Decline in foreign direct investment into R&D a worrying trend
New data demonstrates a worrying trend in the UK’s attractiveness to foreign investors. The number of Foreign Direct Investment (FDI) projects landing in the UK has fallen by 6% year-on-year for the past two years, hitting a low of 1,555 in 2023 to 2024. This represents a significant 16% decline since the pandemic and a failure to recover from the peak of 2,265 projects in 2016-2017.
This decline in FDI is particularly concerning when coupled with a recent drop in private research and development (R&D) investment.
Dr Joe Marshall, CEO at the National Centre for Universities and Business (NCUB) said: “New data paints a worrying picture. This decline isn’t just about the specific R&D projects but the wider impacts on jobs and the signals this sends about the attractiveness of the UK’s innovation system to investors. These trends suggest the UK is missing out on opportunities to attract and nurture innovative companies – crucial for economic growth and resilience.”
Dr Marshall concluded: “Boosting investment will be critical for the next UK government to grow the economy. Research and innovation are global endeavours, and FDI is a key component that is vital to sustained growth. The UK must become a more competitive player in the international market to retain existing business investment and attract new, globally mobile partners.”
NCUB calls for any new government to commit to developing a UK-wide FDI investment into R&D strategy in their first 100 days.
