Inward Investment in Wales

Written evidence from UKTI and the Wales Office

INTRODUCTION

This evidence is provided by the UK Government. UK Trade & Investment (UKTI) is the government department with lead national responsibility for trade and investment. The Trade and Investment team at the Welsh Assembly Government (formerly International Business Wales) has lead responsibility for marketing Wales to foreign investors. The two organisations work together closely to promote the UK and Wales to potential investors.

UK Trade & Investment (UKTI) is the government department that helps UK-based companies succeed in the global economy and assists overseas companies to bring their high quality investment to the UK. UKTI has two parent departments: the Department for Business, Innovation and Skills (BIS), and the Foreign and Commonwealth Office (FCO). UKTI has staff in British Embassies, High Commissions and Consulates-General in 96 markets, including 33 that focus on attracting high quality inward investment into the UK. UKTI also works in close partnership with the Ministry of Defence (MOD), drawing employees and associated running costs from both parent departments, as well as employees on loan from the MOD. UKTI also has its own stream of programme funding.

Wales has a history of performing well in attracting inward investment in comparison to the rest of the UK, attracting substantially more than its population share of new and safeguarded jobs in the early to mid-1990s. That figure has fallen over the last ten to fifteen years to something equating more closely to a population share.

Wales has a number of benefits to offer potential investors, some of which are set out below:

· Skills: Wales long traditions of expertise in a number of sectors, including engineering and manufacturing while more recently, it has developed capabilities in areas such as IT, financial and professional services.

· Proximity to UK hubs and European Marketplace: As well as being a destination in itself, Wales offers easy access to London as a financial centre and offers good transport links to the rest of the UK and Europe.

· Property: Property in Wales is competitively priced in comparison with the rest of the UK.

· Exceptional quality of life: Wales offers easy access to stunning landscapes and beautiful beaches as well as exceptional cultural and sports facilities.

The evidence presents the Government’s view of inward investment in Wales as it currently stands and examines the changing future investment landscape. We understand that the Welsh Assembly Government will be submitting its own evidence to this enquiry and so we will only examine devolved aspects of attracting inward investment briefly.

The evidence presented in the memorandum covers:

· The current position, in particular examining the most recent inward investment figures;

· The role of the Trade and Investment team in Welsh Assembly Government (formerly International Business Wales)

· The role of the UK Government in attracting inward investment to Wales with particular attention paid to UKTI;

· The support available to organisations involved in promoting Wales, focussing on support provided by the coalition Government;

· Public sector investment, focussing in particular on recent successes and the relocation of Government departments to Wales;

· Conditions to attract inward investment to Wales, looking in particular at recent coalition Government policy changes in this regard, and at the investment business drivers; and

· Conclusion and forward look examining the future roles of the Wales Office and UKTI.

· International Business Development Forum principles and guidelines (Annex A)

· Supporting charts (Annex B)

· Investment examples (Annex C)

This presents an overall picture of a changing landscape amongst the organisations working on attracting inward investment to Wales. Both the Trade and Investment team at the Welsh Assembly Government and UKTI will undergo programmes of substantial change in the coming months that may affect the support infrastructure for potential inward investors.

Again, we would expect the Welsh Assembly Government to address the changes set out in their Economic Renewal Programme in more detail in their evidence.

The Wales Office will also play an important role in both promoting Wales as an investment destination, engaging with international organisations and facilitating cross-Government working on inward investment. Wales Office Ministers and officials have already put this into motion but this work is at an early stage. The Secretary of State for Wales has already met with the Government’s Trade Advisor, Lord Brittan and a meeting with the new Trade Minister will take place soon after his appointment in January to further progress this work. In addition, the Secretary of State for Wales has set up a Business Advisory Group in order to gather information from businesses and academics in Wales about the state of the Welsh economy, including the conditions necessary for successfully attracting inward investment.

1. CONTEXT

1.1. Historically, Wales has performed well in attracting inward investment with around £7 billion invested between 1980 and 1995. By the mid-1990s, inward investment in Wales had begun to fall, with 11.8% of new and safeguarded jobs in the UK going to Wales in 1992 but only 5.6% of jobs going to Wales by the middle of that decade.

1.2. A detailed analysis of inward investment in Wales over the last five years is included at Annex B along with headline data for the past 20 years, country breakdown data from 1990-1991 and full sector breakdown data from 1998-1999. Tracked over the past five years, Wales’ share of the total number of UK investment projects has ranged between 3.4% and 4.6%. In 2009/10, 65 of the total number of 1619 investment projects in the UK went to Wales – 4 % of the total. These figures are broadly in line with Wales’ share of regional GVA [1] , which according to ONS was 4% in 2008.

1.3. Significantly, though, Wales receives a higher proportion of jobs from inward investment projects with these shares varying from between 3.4% in 2008/09 to 7.8% in 2006/07. This suggests that Wales generally attracts larger investment projects that deliver more jobs.

1.4. According to UKTI data, of the 12 geographic areas, made up of the three Devolved Administrations and nine English Regions, in 2009-2010 Wales ranked 4 th in the UK for attracting new FDI related jobs (see 2.1).

1.5. UKTI FDI project and job statistics are based on:

· information provided by the company at the time of the announcement of the decision to invest in the UK; and

· the investing companies’ best estimates of capital expenditure and jobs created/safeguarded in the

first three years.

The figures do not take account of subsequent developments.

1.6. There is no requirement for investors to notify UKTI of new investment projects, and so the figures only include those projects where UKTI and/or a partner organisation, such as International Business Wales, were involved, or which have otherwise come to our notice.

1.7. There are already a number of large international companies based in Wales including Amazon, Airbus, Ford and Toyota with around 500 international companies in total, basing themselves in Wales.

The Welsh Development Agency

1.8. Pre-devolution, attracting inward investment into Wales fell within the remit of the Welsh Development Agency (WDA) under the old Welsh Office. The WDA was set up in 1976 to encourage business development and investment in Wales.

1.9. Employing several hundred workers, the WDA was one of Wales' most significant employers with a network of offices worldwide to supplement its Welsh base. Following devolution, the WDA became an Assembly Sponsored Public Body

1.10. Prior to its abolition in April 2006, the WDA was credited with creating thousands of jobs and securing billions of pounds in investment. In addition, the WDA has been credited by some with creating a brand that was recognisable worldwide which may have contributed to its inward investment successes.

1.11. It should be noted, though, that as per paragraph 1.1 above, the number of jobs generated by inward investment during the organisation’s tenure did fluctuate. Figures for the mid-1990s, for example, are comparable with recent years during which International Business Wales had taken over the WDA’s remit with regard to inward investment.

1.12. The WDA was merged with the Welsh Assembly Government in April 2006 with its network of international offices falling under the remit of International Business Wales.

International Business Wales

1.13. International Business Wales (IBW) has provided a similar international network to the WDA in order to promote Wales as an inward investment destination. It currently has offices in thirteen countries, including three locations in China – Beijing, Shanghai and Hong Kong. Other offices are located in Germany, India, Australia, the United Arab Emirates and the United States. IBW also maintains an office in London in order to encourage inward investment from both foreign and UK companies based in London and the South East.

1.14. In the summer of 2009, IBW took its largest ever trade mission to the United States with 80 companies attending the Smithsonian celebrations in Washington DC to showcase Wales and its products.

1.15. International Business Wales is also responsible for promoting Welsh businesses overseas and as with inward investment its efforts seem to have born fruit over the last decade. Total Welsh exports rose by 47% from 1999 to 2009 with exports to non-EU nations rising by 167% in the same period. For the UK as a whole, exports rose by just over 32% in the same period.

