UK Public ‘Overwhelmingly’ in Support of Foreign Direct Investment into the UK
Concerns persist about political influence, anti-competitive behaviour and technology transfer
LONDON, 4 February 2021 – The majority of people in the UK (74%) support overseas investment into UK businesses, according to new research by FTI Consulting (NYSE: FCN).
Now that the terms of the UK’s departure from the EU are settled, some expect renewed global interest in British businesses over the next 12 months, and landing new foreign direct investment (“FDI”) is clearly an important priority for the government, which created a new Office for Investment in November 2020 to support high-value, high-impact FDI across the UK.
Amid Brexit and the COVID-19 pandemic, the UK public are more open toward FDI than ever before. Since a similar survey of the UK population was undertaken in late 2012, UK residents were overall significantly less concerned both about which sectors attract overseas investment and from which countries it comes.
However, the UK population’s support for overseas investment is not unconditional. There are some fears about the impact of FDI, with 46% of respondents worried about ‘the potential for overseas companies to gain political influence’, 36% concerned about the potential for an acquisition ‘to reduce competition in the marketplace’ and 32% worried about foreign investors ‘acquiring technology’ and ‘obtaining knowhow in order to make [products] cheaper elsewhere.’
With these worries in mind, the UK public supports proactive government oversight of FDI, with 7 in 10 people agreeing that government should be involved in strategic decisions about investment from overseas.
There have been significant declines in concern about overseas investment from most countries since the original survey was carried out in 2012. However, the 2020 data show higher levels of concern about overseas investment from China and Russia, which both increased by approximately 10% on 2012 levels. The only business sector where UK residents were more concerned about overseas investment in 2020 was in telecommunications, though the increase recorded (3%) was modest.
Regardless of provenance or sector, the UK public said the top three attributes of prospective investors into the UK were honesty (58%), transparency (49%) and reliability (41%). The UK public also said that the view of a target company’s employees was more important to them in shaping their opinion about a deal (43% said this was important) than either the target company’s senior leadership (35%) or the senior leaders of the investor company (33%).
The UK public found commitments to UK job preservation and security (82%) as well as to increased research and development spending (80%) to be the most reassuring messages during an overseas acquisition of a British business, as well as commitments to retraining UK workers and developing infrastructure (79%).
“Attracting quality FDI is an important priority for the Westminster government – and this survey shows that the UK public is positive about overseas investment, if done in the right way,” said Christopher Clark, a Senior Managing Director at FTI Consulting. “What clearly emerges from this data is the importance of integrity and trustworthiness. Companies prepared to communicate honestly and clearly and honour their promises and obligations are likely to be welcomed, regardless of where they are from. The UK is home to some of the world’s most creative and innovative businesses, which require fresh investment to realise their global ambitions. It’s vital that as a country we seize every opportunity to tell their stories to overseas investors this year.”
“When we first conducted this research in 2012, David Cameron was the Prime Minister and the UK came together after successfully hosting the Olympic Games,” said Dan Healy, Managing Director and Head of Research at FTI Consulting. “One thing that hasn’t changed is the importance of employees from the acquisition target – more people see this group as important in shaping their view of a planned investment than any other. Positive messages around jobs and investment in innovation – where possible and appropriate to supply – remain hugely reassuring for the general public.”
Notes to Editors
- FTI Consulting conducted research amongst a representative sample of n=1,100 people in the UK general population on 9 and 10 December 2020. They are representative of the opinions and view of the general public at this specific point in time.
- The 2020 general population survey repeats many of the same questions from a previous survey into UK perceptions of foreign direct investment. This was carried out between 23 November – 3 December 2012 and involved a representative sample of n=1,086 people in the UK population. Results have been compared / contrasted where appropriate and relevant to do so.
- As a consequence of rounding, the answers of all questions may not add up to 100%.
- For more information on the research methodology used, please contact Kate Moffat or Andrew Todd.
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About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organisations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 6,200 employees located in 28 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $2.35 billion in revenues during fiscal year 2019. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.
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