Britain accounted for 30 per cent of all foreign investment in European digital tech in 2019, more than France and Germany combined.

The UK attracted 432 projects with foreign investment, a 36 per cent year-on-year increase, growing four times faster than the European tech average.

Digital tech has accounted for the largest number of foreign investment projects in the UK in every year since 2013.

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According to the EY 2020 UK Attractiveness Survey, R&D projects in the UK also grew by 38 per cent to 102, and now represent almost one fifth of the European market.

However, overall the UK lost out to France as the home for most foreign investment in 2019.

This is the first time the UK hasn’t occupied top spot since the survey started in 1997. The UK (1,109 projects in 2019) now sits second behind France (1,197). Germany is ranked in third place with 971 direct foreign investment projects.

EY’s UK Chairman, Steve Varley, said: “The UK secured an increasing share of European research and development projects, achieved a spectacular performance in attracting FDI in the digital economy, and was ranked in first place for new projects.”

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However, London had its best-ever year in terms of foreign investment with no signs of “levelling up” across the UK and project numbers down in some English regions. Almost half of all projects took place in the capital – 16 times as many as Manchester, the next most popular city.

Varley said: “Looking ahead, it’s vital that sustainable growth and ‘levelling up’ the UK economy continue to be at the heart of economic policymaking. Skills and infrastructure investment must support this objective. The report shows that FDI, especially in terms of digital investment, is still concentrated in London and the UK’s major cities. A concerted effort is required in order to spread the digital success story to the rest of the country.”

The US superseded the European Union last year as the UK’s biggest source of foreign investment, as Brexit transforms global economic ties, according to the survey.

Further reading

VC funding for UK tech start-ups breaks new record