1.16. More recently, IBW has faced occasional criticism, such as through the Massey report published last year. In July this year, the Welsh Assembly Government took the decision to merge the organisation with the Department for Economy and Transport.

2. CURRENT POSITION

Inward Investment to Wales: Overview of the current position

2.1 Wales is the 6th most attractive destination for inward investment projects in the UK and attracts between 2 to 9% of all projects, averaging 4.7% over 10-years. However, according to fDi Markets [2] the average number of jobs created per project in Wales from 2003 to 2010 was 173. This compares to the UK average of 105. In 2009-2010 Wales was ranked 4th most successful geographical area for attracting new FDI related jobs.

TABLE 1

Foreign direct investment across the UK’s nations and regions (by number of projects)

Region	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	Total
South East (1)	281	168	169	169	242	287	379	410	342	346	2,793
Scotland	55	35	25	39	64	33	62	69	53	51	486
West Midlands	48	31	17	32	46	43	49	54	37	51	408
North	17	11	34	46	50	49	31	42	37	39	356
North West	39	20	10	33	28	27	37	26	51	37	308
Wales	35	19	27	42	35	13	16	22	35	20	264
South West	27	9	31	28	22	20	23	9	29	32	230
Yorkshire & Humber	27	23	15	25	24	17	14	16	22	42	225
East Anglia	15	16	18	5	25	30	28	29	30	19	215
Northern Ireland	20	21	13	10	16	18	17	26	19	25	185
East Midlands	10	17	10	24	11	22	29	10	31	16	180
Total	574	370	369	453	563	559	685	713	686	678 [1]	5,650
Wales’s %	6%	5%	7%	9%	6%	2%	2%	3%	5%	3%	4.7%

(1) includes London

Source: Ernst & Young’s European Investment Monitor

TABLE 2

Inward investment – New Jobs in each of last ten years

	New Jobs
Year	UK	Wales	%	Ranking against the UK’s 12 geographic areas
2000/01	71,488	4,520	6.3%	7
2001/02	34,087	3,872	11.3%	1
2002/03	34,396	4,083	11.8%	3
2003/04	25,463	4,064	15.9%	1
2004/05	39,592	2,593	6.5%	9
2005/06	34,077	3,132	9.2%	6
2006/07	36,526	3,379	9.3%	4
2007/08	45,051	3,743	8.3%	6
2008/09	35,111	2,185	6.2%	7
2009/10	53,358	3,431	6.4%	4

Source: UKTI data

2.3 Wales has also sustained its inward investment performance through the economic downturn better than the UK as a whole. Overall investment into the UK in 2009-2010 fell by 7% on the previous year while investment into Wales rose by 8%. The number of jobs associated with that investment showed that while UK job numbers were up 20% on the previous year, job numbers in Wales almost tripled (see Table 2)

       

TABLE 3

UKTI recorded successes in the UK by Investment Type – 2008/09- and 2009/10

Year	Project Type	No of Projects	No of New Jobs	No of Safeguarded Jobs	Total No of Associated Jobs
2008/09	Acquisitions, Mergers & JV’s	457	719	21,882	22,601
	Expansion	460	15,975	20,222	36,197
	New	827	18,417	1,325	19,742
	TOTALS	1,744	35,111	43,429	78,540

Year	Project Type	No of Projects	No of New Jobs	No of Safeguarded Jobs	Total No of Associated Jobs
2009/10	Acquisitions, Mergers & JV’s	225	1,153	9,844	10,997
	Expansion	544	17,435	29,391	46,826
	New	850	34,770	1,753	36,523
	TOTALS	1,619	53,358	40,988	94,346

UKTI recorded successes in Wales by Investment Type – 2008/09 & 2009/10

Year	Project Type	No of Projects	No of New Jobs	No of Safeguarded Jobs	Total No of Associated Jobs
2008/09	Acquisitions, Mergers & JV’s	12	75	329	404
	Expansion	18	589	200	789
	New	30	1,521	0	1,521
	TOTALS	60	2,185	529	2,714

Year	Project Type	No of Projects	No of New Jobs	No of Safeguarded Jobs	Total No of Associated Jobs
2009/10	Acquisitions, Mergers & JV’s	3	13	67	80
	Expansion	34	1,467	3,864	5,331
	New	28	1,951	0	1,951
	TOTALS	65	3,431	3,931	7,362

Source: UKTI data

2.4 Of the 65 projects recorded by UKTI for Wales: 63 were assisted and 2 landed without any government assistance: (UKTI assisted: 3 (8%); UKTI working with WAG assisted: 15 (24%) and WAG assisted: 45 (71%)). Therefore, UKTI was involved in 18 projects, or 29%, of the total projects assisted.

Foreign Direct Investment in 2009: The Global, European and UK Context

2.5 The UNCTAD World Investment Report 2010 valued global Foreign Direct Investment (FDI) inward flows in 2009 at US$1,114 Billion, a decrease from the previous year (US$1,770 Billion). The UK and its competitors were not immune from the downturn in FDI Flows. The flow of inward FDI into the UK in 2009 was US$45.6 Billion, a decrease from the previous year (US$96.9Billion).

2.6 However in relative terms, and against the backdrop of reduced global FDI flows and world recession, 2009 was a good year for inward investment to the UK. In 2009, the UK attracted and retained US$1,125 Billion of FDI Stock, an increase from the previous year [1] . Within the UK, Wales performed relatively better than average: overall investment into the UK in 2009-2010 fell by 7% on the previous year while investment into Wales rose by 8%. The number of jobs associated with that investment showed that while UK job numbers were up 20% on the previous year, job numbers in Wales almost tripled.

2.7 The number of FDI projects in Europe fell by 11% to 3303 in 2009, and FDI generated 16 % fewer jobs in the same period [2] . According to Ernst & Young, the UK was the top country in Europe in 2009 in respect of number of FDI projects and job creation, and the most attractive destination in Europe for FDI. Annex 1 for full investment project figures.

Foreign Direct Investment to Wales

2.8 Overall investment into the UK in 2009-2010 fell by 7% on the previous year while with 65 projects, investment into Wales rose by 8%. The number of new jobs (3,431) was 57% up on the previous years; the number of safeguarded jobs (3,931) was an impressive 643% up on the previous years and total jobs associated with investment in Wales was 7,362, up some 171% on 2008-2009 figures. Table 2 provides statistics on inward investment in Wales and the rest of the UK over the last two years (2008-09 and 2009-10).

2.9 According to fDi Markets [3] the average number of jobs created per project in Wales from 2003 to 2010 was 173. This compares to the UK average of 105   . Additionally, Wales attracted an average of 6% R&D over 10 years (Table 3).

TABLE 4

R&D Investment Projects attracted to Wales

Source: European Investment Monitor

Summary:

· Wales attracted an average of 6% R&D over 10 years

Region	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	Total
South East (UK)	18	14	8	6	12	12	12	15	18	14	129
Scotland	9	7	3	4	8	10	12	16	9	14	92
East Anglia	3	3	5	1	7	10	3	7	9	5	53
Northern Ireland	4	5	2	3	5	6	4	5	5	7	46
North	1	1	3	2	2	3	5	4	7	3	31
Wales	2	1	2	2	5	1	2	6	5	3	29
North West	2	1	2	4	2	2		3	2	9	27
West Midlands	4	2		1	1	2	1	5	3	8	27
East Midlands		3	1	2	2	3	4	1	2	2	20
South West	2		1	2	1	3	2	1	4		16
Yorkshire & Humber	2	2		1	3	2	2		1	3	16
Total	47	39	27	28	48	54	47	63	65	68	486
Wales’s %											6%

Source: European Investment Monitor

   

3. UK GOVERNMENT ROLE AND SUPPORT AVAILABLE

UK Government Role

3.1UK Trade & Investment (UKTI) is the government organisation that helps UK-based companies succeed in the global economy. It tailors its services to the needs of individual businesses to help them maximise their international success. UKTI also helps bring high quality inward investment to the UK’s economy, providing support and advice to investors at all stages of their business decision-making.

