London and the Île-de-France region, home of the French capital, Paris, stood out as the best-in-class in the ninth iteration of fDi Intelligence’s European Cities and Regions of the Future ranking.
Europe has shown resilience as a global investment destination even in the wake of the major disruptions caused by the Covid-19 pandemic and the Ukraine war. Despite major multinationals voicing concerns over its long-term competitiveness, the old continent remains the world’s biggest destination of foreign direct investment (FDI) as the energy transition drives major investment into energy sectors and the transformation of legacy industries, such as the automotive industry, data from foreign investment monitor fDi Markets shows.
Against this backdrop, the European Cities and Regions of the Future 2023 ranking benchmarked against each other the most promising investment destinations across Europe. It assessed as many as 370 European cities divided by population size into five groups — major, large, mid-sized, small and micro cities — as well as 148 European regions divided into three groups — large, mid-sized and small regions. It also assessed 38 local enterprise partnerships in the UK.
Everything was ranked by their performance across five subcategories: economic potential; business friendliness; connectivity; human capital and lifestyle; and cost effectiveness.
The European Cities and Regions of the Future 2023 ranking collected surveys from European investment promotion agencies for another category: the ‘FDI Strategy’ category. A judging panel made of four experts in investment promotion and economic development — Carolina Arriagada Peters, Sean Duggan, Judith O’Doherty and Firdaous Oussidhoum — as well as fDi’s editor Jacopo Dettoni and reporter Seth O’Farrell, reviewed 89 submissions from cities and regions across Europe. This is the only qualitative category in the otherwise data-driven ranking that feeds into the overall results.
London has maintained its crown in fDi’s European City of the Future title in the major cities category. Seemingly indifferent to the political turbulence that Brexit has triggered since 2016, the UK capital continues to attract more FDI projects than any other city across Europe as it leverages its strength as a truly global metropolis and its unique combination of talent, infrastructure and capital. Two big Brexit winners chase on London’s heels in the major cities category: Amsterdam and Dublin. The former is home of Euronext, the pan-European stock exchange that has unseated the London Stock Exchange as the continent’s biggest trading venue, with the latter benefitting from the pot-Brexit influx of financial services companies.
Hamburg, Germany’s second-most populous city, jumped to first place in the large cities category. Its proximity to the North Sea has made it a logistics centre and a key player in the EU’s push to install 65 gigawatts of offshore wind by 2030. Frankfurt and Kraków followed in second and third place, respectively.
In the mid-sized cities category, Zürich once again came on top thanks to its pool of highly educated talent and its established financial cluster. For the second year running, Lithuania’s capital Vilnius claimed the second spot, with Poland’s Wrocław coming in third.
Another two Swiss cities, Basel and Zug, held onto their top spots in the small cities and micro cities category, respectively.
On a regional level, Île-de-France has reclaimed its place atop fDi’s ranking of large European regions as the region managed to attract big ticket projects within, but also without Paris. England’s South East region came in second, as it lured nearly half the UK’s inbound FDI projects in recent years, while North Rhine-Westphalia, Germany’s industrial heartland, stood out in third place.
North Holland won in the mid-sized regions category, followed by Sweden’s Stockholm County and Finland’s Uusimaa. The Dublin Region won in the small-sized regions category, with Oslo County and Prague Region coming in second and third place, respectively.
The ranking also benchmarked UK local enterprise partnerships, with the London Local Enterprise Partnership winning first place.
FDI Strategy results
In the FDI Strategy category, the judges’ favour fell on Barcelona in the major cities category as the city continues to implement an articulated investment promotion strategy. The other judges’ picks feature Porto in the large cities bracket, Newcastle in the mid-sized cities category, Braga and Wolverhampton won joint first in the small cities category and Limerick won in the micro cities one.
On a regional level, Catalonia and Île-de-France came in first ex-aequo in the large regions category, Northern Ireland and Ireland South-East in the mid-sized and small regions category, respectively.