News

LONDON FIRST CENTRE / LONDON DEVELOPMENT AGENCY NEWS RELEASE

 
FOREIGN INVESTMENT IN LONDON INCREASES BY ONE THIRD

London's business community today welcomed a new report showing that foreign direct investment in London increased by one third in 2002. London remains by far the most popular business destination in Europe with 125 new investments in 2002, an increase of 33% on the previous year, according to the Ernst & Young European Investment Monitor. Indeed, London continues to stand in a league of its own, accounting for 7% of all investment projects in Europe, up from 5% last year. This is double the share of its nearest competitors, Paris and Barcelona.

London's strong performance looks even healthier when global economic conditions and last year's international instability are taken into account. Michael Charlton, Chief Executive of inward investment agency, London First Centre, said: "London's ability to consistently attract and retain the lion's share of international business in Europe is testament to its enduringly attractive business environment.

"London offers an unrivalled package of opportunity to international companies, combining a diverse and high-quality property market, Europe's largest and most highly-skilled labour pool, a stable and flexible regulatory environment and superb international and national connectivity."

Michael Ward, Chief Executive of the London Development Agency, said: "This is an impressive performance by London, especially at a time when the number of overseas investment projects into the UK and EU has fallen. It underlines the capital's position as Europe's top business location.

However, there is no room for complacency and we must have the right conditions in place in London if it is to continue its excellent performance. That means having a skilled workforce, good transport and modern, affordable, business premises to attract firms to London and to keep them here. The LDA is working hard in all these areas to ensure London continues to compete effectively as an international business location."

The debate concerning the UK's entry to the Euro seems to be somewhat of a side issue with inward investors. Since 2000 the 12 Eurozone countries have seen their share of total inward investment projects drop from 51% to 44%. However, over the same period, the non-Euro 3 have also seen their share fall from 29% to 24%. This implies that economic factors are more important in attracting investment than membership or non-membership of the Euro.

London's success lies in its ability to attract high-value, knowledge-based industries, such as financial and professional services, information and communication technology, the life sciences and the creative industries. For this London acts as the gateway to the UK, ensuring that when this type of investment comes to Europe, it is the first point of call. The UK share of inward investment in the software sector grew from 29% to 36% in 2002, driven principally by London, which almost doubled its software projects to 20% of the European total. Greater London also took 19% of financial services projects, the highest proportion in Europe.

Among London's successes in 2002 was the investment by Sony, which consolidated its four global financial operations centres into one, based in London. Its objective was to have a complete global integration of foreign exchange and money transactions for the group - excluding mainland China.

In June 2002 US-based ICT Group, a leading global provider of customer relationship management (CRM) solutions, opened expanded European headquarters and a new contact centre operation in Uxbridge, leading to 300 jobs.

In January 2003 Nissan Motor Company opened Nissan Design Europe, its futuristic new European design headquarters in Paddington, which is the main focus for the Japanese car company's development plans in Europe and undertakes design projects for other global markets.

-ends-

Enquiries:
Anna Barlow, Executive Director Marketing and Communications, London First Centre
Tel: +44 (0) 20 7665 1503 abarlow@lfc.co.uk Fax: +44 (0)20 7925 2022

Notes to editors

London First Centre is the inward investment agency for the capital. It is a private and public sector partnership supported by the London business community through London First, the London Development Agency, Invest.UK (part of British Trade International, the lead government organisation for international trade and investment), and the Corporation of London. In eight years of operation, London First Centre's free consultancy service has directly assisted 620 companies from 35 countries around the world to locate or expand in the capital, leading to the creation of some 32,000 jobs. www.lfc.co.uk

London First is a business organisation supported by over 300 of the capital's major businesses. Its mission is to improve and promote London. London First's business members are in key sectors such as finance, professional services, property, IT, creative industries, hospitality and retail. Its membership also includes virtually all the higher education institutions, as well as further education colleges, NHS trusts and independent hospitals. www.london-first.co.uk

The London Development Agency is London's job-creation agency. Working for the Mayor, and in conjunction with business and a wide range of other organisations, the LDA actively pursues economic opportunities for London and all Londoners. It uses its financial resources, property and land assets, and its influence to support business, industry and the economy; attract investment; develop skills and knowledge; revitalise the city; promote equality and diversity; and unite London. www.lda.gov.uk