Foreign Direct Investment (FDI) – UK and Wales

3.2 UKTI markets the UK as a whole as a destination for FDI, while specific marketing of Wales as a FDI destination rests with the Trade and Investment team in the Welsh Assembly Government (formerly IBW). However, the two organisations work together closely, under an agreed formal mechanism [1] , to maximise inward investment successes.

Trade and Investment team in Welsh Assembly Government (formerly International Business Wales)

3.3 International Business Wales was formed in April 2006 by the Welsh Assembly Government to promote trade and attract inward investment, following the merger of Wales Trade International (the trade arm of the Assembly) and the International Division of the Welsh Development Agency (an executive agency responsible for inward investment). The Trade and Investment team in the Welsh Assembly Government receives its own funding for trade and investment activities through the Welsh Assembly Government; and separate funding through the EU Structural Funds Programme. In addition, companies in Wales have access to the majority of UKTI programmes and services (mainly trade- related).

3.4 The Trade and Investment team at the Welsh Assembly Government (formerly International Business Wales) provided a similar international network to the WDA in order to promote Wales as an inward investment destination. It currently has offices in thirteen countries, including three locations in China – Beijing, Shanghai and Hong Kong. Other offices are located in Germany, India, Australia, the United Arab Emirates and the United States. It also maintains an office in London in order to encourage inward investment from both foreign and UK companies based in London and the South East.

3.5 In the summer of 2009, The Trade and Investment team at the Welsh Assembly Government (formerly International Business Wales) took its largest ever trade mission to the United States with 80 companies attending the Smithsonian celebrations in Washington DC to showcase Wales and its products.

3.6 The Trade and Investment team at the Welsh Assembly Government (formerly International Business Wales) is also responsible for promoting Welsh businesses overseas and as with inward investment its efforts seem to have born fruit over the last decade. Total Welsh exports rose by 47% from 1999 to 2009 with exports to non-EU nations rising by 167% in the same period. For the UK as a whole, exports rose by just over 32% in the same period.

3.7 More recently, following the Massey Report, WAG took the decisions to merge IBW with the Department for Economy and Transport.

3.8 The Welsh Assembly Government’s Economic Renewal Programme published in July set out, inter alia, changes to its delivery of trade and investment services in Wales. It confirmed that business support in future will focus resources on where they can add most value, acting as an enabler of growth for the Welsh economy as a whole, rather than a significant direct deliverer of services to individual businesses. There will be a sector based strategic approach to business support. The key sectors will be ICT; energy and environment; advanced materials; creative industries; life sciences; and financial and professional services. Foreign Direct Investment and Trade will be an integral part of the sectoral approach.

3.9 Under the Economic Renewal Programme, International Business Wales ceased to be a separate function of the Department of Economy & Transport. Instead, integrated sector teams in the Welsh Assembly Government will be responsible for securing new investment, as well as targeted aftercare. Welsh Assembly Government also announced a review of its overseas offices network, which we understand will be concluded by the end of the year.

Potential for Increased Investment in Wales

3.10 Economic development, including trade and investment, is devolved, and the Welsh Assembly Government is submitting to this inquiry.

Collaborative Working UKTI and Wales

3.11 The principles and guidelines (Annex A) of the International Business Development Forum (IBDF), govern the way in which UK Trade & Investment and the English RDAs work together to manage the flow of Foreign Direct Investment (FDI). The Devolved Administrations, including the Trade and Investment team at the Welsh Assembly Government (formerly International Business Wales) have also agreed to co-operate with these arrangements in line with their devolved powers. The overall aim is to maximise the amount of knowledge-driven FDI for the UK, to improve transparency and partnership working, to strengthen the UK Brand, avoid perceptions of wasteful competition and the risk of customer confusion, and to promote the more efficient use of public money across the network.

3.12 The following key client relationship principles govern this work and are designed especially for use with strategically important inward investors with the propensity to make high value investment in the UK economy. These principles rely on stake holders cooperation. Four key principles for effective Client Relationship Management:

1. That we make a priority of winning the business for the UK and acting in the national interest;

2. That we are Client-oriented, i.e. we put the Client first and adopt a true service ethic towards them;

3. That we focus on building long term relationships with Clients;

4. That we maintain transparency across the network with prompt sharing of information whilst respecting Client confidentiality where appropriate in line with the IBDF Guidelines.

3.13 IBDF members operate transparently. Project information is shared through an electronic communications platform allowing the Devolved Administrations of Wales, Scotland and Northern Ireland, and the nine English Regional Development Agencies to see and respond to potential projects. Propositions prepared by the DAs and RDAs for potential projects are collated by UKTI. The final document is delivered to the client, usually, by UKTI overseas.

3.14 The last formal IBDF meeting took place on 28 January 2010 in London, at which International Business Wales participated. Regular teleconferences take place between UKTI and the Devolved Administrations, the most recent being on 3 November 2010, at which the Welsh Assembly Government participated.

Interchange between Trade and Investment team at the Welsh Assembly Government (formerly International Business Wales) and UKTI

3.15 Trade and Investment team at the Welsh Assembly Government (formerly International Business Wales) and UKTI cooperate and foster knowledge transfer through interchange of staff. For example IBW seconded a China inward investment specialist to UKTI for a period of three months in 2009-2010.

Training

3.16 Trade and Investment team at the Welsh Assembly Government (formerly International Business Wales) regularly hosts and provides training for members of UKTI’s global network to ensure that the national investment messaging accurately reflects Wales offer to investors.

Sectoral coverage

3.17 UKTI works collaboratively to attract, retain and add value to inward investment for the UK. The Project Teams and their partners work with foreign-owned companies where the UK has a compelling proposition, focussing particularly on assisting the highest value inward investment to enter the UK. The work includes influencing the decision to invest in the UK, development of existing investors’ footprints in the UK, and helping to grow existing investors into third markets.

3.18 UKTI currently runs 11 sector support teams, with UKTI Defence & Security Organisation providing additional support for these sectors. UKTI’s sector teams include the sectors that feature strongly in Wales (ICT; energy and environment; advanced materials; creative industries; life sciences; and financial and professional services.). All sector support is UK-wide.

3.19 UKTI’s sectorally-focused Investment Project Teams work in close collaboration with: UKTI’s global operation, other Government Departments, the Devolved Administrations, including the Welsh Assembly Government, the English Regional Development Agencies and private sector experts in virtual teams.

3.20 The virtual teams offer extensive bespoke business and policy expertise and advice (including skills, infrastructure, tax, financial, R&D and sector specialists). Bespoke propositions are developed to help companies make their location decision, and to help them to grow within and from the UK internationally.

4. PUBLIC SECTOR INVESTMENT

Public Sector Investment

4.1 Much has been made of the size of the public sector in Wales and its future role in economic growth. In particular, Wales has a relatively high proportion of public sector employment compared to the rest of the UK with 35% of jobs in Wales in 2009 being classed as in public administration, education and health. This equates to 392,246 jobs and is an increase from 328,816 jobs, or 32%, in 2000.

4.2 The corresponding UK statistics show 28% of jobs in public administration, education and health last year, and increase from 24% in 2000. In Scotland in 2009, the corresponding figure was 32% and in Northern Ireland it was 35%, the same as in Wales. This indicates high levels of public sector employment across all three devolved nations but it should not be taken necessarily as an indication of an overlarge public sector.

