move to invest overseas lightly. This is an expensive, long-term decision. And we’re going to keep on developing those strengths and capabilities that makes us a leading global location of choice for FDI now and in the future. Because these investments, whether they be Boeing, Almirall, Mobilegov or the hundreds of other companies that have made a base here this year in our country, offer us both a route back to growth in the short-term and driver for jobs, innovation and continued prosperity in the years ahead.
So we are offering not just the best environment for business, but a government on your side, not getting in your way; offering partnerships in central government, in local government, in the regions through the regional development agencies, and particularly through UK Trade and Investment. We are helping you do your business better for greater success. This is the theme of the conference today; and it is the theme of our Government, to ensure we continue to help you thrive.
