Finance · 30 June 2017

Foreign investment in UK tech reaches ten-year peak but regional disparity widens?

investment in UK tech
Four times as many foreign investment deals were made with UK tech companies in 2016 than those in Berlin
London has maintained its position as the European capital of technology, as new figures reveal foreign investment in UK tech companies reached its highest for ten years.

According to a new report, from professional services organisation EY, a total of 269 foreign direct investment (FDI) projects were secured in Britain in 2016.

However, while investment in UK tech companies was at its highest for a decade, Britain’s market share across Europe dipped three points to 27 per cent.

Nonetheless, London’s 168 deals performed favourably against rival capital cities three times more than Paris and almost four times more than Berlin.

Investment in UK tech remained dominated by the United States, with deals from across the Atlantic making up 41 per cent of the total figure. This represented a decline from a decade-long average of 49 per cent, as the presence of other countries increased.

While Britain continued to lead in Europe, experts warned of an emerging gap between London and other regions. Foreign tech deals in the capital heavily outweighed those in other major cities, and in 2016, London accounted for almost two-thirds of all FDI projects, rising from 57 per cent in 2015.

The low-performance of the Northern Powerhouse was highlighted as a particular cause for concern. The number of foreign investment deals in the North of England dropped by over a third between between 2015 and 2016.

Commenting on the latest statistics, Rahul Gautam, EY’s UK head of technology, media and telecommunications, confirmed Britain’s dominance against Europe in tech investment, but warned there was no room for complacency.

last year saw growth slow overall and the success in London was not mirrored in other regions, Gautam said.


 
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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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