4.3 The employment level in Wales, according to the latest Labour Market Statistics (July to September) is currently 67.1%, the lowest in the UK, barring Northern Ireland. Therefore, the high rates of public sector employment as a proportion of employee jobs do not necessarily equate to a large public sector. Rather, it indicates a need for the private sector to grow to expand employment.

Civil Service Relocation Programmes

4.4 The Office of Government Commerce (OGC) is responsible for the former administration’s relocation programme which committed to relocating a substantial number of public sector activities from London and the South East of England to other parts of the United Kingdom.

4.5 In addition, Ian Smith’s Review: Putting the Front Line First: Smarter Government, published in March this year, recommended a target of relocating a further 15,000 civil servants over the next five years.

4.6 Up to 31st December 2009, 21,541 posts had been re-located from London and the South East to the rest of the UK. Wales has received 3,629 of these posts and is the third highest receiving location behind the North West (4,794) and Yorkshire and the Humber (4,262). Newport has received the most posts in Wales, with 1,285 having relocated to the city, the majority of posts from the Prison Service and Office for National Statistics (ONS).

Government Investment in Business

4.7 The coalition Government is committed to creating the right conditions for the private sector in Wales to grow, including through inward investment (see Section 6) but we recognise the role that certain targeted public investment in business can deliver. Given the UK’s fiscal position, though, we have examined investment decisions made by the previous Government on a case by case basis in order to assess affordability.

4.8 Where affordability can be demonstrated, we have proceeded with investments as planned, with the £340 million of investment in Airbus to develop the new A350XWB aircraft, being a notable example in Wales.

5. CONDITIONS TO ATTRACT INVESTMENT

Conditions to Attract Inward Investment

5.1 Through the Budget in June and the Comprehensive Spending Review in October, the coalition Government has set out its plans for creating the right business environment for strong and sustainable growth. We intend these measures to encourage inward investment as well as encouraging the expansion of home-grown businesses. UKTI works to ensure that feedback from existing and potential investors is drawn into the policy development process.

5.2 In particular, the budget announced the following key policies to encourage business growth and inward investment through:

· increasing the threshold for employer NICs by £21 a week above indexation - leading to a saving of around £140 million in Wales

· extending the Enterprise Finance Guarantee Scheme – this has already benefitted 516 businesses in Wales by over £40 million

· cutting Corporation Tax from 28% to 24% over the next 4 years and small Companies Corporation Tax from 22% to 20% over the same period with the aim of creating one of the most competitive corporate tax regimes in the G20

· reducing the costs of regulation with all businesses benefiting from a reduction in red tape including 201,000 SMEs in Wales, and

· repealing the special tax rules for furnished holiday lettings – benefitting an estimated 4,100 individuals in Wales who have income from furnished holiday lettings.

6. CONCLUSION AND FORWARD LOOK

6.1 Wales is the 6th most attractive destination for inward investment projects in the UK and attracts between 2 to 9% of all projects, averaging 4.7% over 10-years. However, according to fDi Markets [1] the average number of jobs created per project in Wales from 2003 to 2010 was 173. This compares to the UK average of 105. In 2009-2010 Wales was ranked 4th most successful geographical area for attracting new FDI related jobs.

   

6.2 Wales has also sustained its inward investment performance through the economic downturn better than the UK as a whole. Overall investment into the UK in 2009-2010 fell by 7% on the previous year while investment into Wales rose by 8%. The number of jobs associated with that investment showed that while UK job numbers were up 20% on the previous year, job numbers in Wales almost tripled.

6.3 Close joint working already exists between UKTI and the Welsh Assembly Government to ensure the best possible outcome for investment in Wales. The two organisations work closely through fora such as the International Business Development Forum (IBDF) to ensure that our policies are coordinated to the benefit of companies throughout the UK.

ANNEX A

INTERNATIONAL BUSINESS DEVELOPMENT FORUM (IBDF)

INWARD BUSINESS ACTIVITY

PRINCIPLES AND GUIDELINES

The following principles and guidelines have been adopted by the International Business Development Forum and govern the way in which UK Trade & Investment and the English RDAs work together to manage the flow of Foreign Direct Investment (FDI). The Devolved Administrations have also agreed to co-operate with these arrangements in line with their devolved powers. The overall aim of the principles and guidelines is to maximise the amount of knowledge-driven FDI for the UK, to improve transparency and partnership working, to strengthen the UK Brand, avoid perceptions of wasteful competition and the risk of customer confusion, and to promote the more efficient use of public money across the network.

We are keen to focus on client facing principles while avoiding too many detailed rules.

The following are key client relationship principles.

These principles are designed especially for use with Target Companies, which have been systematically segmented, and their related projects. These principles will succeed if the different stakeholders demonstrate trust and pragmatism.

Four key principles for effective Client Relationship Management:

1 That we make a priority of winning the business for the UK and acting in the national interest;

2 That we are Client-oriented, i.e. we put the Client first and adopt a true service ethic towards him/her;

3 That we focus on building long term relationships with Clients;

4 That we maintain transparency across the network with prompt sharing of information whilst respecting Client confidentiality where appropriate in line with the IBDF Guidelines.

Four related principles for the Virtual Teams that will engage with the companies on a case-by-case basis:

1 We adhere to IBDF Guidelines/Output Measures;

2 We include within the team all knowledge and expertise that can add value to the Target Client and/or Client’s project;

3 The team works to an agreed engagement strategy with defined roles, developed on a case-by-case basis, including appointing a team leader who will take responsibility for the management of the team, all driven by the Client’s needs. (Further advice on the effective operation of Virtual Teams scattered across a range of organisations and countries is available from the R&D Programme team);

4 The team takes a holistic view of the company from a global perspective.

Note. It is envisaged that the core team responsible for the pursuit of target companies will change its shape when a project emerges. Sub groups may be set up to deal with specific aspects, e.g. R&D. The key is that the team should respond flexibly according to the emerging opportunities.

But we also need some guidelines on operational aspects of how we work as a network.

Guidelines on operational procedures

 

Partnership

(a) There shall be regular meetings of the IBDF and its sub-groups. The sub-groups deal with:

· output measures and benchmarking

· case handling

· investor development

· marketing

· R&D Programme

· research

· other issues as they arise: eg Task and Finish Group on overseas office review

(b) Propagation by each organisation of IBDF Principles and Guidelines throughout their network;

(c) The Devolved Administrations to advise UKTI of significant changes in overseas representation, including opening new offices, in recognition of UKTI’s wider role in promoting the UK as a whole to foreign investors;

(d) English RDAs to discuss with UKTI proposals for opening new overseas offices for inward investment activity, and to provide UKTI with a business case for prior Ministerial approval;

(e) Consider option of co-locating (R)DA offices with UKTI inward investment overseas offices where practical and in accordance with FCO procedures. UKTI to ensure that (R)DAs not co-located or not represented in the market are treated fairly;

(f) Efficient operation of client propositions system, including provision of feedback – in accordance with Service Level Agreement (COP/CHG 14/2005);

(g) Regular exchange of information on marketing and communications plans and activities;

(h) Members to continue to develop regional selling points to enable UKTI to best market regions and the UK;

(i) RDAs to host briefing tours by inward investment officers, whenever practicable;

(j) RDAs and UKTI to consider options for interchange;

(k) UKTI will work through (R)DAs on FDI. UKTI will refer any approached from local authorities or other sub-regional bodies (including Multi Area Agreements) to the relevant (R)DA(s), unless there has been prior engagement between UKTI and the RDA to deal direct.

