What does the data say?

A large part of UK’s success in attracting in FDI has been because it is perceived as a gateway to the European market. With likely additional barriers to trade with Europe in a post Brexit environment, the question is how significant an impact this could have on FDI. 

The data available so far presents a mixed picture, but indicates that there has not been a drastic fall in investment since the UK’s decision to leave the EU in 2016, but rather a slight decline.

In 2015, there were 1,374 FDI projects announced in the UK, compared to 1,170 in 2017 – meaning a 16% decline. In terms of UK jobs created - in 2015 there were 95,992 jobs created as a result of FDI, with 79,704 created in 2017. 

But two years does not represent a long-term trend, given that annual figures can vary significantly depending on just a few major projects. And decisions around HQs for example, often take years to come to fruition.

Views of the non-British workforce

In our report Power Up: UK workplace, we explored the potential impacts of Brexit on the views of non-British workers, who make up over 10% of the UK workforce. The research found that despite Brexit, the UK remains attractive to many of these workers, but that a third could leave in the next five years, which is higher than the current average. This could result in a potential skills gap, particularly in sectors heavily reliant on the non-British workers.

Our analysis also found a correlation between sectors with the highest concentration of non-British workers and highest potential for automation. This supports a view that Brexit could be a catalyst for further automation, but businesses would need to be thinking about this now, since new technologies and processes, once identified, often take many years to come to fruition.