Inventing our future Collective action for a sustainable economy

Where are we now?
Long-term trends and
strategic challenges
21
Inward investment will continue to be important for the region. The UK
remains a leading location for foreign direct investment (FDI) and
headquarter operations in Europe, with a total of 204,000 jobs created
from FDI projects in the UK between 2001 and 2007. In the East of
England, the number of inward investment projects successfully completed
each year has been on an upward trend since 1999, with 52 in 2006/07
compared to 41 in 1999/00.
Markets are becoming more open and flows of trade and investment are
growing. This is largely due to economic growth and development in
emerging economies such as Brazil, China, India, Russia, Mexico, Taiwan
and South Korea. Many of these emerging economies have grown at rates
exceeding the UK’s growth rate. In 2005, India and China achieved annual
economic growth rates of 5.4 per cent and 10.2 per cent respectively. The
UK, alongside other major European economies, is forecast to account for
a smaller share of global output growth as emerging economies expand.
Figure 5
Total value of world merchandise exports 1996–2006, US $ billions
Total value of world merchandise exports 1996-2006, (US $ billions)
12,000
10,000
8,000
6,000
4,000
2,000
0
1996 97 98 99 00 01 02 03 04 05 06
Source: World Trade Organisation (2008)
Globalisation offers many opportunities and benefits for the East of
England. This includes new or expanding markets for regional goods and
services, the potential for international collaboration in research and
innovation or as a source of skilled workers.
Alongside the opportunities, there are challenges. The world is becoming
more competitive, and the emerging economies are competing on factors
other than cost. China is projected to double its present rate of investment
in R&D to 2.5 per cent of GDP by 2020. A survey of leading multi-national
corporations indicated that 75 per cent of planned new R&D facilities are
to be built in India or China.
Advanced industrialised regions such as the East of England will continue
to compete in the new global economy. The East of England retains
significant economic advantages in the global marketplace – not least
leading technology companies and research capability, proximity to
London – the world’s leading financial market – and international
transport gateways. However, to guarantee the region’s competitiveness,