Joint planning overseas

UKTI, RDA and DA overseas teams (‘the network’) in markets where more than one of these organisations has an office or offices or other representation will ensure joint planning.

Representatives of the organisations concerned will meet before the following financial year to achieve a planning agreement. This may well take the form of an action list. They will look at and reach agreement on:

Overall Approach to Market

(a) Are network offices best located geographically in the market? Are they all in the same place? Is that a good thing? Or in larger markets should the network collectively achieve a geographical spread?

(b) To what extent do/should offices specialise in specific sectors? Should there be sector leads? If so, UKTI or an (R)DA?

(c) Prospects for co-location.

In year activity. Planning agreements must include:

(a) Targets and any other agreed performance measures.

(b) Consideration of pooling market research activity and database and data sources, e.g. location benchmarking tools.

(c) Systematic look at events planned for the year. To what extent should these be joint events between two or more members of the network? Are locations and event focuses (including sectors) getting the best spread/concentration for the UK?

(d) Systematic look at PR and marketing activity. Are offices maximising the impact of PR and marketing spend?

(e) Optimal aftercare arrangements.

(f) Reinforcing current arrangements – pursuit lists (see Transparency section below).

(g) Ensuring clarity on roles – eg responsibility for reporting, names of who provide and receive visit reports.

(h) Provisions for review in year and at year end. This entails review of how the planning arrangements worked; and activity and outputs.

(i) Use of the UK brand overseas (guidelines to issue).

Those (R)DAs without an office or other representation in those markets covered by this guidance must have an opportunity to comment on the agreed draft plans before sign-off, where they opt to do so.

Overseas teams, on a market-by-market basis, should systematically consider the branding of marketing activity – events, written materials, websites etc with the presumption of use of the ‘UK’ brand. Further branding guidance will be provided. This consideration should be part of the annual planning round, and in-year reviews.

Participation by Devolved Administrations and LDA is at their discretion.

Baselining, measuring, reporting and evaluating overseas inward investment activity

UKTI and RDA HQs, and DAs and LDA if they wish, will benchmark and measure inputs and outputs. There will be quarterly reporting on outputs and annual reporting on inputs.

Under the new arrangements UKTI will ensure common evaluation of UKTI, RDA and perhaps DA overseas inward investment activity. [Further detail being discussed in Overseas Review Implementation Task and Finish Group].

Baseline and measuring

Overseas offices will need to establish baselines for reporting against:-

(a) Outputs:

· Number of leads.

· Number of leads passed from one network member to another.

· Number of successes.

· Examples of co-location (ranging from regular hot desking to RDA staff under UKTI overseas team management).

· ‘Soft’ factors – illustrations of closer co-working.

(b) Inputs (Costs):

For UKTI, costs are established by using FCO figures for full costs of staff – ie including overheads – modulated by grade and by country of location and diplomatic mission within country. This will sometimes involve allowing for the fact that many staff have combined trade and investment functions.

RDAs identify the full costs of their overseas offices. As these are inward investment dedicated further refinement should not be required.

Devolved Administrations also identify the full costs of their overseas offices and pro rata them down in proportion in the approximate share of overseas offices activity represented by inward investment.

[nb RDAs and DAs have not yet agreed these arrangements].

Reporting

[The Overseas Review Implementation Task and Finish group is looking at UKTI proposals for expanding the existing quarterly RDA IBDF reporting form and the annual DA form].

Evaluation

UKTI operates the Performance and Impact Monitoring Surveys (PIMS). A third party (OMB) interviews a substantial sample of UKTI’s trade and inward investment clients. OMB then produce reports on the value achieved for companies, additionality, and customer perception of quality. PIMS won’t reliably attribute the extent of contribution from overseas offices – but can link inward investment successes with leads from overseas, assuming sufficient details of the source of leads are provided to the PIMS research team. And the process will of course currently only cover leads where UKTI has had a role. Most of these will come from UKTI overseas teams, though some could come from (R)DA offices. This will therefore be a component of evaluation, as will RDAs’ and DAs’ own assessments.

Transparency

a) Each member will exchange with UKTI inward investment overseas teams, on a strictly one to one confidential basis, their pursuit lists of prospective investors and lists of events. This will help to:

- Avoid confusing potential investors
- Maximise the potential for combining resource.

Exchange of lists will take place between UKTI inward investment overseas teams and (R)DA overseas representation or (R)DA HQ, where there is not an (R)DA representative in market. Similarly, where there is no UKTI inward investment team in an overseas market, lists should be exchanged with UKTI HQ in London. UKTI (both HQ and Overseas Teams) will not approach a client on a (R)DAs’ list without prior consultation. Similarly, (R)DAs will not approach a client on UKTI’s list, without prior consultation. An exception to transparency will have to be made if the client insists on anonymity.

b) Transparent distribution of active projects by UKTI through Docstore as defined below:

- All High Value projects where there has been a request for substantive information – multi-region or single region request;

- All Good Quality projects where there has been a request for substantive information – multi-region or single region request;

- All (R)DA Priority projects.

Cases to be defined as confidential and thus not placed on DocStore should be agreed between relevant stakeholders.

c) The R&D Programme team will ensure that all initial Account Plans for target companies are shared with BERR Business Relations and with (R)DAs to ensure that they have an opportunity to feed in information about relationships with target companies, especially where these may be at a sensitive stage.

Co-ordinated relationship management of existing inward investors

(a) Proactive participation in the (R)DA-chaired National Investor Development Forum; a sub-group of IBDF that meets quarterly; focus on best practice, benchmarking/measuring value-added and greater cross-border cooperation in support of strategic investors.

(b) Default sharing of overseas-owned company visit reports generated by R/DAs with UKTI HQ's Investment Policy Section through the existing investor.support@uktradeinvest.gov.uk email inbox. UKTI to disseminate to the relevant members of the Investor Development (ID) network unless otherwise requested by the originator for specific client-confidentiality reasons. UKTI to provide regular feedback also to (R)DAs on the issues raised in their own ID reporting on UK regional issues.

(c) All members will feedback to UKTI those policy-related issues raised by clients using the existing 'exchange of information' mechanism (see 'b' above). UKTI will use this received information to build its 'Business Issues' evidence base in support of its policy-influencing objective to improve the UK's business environment for inward investment.

(d) Sub-regional partners and stakeholders should likewise be encouraged to reciprocate in sharing their own ID reporting with (R)DAs and UKTI HQ where there are business environment issues relevant to the UK's wider competitiveness.

(e) All members establish/update (at least biannually) their respective lists of strategic companies to be relationship managed (with name & contact details of relationship manager) for national distribution round the ID network using BERR's Sector Unit RM Excel spreadsheet. (R)DAs are encouraged to embrace the idea of regional transparency on ID reports, i.e. copying to other strategic regional stakeholders where there is an identifiable mutual interest. However, it is recognised too that, similarly to 'b' above, this might not always be possible/desirable for reasons of stated company confidentiality, but not copying should be more the exception than the rule.

(f) All members to be receptive (subject to resources and priorities) to suggestions from other stakeholders for companies (esp. inward investors) to be included on their ID company lists.

N.B. These Principles and Guidelines are supplemented by GUIDELINES ON OVERSEAS JOINT INWARD INVESTMENT WORK BETWEEN RDAS, DEVOLVED ADMINISTRATIONS AND UKTI at Annex I

December 2010

ANNEX I

GUIDELINES ON OVERSEAS JOINT

INWARD INVESTMENT WORK BETWEEN

RDAS, DEVOLVED ADMINISTRATIONS AND UKTI

Introduction

These Guidelines set out new arrangements for closer working between UKTI, the RDAs and Devolved Administrations (DAs) in key overseas inward investment markets following the Joint Review in 2007 of Overseas Representation, which was published in March 2008. The Guidelines explain the background to and aim of closer working and describe the new procedures covering in-market activity planning, branding, reporting and evaluation, and co-location. They do not replace the IBDF Inward Business Activity Principles and Guidelines, of which they are a part.

