London has maintained its lead over other European cities ranking at the top of fDi’s 2008 Cities of the Future shortlist, and Scotland ranks top of the Regions of the Future shortlist.
The UK’s double victory comes after fDi revised its Locations of the Future methodology to take into account 75 indicators of locations’ attractiveness for investment and potential for economic development (see criteria).
London is likely to remain Europe’s dominant city for the foreseeable future. PricewaterhouseCoopers predicts London’s 2020 GDP will be $708bn, more than 15% higher than that of Paris, its nearest competitor.
Good economic indicators, including low inflation and one of the most favourable business, tax and regulatory climates, gave all UK locations a good head start in fDi’s ranking. Despite some of the worst traffic speeds in Europe, UK locations generally scored well for health and quality of life. Personal income tax rates, although not the lowest in Europe, are modest. Top rate taxpayers will pay less tax in the UK than in most other European countries.
Research into citizens’ happiness ranks the UK behind countries such as Switzerland and Ireland, but other studies shows that the UK is still one of the most favoured locations for a foreign posting.
fDi’s top 50 Cities of the Future include 16 from the UK, six from Germany and four from the Netherlands. UK locations also account for five of the top 25 regions, while Switzerland and France each have four locations in the top 25.
During the summer of 2007, fDi magazine sent questionnaires to more than 1000 cities and regions across Europe. We asked them to tell fDi about inward investment and plans for economic development.
Cities and regions provided information in five main areas. They were asked to describe their economic potential, including recent GDP growth, government economic initiatives and priorities. They also provided information on inward investment, including the volume and number of inward investments made in the past two years, the most significant investments made in 2007 (including the level of investment and number of jobs created) and the most significant investments of 2006.
Respondents also told fDi about their promotional strategy for attracting inward investment, including recent initiatives, incentives and regulatory changes introduced in the past two years. Cities and regions were asked to give details of current and recently completed major infrastructure and urban planning projects, including projected costs.
They were also asked to complete a tie-breaker question in which they outlined their unique selling point for investors. Answers to all these questions were put before a panel of independent judges.