Foreign direct investment (FDI) into UK tech projects has fallen as the country faces continued industry criticism that it is “closed for business”.
Whilst UK foreign investment overall saw a 6% decline it remained in second for the most amount of oversee investment at 929 projects.
FDI for tech projects has declined further, dropping by almost a quarter (23%) last year compared to 2021.
Julie Linn Teigland, managing partner, EMEIA, EY, said: “Europe’s critical ambition should be to create the conditions for business to manufacture in Europe, invest in R&D, and make the digital and green investments that will power future prosperity.”
The UK did come top for jobs generated as a result of outside capital at 46,779, more than France’s 38,102.
Across Europe Software and IT Services were responsible for producing the most amount of new roles (67,116).
“If Europe is to capture the pent-up demand and deferred plans, it will be essential to build a compelling business case for global investors in the context of competition from the US and China,” said Marc Lhermitte, partner at EY Consulting.
The findings come amid difficult conversations over the UK’s appeal as a place to do business in tech.
Microsoft president Brad Smith recently declared the UK “closed for business” in response to the competition regulator blocking a deal to acquire video game giant Activision Blizzard for £55bn.
London-based fintech unicorn Revolut has also recently expressed frustrations with the nature of UK business regulation.
Company co-founders Nikolay Storonsky and Vlad Yatsenko last week said complex regulatory red tape has made the UK a less attractive business prospect to other nations.
In an interview, Storonsky said: “US tech champions are so supported by the government: all the lobbyists, politicians, governors, they always promote business, business, business and it is completely the opposite in the UK.
“We have experienced a slowing down. You never know what needs to be done here.”
Revolut’s frustrations are in part fuelled by the difficulty the company has found in securing a banking licence from the Financial Conduct Authority (FCA).
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