Background

1. Following a major review including a study and survey by Arthur D Little, RDAs, DAs and UKTI agreed to closer and more co-ordinated working overseas. In all cases, participation by the DAs and LDA in any new UK arrangements will be at their discretion, in keeping with their devolved powers.

Key points in the agreement are:

i) UKTI will have overall responsibility for co-ordination of the pre-enquiry promotional effort in overseas markets.

a. Pre-enquiry promotional effort is defined in this instance as agreeing objectives and targets; promotional activity aimed at lead generation such as networking, lobbying, events, market research and intelligence gathering.

ii) UKTI will lead the co-ordination of an annual ‘UK plc’ plan for events, marketing and promotion for each agreed market and sector, which will set out the responsibilities, objectives and targets for UKTI and individual RDAs and working with DAs.

a. The process will be designed jointly by UKTI, the RDAs and DAs; governing principles will be promulgated to their overseas posts and offices/representatives;

b. The process will be a co-ordinated, bottom-up approach in each market;

c. It builds upon the principle that UK plc’s needs are served best by the UKTI/RDA/DA network overseas.

iii) UKTI will co-ordinate performance monitoring and evaluation against the plan.

a. The overall process will be managed centrally in the UK.

b. UKTI, the RDAs and DAs will agree data to be collected and performance measures.

c. The parties will evaluate the targets jointly, in a systematic way, at a market level, and report back to their respective headquarters.

d. The Peer Review [1] process will be discontinued.

iv) UKTI and the RDAs will adopt a more consistent approach to UK branding overseas. Discussion will take place in overseas markets between UKTI and the RDAs on how best to brand events and materials in overseas markets. The DA’s will also be involved in these discussions.

v) UKTI and the RDAs will explore the possibility of co-location and procurement of services in overseas markets where this would be cost effective. Discussions will also involve the DAs where appropriate.

a. At British Embassy/Consulate General or alternative location;

b. UKTI, the RDAs and DAs will work together to minimise issues of space, security and host government policy.

vi) To achieve full national co-ordination, UKTI, RDAs and DAs will continue to work as delivery partners; sub-regional partners, local authorities and city regions will work through the RDAs and DAs.

vii) Under revised IBDF Inward Business Activity Principles and Guidelines [2] , UKTI, the RDAs and DAs will deal directly with enquiries, sales and aftercare.

Aim

2. This agreement built substantially on and replaced previous arrangements for exchange of pursuit lists, peer review and a degree of common branding. These guidelines implement the agreement. The overall aim is to minimise the risk of duplication, improve efficiency and transparency and so increase the amount of knowledge-driven FDI won for the UK. The arrangements need to be as light touch as possible while achieving results. The pre-year planning meeting is key. In addition, in-market teams may or may not want in-year meetings. And, of course, we have agreed to dispense with Stage 1 (in-market) peer reviews and replace Stage 2 with a new lighter touch approach in the UK (IBDF Partners Bi-lateral Reviews).

Planning

3. UKTI, RDA and DA overseas teams (‘the network’) in markets where more than one of these organisations has an office or offices or other representation will ensure joint planning. The pre-year planning meeting is key.

4. Representatives of the organisations concerned will meet before the following financial year to achieve a planning agreement. Any RDAs and DAs not currently represented in market must be given with, sufficient notice, the opportunity to participate in, or provide input to, this planning meeting. The in-market plan may well take the form of an action list. The planning meeting should look at and reach agreement on:

Overall Approach to Market

· Are network offices best located geographically in the market? Are they all in the same place? Is that a good thing? Or in larger markets should the network collectively achieve a geographical spread?

· To what extent do/should offices specialise in specific sectors? Should there be sector leads? If so, UKTI or an RDA or DA?

· Prospects for co-location.

In year activity

· Planning agreements must include:

- arrangements for obtaining views of RDAs and DAs without in market representation, where RDAs or DAs say they want involvement.

- Targets and any other locally agreed performance measures.

- Consideration of pooling market research activity and database and data sources, e.g. location benchmarking tools.

- a systematic look at events planned for the year. To what extent should these be joint events between two or more members of the network? Are locations and subject matter for events (including sectors) getting the best spread/concentration for the UK?

- a systematic look at PR and marketing activity. Are organisations maximising the impact of PR and marketing spend?

- looking at optimal aftercare arrangements.

- Reinforcing current arrangements – RDAs, DAs and UKTI teams must share their pursuit lists and active case lists systematically. See para 6 for guidance on the sharing framework.

- ensuring clarity on roles – eg responsibility for reporting, names of who provide and receive visit reports.

- provisions for review in-year and at year end. This entails review of how the planning arrangements worked; and activity and outputs.

5. Those RDAs and DAs not represented in those markets covered by this guidance must have an opportunity to comment on the agreed draft plans before sign-off, where they opt to do so.

6. These arrangements replace the first stage of the former peer review process. These arrangements include the established provisions on exchange of pursuit lists – the following is from the IBDF Inward Business Activity Principles and Guidelines:

Each member will exchange with UKTI inward investment overseas teams, on a strictly one to one confidential basis, their pursuit lists of prospective investors and lists of events. This will help to:

- Avoid confusing potential investors
- maximise the potential for combining resource.

Exchange of lists will take place between UKTI inward investment overseas teams and (R)DA overseas representation or (R)DA HQ, where there is not an (R)DA representative in market. Similarly, where there is no UKTI inward investment team in an overseas market, lists should be exchanged with UKTI HQ in London. UKTI (both HQ and Overseas Teams) will not approach a client on a (R)DAs’ list without prior consultation. Similarly, (R)DAs will not approach a client on UKTI’s list, without prior consultation. An exception to transparency will have to be made if the client insists on anonymity.

* UKTI overseas teams will load their active case lists onto DocStore at the end of each quarter no later than end of 3rd week after the quarter

* (UKTI HQ teams will also load their own version of the active case lists by sector onto DocStore at the end of each quarter and no later than the 3rd week after the quarter)

* UKTI and RDA overseas teams will exchange their pursuit lists on a strictly one to one confidential basis each quarter. Where no local RDA representation exists, the RDA will share their pursuit list on the same basis with the UKTI HQ Investment Sales Teams.

* UKTI HQ teams will share their annual pursuit lists with the network as part of the business planning cycle and provide up to date details of their lists on request to RDA partners no less than twice per year in line with business planning reviews.

* UKTI overseas teams will enter all leads (including early stage leads and developed project enquiries/active cases) in all value bands onto DocStore making exceptions only where the national interest or the client's own confidentiality is concerned.

* UKTI will provide the RDAs with a numeric summary breakdown of the leads generated for their own organisations on a one to one confidential basis twice a year.

Branding

7. Overseas teams, on a market-by-market basis, should systematically consider the branding of marketing activity – events, written materials, websites, etc, with the presumption of use of the ‘UK’ Flag identity brand. Please register at www.promotingukbusiness.org.uk to access guidelines on how UKTI, RDAs and DAs can use the UK Flag identity as well as on how to use the "compelling message". You will need to click on the register button and fill in a very simple form.

8. This consideration should be part of the annual planning round, and in-year reviews.

9. Use of the UK Flag identity by DAs and LDA is at their discretion.

Baselining, measuring, reporting and evaluating overseas inward investment activity

Summary

10. UKTI and RDA HQs (and DAs at their discretion) will benchmark and measure:

a. Inputs.

b. Outputs.

