North missing out on increased foreign investment in UK tech companies, report claims
Foreign investment in UK tech companies has reached a 10-year high - but growth in the North dropped by 34% last year.
Those are the findings of EY’s European Investment Monitor, which analysed a total of 269 deals.
London maintained its position as the city attracting the largest share of tech foreign direct investment (FDI) in Europe, with the capital securing 17% of all projects in Europe, three times more than Paris (56) and almost four more than Berlin (44).
But this report suggests that this investment has yet to filter through to the UK regions, with the funding gap between London and the rest of the UK widening as the former accounted for 63% of all inbound tech investments last year, up from 57% in 2015.
And Rahul Gautam, EY’s head of technology, media and telecommunications for the UK & Ireland, said there had also been a tangible drop-off in the North.
He said: "The UK, and London in particular, continue to lead Europe for inbound tech investment, but there is no room for complacency.
“Last year saw growth slow overall and the success in London was not mirrored in other regions. In fact the volume of tech investment fell in the remainder of England, excluding the ‘Midlands Engine’, with the ‘Northern Powerhouse’ hit particularly hard – experiencing a drop of 34% from 35 projects in 2015 to 23 in 2016.”
The research complements the ‘Tech North Investment Index: 2007 – 2016‘ report earlier this year, which found that despite a record total of £326.9m raised by Northern tech firms in 2016, the number of deals actually reduced (from 93 to 74) compared to 2015.