The software and computer services sector in the UK attracted more foreign direct investment (FDI) projects – 418 in total – than any other in 2016, creating almost 11,000 jobs.
In comparison, the financial services sector attracted 217 FDI projects and created 8,800 jobs, while FDI in the business and consumer services sector created 211 projects and 11,600 jobs.
The US is the UK’s largest source of inward investment, providing 557 of the total 2,265 FDI projects in 2016. The IT sector is a big draw for companies in Silicon Valley looking to gain access to the EU market, and the UK has traditionally been considered a good place to invest.
But the UK government’s plan to leave the EU has created uncertainty about the country’s viability for European operations. Companies of all sizes are considering their future options. This is not lost on other European countries. Since the Brexit vote, IT hubs across the EU have been promoting themselves to the established IT sector, as well as IT entrepreneurs.
Ireland, with its English-speaking population, liberal immigration laws and EU membership, may be a tempting option for US companies looking to break into Europe. For example, US-based multibillion-dollar payments technology company Stripe recently announced it was to set up its European hub in Ireland, and Deloitte plans to build its European blockchain lab in Dublin.
Shane Nolan, senior vice-president of technology at IDA Ireland, which promotes foreign investment in the country, recently told Computer Weekly that Brexit was a bad deal for Ireland from a trade perspective, but could see more FDI into the country.
It is also welcoming more people from outside Ireland, he said. “We have gone from having a small number of people in Ireland who weren’t born there, to 17% of the population since the 1980s. In the tech sector, this figure is close to 25%.”
In the financial services sector, Nolan said the IDA had brought 28 companies to Ireland as a direct result of Brexit. The IT sector could also benefit. Ireland has a wealth of IT talent available. According to figures from developer community Stack Overflow, 9% of private sector jobs in Dublin are software developers.
Dublin is the main focus for IDA Ireland, but it also wants to build hubs in Cork, Limerick and Galway. Other cities attracting IT investments in Europe include Berlin, Amsterdam, Paris and Stockholm.