London's long lead

London is an FDI heavyweight; it is both the world's largest source and destination for crossborder investment. As data from greenfield investment monitor fDi Markets shows, between 2008 and 2012, the city attracted $29.4bn-worth of new investments, twice as much as Shanghai and nearly seven times more than New York.

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London's success, however, has not led to complacency. As host city to the 2012 Summer Olympics, the UK capital thrust itself onto the world stage. Boris Johnson, London's mayor, says that the Olympics was an invaluable opportunity to present London as the ever-changing, vital world city that it is.

“I think people saw London very clearly during the Olympics. They could see the historic buildings but also the 21st century architecture. They could see that London has huge development opportunities, many green spaces, a very low crime rate and a young, dynamic population,” he says.

With the majority of the Olympics events held in Stratford, a district in east London, some critics dubbed the event as the '2012 Stratford Olympics', complaining that it did not represent the whole city. But, according to Mr Johnson, such criticism is unfair. “It is great to have eyes set on east London, because that is where so many investment opportunities exist. But we also had Greenwich, Wimbledon and Wembley, [represented during] the games,” says Mr Johnson.

London does not take its FDI appeal for granted, however, and Mr Johnson says that the city goes to great lengths to accommodate investors. “London cares for investors as a mother bear cares for her cubs. Anybody who decides to invest in London is treated as a king and we roll out the red carpet for them,” he says.

When asked to elaborate on this royal treatment, Mr Johnson points to tax breaks and the soft landing services provided by London & Partners, the city's promotional organisation. “We have got biotech in London now, we have creative media, and all sots of sectors are growing fast in London. It happens on its own, but we, of course, strive to create good conditions for businesses to grow,” says Mr Johnson.

Sir Richard Leese

Manchester punches above its weight

Unlike London, Manchester has never had the privilege of hosting the Olympics, although it came close in 2000, when its bid to host the games made it to the third round of voting. But the international sporting spotlight has shone on the city for another reason: its two football clubs, Manchester United and Manchester City.

Sir Richard Leese, leader of Manchester City Council since 1996, admits that this has helped attract the attention of potential investors. “The two football clubs help in the sense that they open doors,” he says. “Once we go through those doors, it is up to us to help with an infrastructure, skills and connectivity."

It is not just Manchester's football clubs that keep the city on investor's radars, however. “We have an enormous asset in our workforce, as 7.2 million people of working age live an hour away from central Manchester, and the city is a home to the biggest universities in the country,” says Mr Leese.

Between 2008 and 2012, Manchester was the second most popular UK destination for greenfield foreign investments, according to the data from fDi Markets. In the past four years, the city has attracted 120 foreign companies, including Svenska Handelsbanken, a Swedish bank with annual turnover of $7.4bn. In 2008, the bank chose Manchester as the centre for its northern UK operations. More recently, it decided to increase its presence in the city by doubling the size of its offices and employees in Manchester.

One-quarter of all greenfield FDI projects launched in Manchester between 2008 and 2012 are in either business or financial services but, according to Mr Leese, a number of other sectors offer high returns on investment. “We continue to target financial services but also advanced manufacturing, as this is sector that is coming back to the country,” he says.

Manchester is also establishing itself as one of the UK's biggest media hubs. The newly built MediaCityUK, located in Salford, a city on the outskirts of Manchester, has attracted companies including the UK's national television channels BBC and ITV. “We already see the growth of investments in media, especially in digital outlets and we expect to see more of that in the future,” says Mr Leese.

Albert Bore

Birmingham keeps its cool

Although it is the UK's second largest city by both population and area, Birmingham has been unable to attract the same level of FDI as the country's first and third largest cities, London and Manchester. According to Albert Bore, leader of Birmingham City Council, Birmingham has many of the same attributes as its counterparts to the north and south.

"It is an attractive and well-connected city, with a range of arts and cultural offerings,” he says. But he admits it is still suffering from a negative perception that dates back to the 1970s and 1980s, when it was a heavily industrialised city with a high crime rate. “The perception is different to the reality. So it is sometimes difficult to convince people from other parts of the country that Birmingham is not a dirty, industrial city any more,” says Mr Bore. “It is easier to get our message further afield, than in other major UK cities."

In a bid to shake off this image, Birmingham is undergoing a major transformation. Its 'Big City Plan' will see the city centre completely redeveloped and will create 5000 new homes and 50,000 new jobs over the next 20 years.