11. There will be quarterly reporting on outputs. A revised IBDF Output Measures RDA Quarterly Return has been agreed to capture this information. RDAs and DAs will report annually on input costs.

12. Under the new arrangements UKTI will ensure common evaluation of UKTI, RDA and perhaps DA overseas inward investment activity.

Baseline and measuring

13. Overseas offices will need to establish baselines for reporting against:-

(a) Outputs:

· Number of leads as per IBDF Inward Business Activity Principles and Guidelines definition.

· Number of leads passed from one network member to another.

· Number of successes.

· Examples of co-location (ranging from regular hot desking to RDA staff under UKTI overseas team management).

· ‘Soft’ factors – illustrations of closer co-working. For quality of service the results of ADL surveys in Canada, France and India and some other markets will be relevant.

(b) Inputs (Costs):

For future evaluation UKTI, RDAs and Devolved Administrations need to be in a position to say what their costs are at that particular point in time, but regular reports on costs are not required as part of the annual in-market planning process.

Evaluation

14. UKTI will have regard to input and output data. Third party (consultancy) evaluation is a prospect. With regard to its own activity. UKTI operates the Performance and Impact Monitoring Surveys (PIMS). These rely on data input by UKTI staff into UKTI’s e-CRM system. A third party (OMB) uses this data to interview a substantial sample of UKTI’s trade and inward investment clients. OMB then produce reports on the value achieved for companies, additionality, and customer perception of quality. PIMS will not reliably attribute the extent of contribution from overseas offices – but can link inward investment successes with leads from overseas, assuming sufficient details of the source of leads are provided to the PIMS research team. And the process will, of course, currently only cover leads where UKTI has had a role. Most of these will come from UKTI overseas teams, though some could come from RDA and DA offices. This will therefore be a component of evaluations, as will RDAs’ and DAs’ own assessments. RDAs and DAs agreed in a task and finish group to adopt PIMS subject to agreement on costs.

Co-location

15. Co-location of partners is encouraged. UKTI will monitor and report on the extent to which this occurs and the forms of co-location deployed, with a view to facilitating further co-location. FCO has issued guidance on co-location within UK diplomatic missions. UKTI has agreed with FCO how RDA costs should be treated.

HQ role

16. UKTI, RDA and DA HQs will provide advice to overseas offices and representatives in line with these guidelines. UKTI and EMDA (as the lead RDA for International Trade and Investment) will collate quarterly reports for the RDAs and present their observations on them to IBDF members. IBDF will discuss these observations and progress on the new overseas arrangements and take any necessary actions – in preparation for a likely review of the arrangements required by the Treasury in due course.

17. Advice on joint overseas working can be sought in UKTI from Andrew Levi (+44 (0)20 7215 8719) and Laura Faulkner (+44 (0)20 7215 4923).

ANNEX II

Glossary (see main IBDF Inward Business Activity Principles and Guidelines for full details)

* Lead - an early stage enquiry from a potential or existing investor which may subsequently move rapidly to an active case or conversely remain dormant for a period of time depending on the due diligence undertaken/contact with the client

* Pursuit - a potential or existing investor that is being proactively targeted by either UKTI or an RDA with a view to yielding active FDI projects or project wins

* Active Case - an on going discussion regarding a potential FDI project where the project decision date is likely to be within 18 months from the date of initial contact

* DocStore - UKTI's IT communications platform for sharing its project leads and active FDI project case work with the RDA and DA stakeholder network.

ANNEX B

UKTI- Recorded FDI to Wales for the Past 20 Years

Year	No. of Projects	No. of New Jobs	No. of Safeguarded Jobs	Total No. of Jobs
1990/91	62	3,356	5,065	8,421
1991/92	72	5,195	5,634	10,829
1992/93	65	2,382	4,489	6,871
1993/94	64	3,913	2,651	6,564
1994/95	51	3,151	2,084	5,235
1995/96	53	4,429	4,602	9,031
1996/97	45	10,397	2,256	12,653
1997/98	55	4,976	2,479	7,455
1998/99	48	5,591	1,796	7,387
1999/00	47	4,161	3,636	7,797
2000/01	39	4,520	1,833	6,353
2001/02	61	3,872	3,445	7,317
2002/03	60	4,083	3,696	7,779
2003/04	67	4,064	4,067	8,131
2004/05	56	2,593	1,261	3,854
2005/06	51	3,132	2,072	5,204
2006/07	67	3,379	2,788	6,167
2007/08	68	3,743	1,886	5,629
2008/09	60	2,185	529	2,714
2009/10	65	3,431	3,931	7,362

UKTI FDI project and job statistics are based on:

· information provided by the company at the time of the announcement of the decision to invest in the UK; and

· the investing companies’ best estimates of capital expenditure and jobs created/safeguarded in the first three years.

The figures do not take account of subsequent developments.

UKTI-Recorded FDI to Wales 2005/06 to 2009/10

Tracked over the past five years, Wales’ share of the total number of UK investment projects has ranged between 3.4% and 4.6%. In 2009/10, 65 of the total number of 1619 investment projects in the UK went to Wales – 4 % of the total. These figures are broadly in line with Wales’ share of regional GVA [1] , which according to ONS was 4% in 2008.

Welsh FDI 2009-10

Sector Breakdown

Aerospace	3
Agriculture, Horticulture And Fisheries	1
Automotive	8
Biotechnology And Pharmaceuticals	2
Business (And Consumer) Services	11
Chemicals	1
Communications	1
Construction	1
Creative And Media	1
Defence	1
Electronics And IT Hardware	5
Environment	3
Food And Drink	3
Healthcare And Medical	4
Mechanical Electrical And Process Engineering	4
Metals, Minerals & Materials	1
Ports And Logistics	2
Power	3
Software And Computer Services Business To Business (B2B)	9
Textiles, Interior Textiles And Carpets	1
Grand Total	65

Country Breakdown

Australia	3
British Virgin Islands	1
Canada	3
China	1
Denmark	2
Finland	2
France	7
Germany	3
Hong Kong (SAR)	1
India	2
Ireland	3
Italy	1
Japan	8
Luxembourg	1
Romania	1
South Africa	2
Taiwan	1
United Arab Emirates	1
United States	22
Grand Total	65

Welsh FDI 2007-08

Sector Breakdown

Aerospace (Civil)	6
Automotive	4
Biotechnology And Pharmaceuticals	8
Business (And Consumer) Services	4
Chemicals	3
Communications	1
Construction	4
Education And Training	3
Electronics And IT Hardware	2
Environment	11
Financial Services	1
Food And Drink	3
Healthcare And Medical	3
Household Goods, Furniture And Furnishings	2
Metals And Minerals	2
Oil And Gas	2
Ports And Logistics	2
Railways	1
Software And Computer Services Business To Business (B2B)	6
Grand Total	68

Country Breakdown

Australia	6
Austria	1
Belgium	2
Canada	3
China	2
France	8
Germany	5
India	1
Ireland	8
Israel	1
Italy	1
Japan	7
Mexico	1
Netherlands	4
New Zealand	1
Qatar	1
South Africa	1
Spain	1
Sweden	1
Switzerland	1
Taiwan	1
United Arab Emirates	1
United States	10
Grand Total	68

Welsh FDI 2006-07

Sector Breakdown

Aerospace (Civil)	2
Automotive	8
Biotechnology And Pharmaceuticals	2
Business (And Consumer) Services	6
Chemicals	2
Clothing, Footwear And Fashion	2
Construction	4
Creative And Media	4
Electronics And IT Hardware	6
Environment	6
Financial Services	2
Food And Drink	1
Giftware, Jewellery And Tableware	1
Healthcare And Medical	1
Household Goods, Furniture And Furnishings	2
Marine	1
Mechanical Electrical And Process Engineering	1
Metallurgical Process Plant	1
Metals And Minerals	1
Power	1
Software And Computer Services Business To Business (B2B)	12
Textiles, Interior Textiles And Carpets	1
Grand Total	67

