UK best European country for tech investment, says report

London top for tech

When it comes to foreign technology companies looking to set up in Europe, the UK, and more specifically London, is the most attractive location.

The findings of the 8th annual Ernst & Young European Attractiveness Survey show that in 2009 the UK attracted 119 software projects from foreign direct investment (FDI), the largest number secured by any country in Europe and 17 more than it secured in 2008.

London secured 49 software investments in 2009, easily outstripping Paris, which was second with 20, and third-placed Munich with 11. Cambridge, frequently referred to as Silicon Fen because of its cluster of high-tech firms led by ARM, was 10th.

Good infrastructure, a workforce with the right skills, a strong domestic market for technology and a sound reputation are the key reasons for the UK’s success, says the report.

“The UK is extremely well positioned to secure more of this investment,” said Karl Havers, EMEIA technology leader at Ernst & Young. “We have the right skills,
infrastructure and reputation to retain our position top of the table.

“In addition, the UK maintains a strong domestic market for software products
and services worth more than £8bn a year, with healthy growth rates
forecast until 2013,” Havers added.

The majority of technology FDI comes to Europe from the US. The US invested 55 new missions into the UK software sector in 2009; five times more than Germany (10 missions) followed by France (9), Sweden and the Netherlands (both on 8).

But the UK’s supremacy will not last forever, warns the report, as emerging economies will become more attractive as they develop.

“The global economy is evolving fast, with China, India, Brazil and the Middle East joining the traditional players of North America, Europe and Japan as both the destinations and sources of global investment,” said Havers.

“With capital now clearly flowing in multiple directions, we need to
continue to excel in our core competencies, as well as encourage further development of policy which is pro business and pro entrepreneurship,” he added.

Clean-tech and creative industries are likely to emerge as the UK’s strongest suits in the future, the report says.