Why foreign investment matters
Productivity is something I will come back to time and again in this blog, it is vitally important and the UK is very bad at it. It would however be far, far worse if it was not for Foreign Direct Investment; that is foreign firms setting up in the UK.
The reason why is obvious, no company sets up a foreign branch in an expensive, relatively well paid, high skilled economy because they want to churn out cheap knock offs and pay peanuts to their staff. You are only going to send your brightest and best to a country like the UK.
Which explains why the average FDI firm in the UK is 3 times at productive as a native one and there is also a knock on affect, UK companies improve to compete with or supply new foreign firms in their sector.
The UK desperately needs FDI and the competition it brings or it will slide back into relative economic decline.
https://jonty.substack.com/