Inward Investment Insight
Adam Breeze
2025-06-30
The UK Department for Business and Trade (DBT) has released their annual foreign direct investment results for 2025-26. It’s like Christmas Day for inward investment nerds like me. The annual results generate a rare headline for our niche profession that is sadly a binary choice between:
‘Record Inward Investment Results for the UK’
or
‘Inward Investment Falls to Record Low’
Unfortunately it was the latter’s turn this year.
The good news is that the way these results are recorded and presented, it is simply impossible to take a view, positive or negative, about the success of inward investment performance. It’s just Numberwang.
Here’s my key takeouts from the figures:
1. Who’s Success?
There are two sets of results: the usual 12-month data; and a 9 month subset which runs from 5 July 2024 (ie the date that the incoming Labour government took office). A strange thing to do, unless you are trying to suggest somehow that inward investment has flourished from the day Starmer entered Number 10. This is clearly BS given that inward investment is not some tap that can be turned on and off at will. The projects counted in July, August, September and probably the rest of the year too, will have been in the pipeline for a while. But hey, let’s not spoil the story.
One of these projects will undoubtedly be the announcement by Universal Studios to invest in Bedfordshire – but the company actually acquired the land for the deal back in 2023! It may or may not include some of the spurious £40 billion investment by Amazon (https://inwardinvestment.substack.com/p/amazons-40-billion-investment-in), although elements of this were announced two years ago. My point being, these successes belong to the teams that landed them and not the opportunist politicians that try to claim them as their own.
2. Project Counting is Pointless
There were 1,375 ‘projects’ this year. Which is 12% fewer than last year’s 1,555. Hence the negative ‘record low’ headlines. But who says 1,555 is good and 1,375 is bad? It’s absolutely meaningless if one ‘project’ is Europe’s largest ever theme-park costing billions and employing thousands… and another ‘project’ is a one-person sales operation in a serviced office. When projects are aggregated up it’s impossible to assess the relative success. Does a single thousand-job project equate to a thousand one-job projects? Discuss.
3. If a Project Lands without Support, is it a Success?
Like trees falling silently in uninhabited forests, some project successes just happen without DBT involvement. Now this is an interesting metric as it goes some way to show the gap between ‘known projects’ and ‘unknown projects’ until they announce. Project number nonsense notwithstanding, this year has seen a fall of ‘DBT involved’ from 65% to 60%, a fall of 18% in the year. The figure in 2017-18 was more than 80%. That’s quite a change.
4. More Jobs or Better Jobs?
The other annual metric is by far the more important one. Jobs. The first principle of inward investment is ‘Why?’. Why do you want investment? Is it for project numbers, no, it’s usually (but not always) about people. Attracting better jobs with higher wages is the key driver for most teams, but the raw data doesn’t help here. The UK attracted 69,355 new jobs, which is a lot by any measure and is only a few less than last year (just a 3% decline). If we’re targeting transformational high technology jobs of the future, then we should be measuring and publicising the average wage of new jobs like so many other countries do (IDA has been a best practice in FDI data reporting for years). I’m sure that a huge proportion of the jobs attracted will be above average wage, so let’s see it and celebrate it.
5. Not all Regions are Created Equal
The list of 12 UK regions/countries ranked by projects and jobs shows a familiar pattern with a third of the successes landing in top ranked London. The North West, West Midlands and Scotland are in the next tier with some impressive numbers; while Northern Ireland finish bottom. But hang on, this isn’t ‘apples with apples’… some regions have 10 million populations (both London and the South East) while Northern Ireland has less than 2 million people. Recalculating the figures based on ‘new jobs per million people’ throws up a different ranking with Northern Ireland outperforming the South East and East of England, which took the last two places. The demise of two of the most affluent regions with such hotbeds of tech success (Thames Valley and Cambridge) is a huge change from the days when they were both top 3 regions for inward investment and is worthy of further investigation.
6. Sources: US and India Lead the Way
No surprise that the United States retains the title of most prolific source for UK FDI, with 329 projects and 14,213 new jobs, which is almost three times the nearest challenger which was India, with 106 and 6,067 respectively. The dominance of the US and the rise of India are the two big headlines. Other markets of note include Germany, France and Sweden (interestingly if the data aggregate the Nordics together, as was the practice in previous years, it would be placed 3rd. Korea and Japan were once key markets for UK FDI but Japan was ranked 12th for new jobs and Korea didn’t make the top 15.
China is unsurprisingly out of the top 10 for projects and jobs, and it’s hard to see that trend reversed any time soon (and rightly so). There’s a very long tail of ‘others’ outside the top 15, which when grouped together would rival the US at the top!
A Plea to DBT and OfI
I’ll end with a plea to the good folks leading the UK’s inward investment efforts:
Please change the reporting of the annual results; make them meaningful; be honest, transparent and detailed; provide more commentary and analysis; and use their release as a celebration of all the positives, with a gathering of all the local and regional teams that make it all happen, with the overseas teams beamed in on a big screen.
More of the same is just Numberwang.
View original article at:
https://inwardinvestment.substack.com/p/uk-inward-investment-results-2025