David East leads FDI (foreign direct investment) and economic products at Bureau van Dijk. He recently spoke on a podcast from HLB International, a network of independent advisory and accounting firms, about recent trends and predictions around the investment climate in Europe. Andrew Mosby of HLB’s Global Accounting and Compliance Services group also joined the conversation.
- Global uncertainty has recently impacted the volume of investments in Europe and the UK, but there were also some positive trends:
- developments including Brexit have limited companies’ risk-taking when it comes to FDI
- while US investments into the UK paused in 2016 and 2017, US confidence in UK investments began to increase in late 2018.
- there’s a decrease in social cohesion: “The EU was set up to be a level playing field,” says East. “That’s not necessarily what we’re seeing today.”
- while numbers are generally going down in Europe, greenfield and M&A investments have slightly increased
Predictions for the UK and Europe
“It’s not all doom and gloom,” says East. “There are opportunities within the European marketplace, and the UK market is not dead yet.” While the UK may have become less attractive for FDI than in pre-Brexit years, the UK-market specific investment, for industries such as pharmaceuticals, hasn’t seen a decline.
- The UK could continue to thrive in the area of venture capital (more than £10 billion invested in British tech firms in 2019, up 44% from the year before).
- Outside organizations may be looking to acquire local UK businesses rather than building from the ground up.
- Expansion is a good opportunity for organizations to up-skill their staff through education, training and other workforce development areas—this is an area that European countries will need to focus on to stay attractive.
- There will be continued uncertainty around European investments into the UK until a trade agreement is negotiated, but there are big opportunities on the horizon.
Listen to the episode
You can listen to the episode using the links below: