The East Midlands Freeport and Investment Zone have potentially helped Nottingham and Derby improve their attractiveness to overseas investment significantly – despite the current economic challenges and lower GVA growth forecasts in 2025, says a new report.
The Irwin Mitchell and Centre for Economics and Business Research (Cebr) study examines the latest changes to Foreign Direct Investment (FDI) attractiveness of 50 locations based on 10 economic indicators.
According to the report, the Midlands’ only representation in the top 10 came from Birmingham, which ranked seventh overall. However, compared to the previous quarterly edition, there was a noticeable improvement in the fortunes of other cities in the region with Nottingham scoring 28.4 overall. Derby also improved its score to 33.5.
The report says both cities are benefitting from their relative proximity to the East Midlands Investment Zone and Freeport.
Investment Zones in the UK are designated areas where the government collaborates with local authorities and businesses to foster economic growth and innovation. These zones aim to leverage local strengths and untapped potential by offering a range of incentives, including tax reliefs, planning support, and business assistance.
Freeports are designated areas, typically located at seaports or airports, where normal customs and tax rules do not apply. These zones offer various incentives such as tax reliefs, simplified customs procedures, and reduced tariffs to encourage economic activity, trade, and investment. The aim is to create hubs of innovation and economic growth by attracting businesses that benefit from these regulatory advantages.
Bryan Bletso, Partner and Head of International at Irwin Mitchell, commented on the findings: “Despite the economy facing numerous challenges and setbacks, the level of foreign direct investment into the UK remains strong.
“Our latest report provides valuable insights into the factors driving investment decisions and highlights the importance of strategic locations such as Freeports and Investment Zones.
“The Department for Business & Trade’s latest statistics revealed London accounted for a third of all UK FDI projects in the 12 months to April 2024.
“The findings in our report, which highlight the growing influence of the East Midlands Investment Zone and Freeport, should therefore be considered by policymakers and businesses looking to attract and retain investment in the UK.
“Nottingham and Derby, in particular, are prime examples of how these strategic locations can enhance regional investment appeal.”
Pushpin Singh, Senior Economist at Cebr, said: “Our findings underscore the transformative potential of Investment Zones and Freeports in reshaping the UK’s investment landscape.
“Cities like Derby and Nottingham are emerging as significant beneficiaries, demonstrating how targeted infrastructure and skills development could potentially create hubs of economic opportunity.”
The Office for National Statistics recently published the latest FDI statistics, revealing that the value of the UK’s inward FDI position increased by £126.8 billion, reaching £2,068 billion.
According to the latest statistics from the Department for Business and Trade, 1,555 projects landed in the UK during the 2023/24 financial year because of FDI, resulting in 71,478 new jobs being created. Highlighting the dominance of London, the capital is attracting approximately the same number of FDI projects as the combined number for the Midlands, North West, North East, and Yorkshire.