Capital is also being deployed to attract FDI. Among the latest initiatives are the $54.5m expansion of Birmingham Science Park Aston, the launch of the city centre enterprise zone and the establishment of the Mobile Investment Fund, a loan programme for investors which is funded by the council. According to Mr Bore, such initiatives, and the successful implementation of Business Birmingham, the city's inward investment programme, is already paying dividends.

“Looking at FDI projects between 2011 and 2012, we saw a 40% increase, whereas the UK saw a 2% decline. I think that confirms that there are many reasons to keep Birmingham in mind when investing,” says Mr Bore.

It is not just the increasingly attractive business environment that is proving appealing to investors, the city also boasts the Bullring, a large shopping and leisure complex, as well as a vibrant clubbing scene. “I was in a meeting the other day, when one of my cabinet colleagues started bemoaning the fact that her younger brother keeps visiting her all the time. He travels from the south of England to Birmingham for the clubs. So, when it comes to our club scene, clearly we are a 'cool' city,” says Mr Bore.

Peter Soulsby

Leicester's diversified demographic

Just 70 kilometres east of Birmingham is the city of Leicester. With a population of 295,000, it may not be as big as its neighbour, but it is no less ambitious in its plans to attract investment.

Peter Soulsby, the mayor of Leicester, believes that the city's strength lies in its diversified demographic. “We are the first UK city to have the majority of its population tracing their roots outside of the UK. That is an enormous strength, as these people bring with them a very wide variety of skills and come to Leicester to make the city their home and have an enormous ambition for themselves and their families,” he says.

According to Leicester City Council, 40% of the city's population has an ethnic minority background, with immigrants coming mostly from India, Bangladesh, Pakistan, Uganda, Kenya and China. Mr Soulsby says that this demographic creates additional investment opportunities for investors willing to provide access to products and services catering for ethinc minorities, which “keep their cultural links to their home country or country of ancestors, very strong”.

In 2010, the city launched a public-private economic development entity, Leicester & Leicestershire Enterprise Partnership (LLEP), to help new investors. “LLEP is a vehicle delivering inward investments and I partner with them to make things work,” says Mr Soulsby.

As well as the creation of LLEP, Mr Soulsby points to the establishment of the mayoral post in December 2010, as having been a great boost to the city's investment efforts. “In the past, when I would introduce myself as the council leader, people would scratch their heads because they did not know what this title meant and what I can or cannot do," he says. "The same goes for investors. They do not want to meet someone who has a ceremonial chain on, but someone who makes decisions."

Mr Soulsby served as Leicester's council leader for 15 years and, most recently, represented the Leicester South constituency in the House of Commons. “Although you can have a lot of influence in parliament, as a mayor you can actually make things happen. I have been mayor for two years now and still do not regret giving up my Member of Parliament seat,” he says. “I think the cities in the UK that do not have mayors are missing out. Investors are familiar with that type of governance."

George Ferguson

Bristol's specialist talents

Bristol is another UK city to have recently established a mayoral post when it voted in favour of the position in May 2012. George Ferguson, elected as mayor in November 2012, is positive about the newly created role. “After serving my post for a few months now, I can tell that it energises people, both inside of the city council and outside. The city has the mayor capable of doing things and who is open for business, and we are strongly positioning Bristol as a star city,” he says.

Much like his counterpart in London, Mr Ferguson attracts attention as much for his personality as for his politics. For instance, Mr Ferguson has taken to wearing bright red trousers during all his public appearances. A successful entrepreneur, with an expertise that includes running an architectural practice as well as a brewery, Mr Ferguson knows the value of marketing and is determined to put his city on the map.

“We are the best place for investment and I challenge anybody to say there is a better place,” he says.

Among the city's main advantages are its educational institutions – University of Bristol and University of the West of England – and its creative industries and aerospace cluster. “It is a great place to live, we have an extraordinary variety of interesting businesses and we are very skilled,” he says.

Historically, Bristol's fortunes have been connected with logistics and manufacturing. But, since the 1960s, the city has been developing its capabilities in the aerospace sector, which has brought a number of industry giants to the city, including BAE System and Airbus, as well as the Defence Equipment and Support, a department of British Ministry of Defence.

As well as aerospace players, the city also attracts a steady flow of crossborder investments in sectors such as software and IT, financial services, and transportation. Mr Ferguson says that the city is open to any kind of investments, however, and is willing to provide customised help.

“I am independent in terms of party politics, and I have a business background, so I invite people to come and tell me what they want to do and we will try and make it work,” he says.