The UK was the top destination for digital technology Foreign Direct Investment (FDI) projects in Europe last year, despite a 19% decrease in project numbers across the continent. In 2023, the UK ranked second in total FDI projects, behind France. However, despite this decline, the digital technology sector remained the leading sector for FDI in the UK and contributed significantly to the country’s overall FDI growth.
In contrast to the decreasing trend seen across Europe, the UK’s FDI growth in 2023 was largely driven by a resurgence in digital investment. The UK stood out as a strong market for tech investment, with companies prioritizing established and resilient tech markets like the UK over emerging ones. Despite faltering in 2022 due to high interest rates and a global sector contraction, the UK’s tech project total saw some relief in 2023.
Peter Arnold, EY’s UK Chief Economist, noted that “The UK’s performance in attracting digital technology FDI projects highlights its strength as a leading destination for tech investment in Europe.” The country accounted for more than a quarter (26.7%) of all digital tech FDI projects in Europe with 255 projects in 2023 alone. This represents an increase of 8.9% from the previous year and is a clear indication of the country’s continued appeal as a hub for innovation and technological advancement.
