By Keith Aitken in Edinburgh | 5 June 2013
Inward investment in Scotland last year was the second largest in the UK and the highest in 15 years, challenging claims that the independence debate would scare off foreign investors, according to research by Ernst & Young.
The findings, revealed in the accountancy firm's annual Attractiveness Survey, even suggest that constitutional change might be appealing to internationally mobile investors, since Wales and Northern Ireland have also outperformed the English regions in countering the pull of London.
E&Y Scottish senior partner Jim Bishop said: ‘These figures clearly demonstrate that Scotland is continuing to punch above its weight in the increasingly competitive global market for foreign direct investment.
‘It may be no coincidence that Wales and Northern Ireland, also in the first years of their devolved administrations, joined Scotland in producing sharp rises in projects.’
A total of 76 foreign-based projects were located in Scotland in 2012, 49% up on 2011 and way ahead of an average increase across the UK of just 3%. Although the number of jobs arising was slightly down on 2011, it was still the second highest for 12 years and might reflect patchy reporting, E&Y says.
While the profile of countries from which the investment came showed Scotland's growing success in diversifying away from its long-standing US mainstay, there remained some lag behind the UK as a whole in finding success in newer markets such as India and China.
The report says the Scottish figures convey two main messages: first, that the possibility of independence is having little effect on foreign direct investment decisions; and second, that Scotland is outperforming the English regions outside London, most of which saw project numbers fall.
It links those trends to the closure of the English regional development agencies, whereas Scottish Trade International, the inward investment arm of Scottish Enterprise and the Scottish Government, has worked to expand and refocus its operations.
‘We continue to increase our resources around the world to ensure we capitalise on new global opportunities,’ said SDI chief executive Anne MacColl.
‘Over the past 12 months, we’ve opened up six new offices in key locations such as Hyderabad, Calgary, Shenzhen and Rio de Janeiro and we’ll soon be establishing a presence in West Africa.”
Scottish Finance Secretary John Swinney said: ‘What our opponents have been saying for some considerable time is that the independence debate would damage investment – the UK chancellor of the exchequer has done it, the prime minister has done it, the chief secretary to the Treasury has done it.
'This report from Ernst & Young completely and utterly refutes the scaremongering they’ve been involved in. For a sustained number of years, when the independence debate has been a reality and when there has been the prospect of the referendum, there has been no negative impact on inward investment.’
But Labour’s Ken Macintosh attributed Scotland’s success to 'everything we have to offer as a country, but one which is part of the UK and with access to Europe too'. He called the Scottish National Party’s stance paradoxical.
'When we get good news on the economy, they cite it as proof that Scotland would flourish as an independent nation. When we get bad news, we are told the UK is holding Scotland back.'
