The south-east of England, including London, stood out as best-of-class in Europe in the eighth iteration of fDi Intelligence’s flagship European Cities and Regions of the Future 2022/23 ranking.
The study, which benchmarks the most promising investment destinations across Europe, showed that European locations have proven a certain degree of resilience to the inevitable investment fallout of the pandemic. While London confirmed its investment appeal, competition from peers across the continent has intensified as the likes of Amsterdam, Dublin, Paris and Frankfurt were successful in intercepting some of the companies that relocated from the UK in the wake of Brexit, and Barcelona and Catalonia gained the favour of the judging panel for their investment promotion strategies.
fDi’s European Cities and Regions of the Future 2022/23 benchmarked locations for their attractiveness to foreign direct investment (FDI).
As many as 356 cities were assessed and grouped by population size into five: major, large, mid-sized, small and micro cities. They were then ranked based on data collected across five subcategories: economic potential, business friendliness, connectivity, human capital and lifestyle, and cost effectiveness.
London once again led the field, retaining its status as a leading magnet for foreign investors among European biggest cities, despite Brexit prompting several foreign investors to reassess their European footprint. However, the city’s combination of talent, capital and connectivity remains no match for its European peers.
Other capitals, such as Amsterdam, Paris and Dublin, also placed in fDi’s top 10 major European cities category, as they refined their offer following Brexit to some degree of success. A notable new entrant was Bucharest, which came fifth, marking the first time it has placed in the top 10 ranking for major cities.
Frankfurt am Main, Germany’s fifth-largest city, was the winner of fDi’s large city category. As the home of the European Central Bank and eight of the world’s top 1000 banks, Frankfurt scores well for business friendliness and economic potential, and is perceived as a safe place for capital.
Zürich, Switzerland’s largest city, held pole position in the mid-sized city category, thanks in part to investors recognising the benefits of having a foothold in the city’s well-developed innovation ecosystem. The second-placed large city was Vilnius; the Lithuanian capital has become a sought-after location for tech firms and high value-added functions such as research and development.
Basel, Switzerland, placed first in the small cities category. It is home to the headquarters of several major life science companies. Another Swiss city, Zug, won recognition as the best of class in the micro cities category.
On a regional level, fDi’s research team assessed 148 European regions grouped into three size categories — small, mid-sized and large — to find those locations with the most potential to attract investment.
The south-east of England was recognised as the leading large European region overall. Meanwhile the Netherlands’ North Holland region retained its top place in the mid-sized regions category, while Ireland’s Dublin region took top place in the small regions category.
The ranking also benchmarked UK local enterprise partnerships, with the London Local Enterprise Partnership winning first place.
The European Cities and Regions of the Future 2022/23 ranking also collected surveys from local investment promotion agencies for the FDI Strategy category. It is the only qualitative category in the otherwise data-driven study, and also feeds into the overall results.
fDi’s editor Jacopo Dettoni and four external judges from the investment promotion and FDI industry reviewed 75 survey submissions from cities across Europe. The Barcelona City Council won the judges’ favour as the best top city for its investment promotion strategy, with Antwerp, Vilnius, the UK’s Doncaster and Latvia’s Valmiera coming on top in the large, mid-sized, small and micro cities category, respectively.
On a regional level, Catalonia Trade & Investment won among top regions for its investment promotion strategy. Dutch Brabant Development Agency and Invest Northern Ireland were the co-recipient of the top prize among mid-sized regions, while Ireland South East won among small regions.
This article first appeared in the February/March 2022 print edition of fDi Intelligence. View a digital edition of the magazine here.