120 thousand more Northern jobs over ten years if share of foreign investment was increased
- Published on Monday, 18 March 2013 12:18
- Posted by Vicki Mitchem
Report shows importance of overseas investment in tackling economic crisis and closing the North/South divide
More than 120 thousand new jobs could be created in the North in a decade if the North's share of foreign direct investment (FDI) returned to levels enjoyed prior to the abolition of the Regional Development Agencies (RDAs), according to a new report published by the think-tank IPPR North.
The report – UK First? Improving Northern access to Foreign Direct Investment - shows that securing FDI has been a key element of economic development in the North, with companies like Nissan and Siemens leading the way. FDI has supported the growth of key businesses and helped to create and protect jobs.
But the number of FDI projects secured over the last few years has declined – particularly in the North, where the drop has been 27 per cent since 2010, when a new approach to inward investment was introduced by the Coalition. This trend is increasing the North/South divide which is already wide. In London the number of projects has increased by 19 per cent during the same period and since 2004, London and the South East have secured more foreign investment than the rest of England put together (see table below).
And while the UK still secures the largest proportion of foreign investment in Europe, Germany is fast closing the gap.
To help create the right circumstances to encourage greater inward investment, the report recommends:
A greater share of Whitehall resource be devolved to strengthen the capacity of city regions to seek foreign investment- working across Local Enterprise Partnership boundaries to identify key investment opportunities and to better project the local offer to national and international partnersChanging the way government monitors investment with less emphasis on counting the number of new projects and more emphasis on expanding existing projects and the number of new jobs createdA pan-northern investment body – a 'Northern Investment and Trade Board' to develop key trade and investment priorities for the North at a significant scale, improving co-ordination between local authorities, local enterprise partnerships and UKTI specialists.
IPPR North director Ed Cox said:
"It is very worrying to see that a key element of the North's economic success in recent decades has been declining in the past 3 years. If it continues, this can only make the imbalance in the UK economy even worse than it is already. It is clear that the Coalition's current approach to attracting inward investment in the North is not working. But our report shows there are steps that can be taken to improve it. It is vital that action is taken to allow the UK to maintain its place as the leading place to invest in Europe, and for the whole of the UK to contribute to that ambition.'