Country Breakdown

Australia	4
Belgium	1
Canada	2
China	2
Denmark	3
Estonia	1
France	6
Germany	4
Hong Kong (SAR)	1
India	3
Ireland	2
Italy	1
Japan	7
Korea (South)	1
New Zealand	1
South Africa	1
Spain	3
Switzerland	1
United States	23
Grand Total	67

Welsh FDI 2005-06

Sector Breakdown

Aerospace (Civil)	3
Automotive	7
Biotechnology And Pharmaceuticals	3
Business (And Consumer) Services	4
Chemicals	1
Construction	1
Electronics And IT Hardware	5
Environment	3
Financial Services	2
Food And Drink	3
Giftware, Jewellery And Tableware	1
Healthcare And Medical	7
Household Goods, Furniture And Furnishings	1
ICT	1
Leisure Industry	1
Metals And Minerals	2
Oil & Gas	3
Software And Computer Services Business To Business (B2B)	1
Textiles, Interior Textiles And Carpets	3
Grand Total	52

Country Breakdown

Australia	4
Austria	1
Canada	2
China	4
Finland	1
France	4
Germany	2
India	2
Ireland	4
Italy	2
Jordan	1
Japan	5
Malaysia	1
Norway	1
New Zealand	1
South Africa	2
Sweden	1
United States	14
Grand Total	52

Welsh FDI 2004-05

Sector Breakdown

Aerospace/Avionics	1
Automation Systems	1
Automotive	4
Automotive Components	3
Ceramic Goods	1
Chemicals	1
Construction	2
Electronics - Consumer	1
Electronics - Specialised	2
Engineering	4
Environmental Sers/Prods/Procs	4
Finance	3
Food And Drink	1
Furniture Manufacture	1
Healthcare	3
Horticultural	1
Info/Communications Technology	1
It/Internet Services	2
Leisure Ind/Toys/Sports	4
Managem't & Business	2
Manf. Of Industrial Machinery	1
Metal Products	1
Paper/Packaging Manufacture	2
Pharmaceuticals	1
Plastics	1
Power Generation	2
Retail Services	2
Shared Service Centres	1
Software	1
Telecommunications	1
Textiles, Clothing & Footwear	2
Transport/Storage/Postal	1
Grand Total	58

Country Breakdown

Australia	3
Austria	1
Canada	3
Switzerland	1
China	3
France	2
Germany	3
Hong Kong	1
India	1
Ireland	3
Italy	1
Japan	7
Malaysia	1
Netherlands	2
Norway	2
Singapore	1
Spain	3
Sweden	2
Taiwan	1
USA	17
Grnd Total	58

Welsh FDI 2003-04

Sector Breakdown

Aerospace/Avionics	2
Automation Systems	2
Automotive	1
Automotive Components	3
Biotechnology	2
Call Centre	2
Chemicals	1
Construction	1
Cosmetic & Beauty Ind. Manf	1
Electronics - Consumer	2
Electronics - Specialised	7
Engineering	2
Environmental Sers/Prods/Procs	2
Finance	3
Food And Drink	3
Furniture Manufacture	1
Health & Safety	1
Healthcare	1
Info/Communications Technology	2
Language Services	1
Leisure Ind/Toys/Sports	1
Managem't & Business	1
Manf. Of Industrial Machinery	2
Metal Products	7
Paper/Packaging Manufacture	4
Pharmaceuticals	2
Plastics	3
Power Generation	2
Retail Services	1
Shipbuilding	1
Software	1
Training	1
Wood & Wood Products	1
Grand Total	67

Country Breakdown

Australia	4
Austria	2
Belgium	1
Canada	2
Switzerland	2
China	1
Denmark	2
France	3
Germany	4
Hong Kong	1
India	1
Ireland	3
Israel	1
Italy	5
Japan	4
Netherlands	1
Norway	1
New Zealand	1
Singapore	1
Spain	1
Sweden	3
USA	23
Grand Total	67

Welsh FDI 2002-03

Sector Breakdown

Aerospace/Avionics	1
Agriculture/Fisheries	1
Automotive Components	5
Biotechnology	1
Call Centre	4
Chemicals	1
Electronics - Consumer	2
Electronics - Specialised	3
Engineering	1
Finance	1
Food And Drink	5
Furniture Manufacture	3
Health & Safety	1
Healthcare	1
Info/Communications Technology	1
It H/Ware/Off Machinery & Mauf	1
Managem't & Business	1
Manf. Medical & Surgical Equp	1
Manf. Of Industrial Machinery	4
Metal Products	3
Paper/Packaging Manufacture	6
Pharmaceuticals	2
Plastics	3
Shared Service Centres	1
Software	4
Telecommunications	1
Transport/Storage/Postal	2
Grand Total	60

Country Breakdown

Australia	3
Belgium	2
Canada	2
Switzerland	1
China	1
Denmark	1
Finland	1
France	4
Germany	3
Greece	1
Hong Kong	1
India	1
Ireland	4
Israel	1
Italy	4
Japan	2
Kuwait	1
Netherlands	1
Norway	1
Singapore	1
Sweden	1
Thailand	1
Taiwan	1
USA	21
Grand Total	60

Welsh FDI 2001-02

Sector Breakdown

Aerospace/Avionics	3
Automotive Components	10
Call Centre	3
Chemicals	1
Cosmetic & Beauty Ind. Manf	1
Electronics - Consumer	1
Electronics - Specialised	8
Engineering	6
Finance	1
Food And Drink	4
Healthcare	1
Info/Communications Technology	1
It/Internet Services	1
Language Services	1
Leisure Ind/Toys/Sports	1
Manf. Medical & Surgical Equp	2
Manf. Of Industrial Machinery	2
Metal Products	2
Paper/Packaging Manufacture	4
Pharmaceuticals	2
Plastics	1
Telecommunications	3
Textiles, Clothing & Footwear	1
Grand Total	60

Country Breakdown

Australia	1
Austria	1
Bermuda	1
Canada	3
Switzerland	1
France	6
Germany	5
Hong Kong	1
Ireland	7
Japan	8
Korea	1
Netherlands	2
Norway	1
Sweden	1
USA	19
South Africa	2
Grand Total	60

Welsh FDI 1999-00

Sector Breakdown

Automation Systems	1
Automotive	2
Automotive Components	7
Call Centre	2
Chemicals	2
Construction	1
Electronics - Consumer	1
Electronics - Specialised	2
Engineering	2
Food And Drink	4
Healthcare	4
Leisure Ind/Toys/Sports	1
Machine Tools	1
Metal Products	5
Paper/Packaging Manufacture	4
Pharmaceuticals	1
Power Generation	1
Shared Service Centres	1
Telecommunications	3
Textiles, Clothing & Footwear	1
Training	1
Grand Total	47

Country Breakdown

Australia	1
Austria	1
Canada	2
Switzerland	1
France	2
Germany	7
Greece	1
Hong Kong	1
Ireland	3
Italy	2
Japan	7
Spain	1
Taiwan	1
USA	17
Grand Total	47

Welsh FDI 1998-99

Sector Breakdown

Agriculture/Fisheries	1
Automotive	1
Automotive Components	7
Chemicals	4
Electronics - Consumer	1
Electronics - Specialised	5
Engineering	3
Finance	3
Food And Drink	2
Furniture Manufacture	3
Horticultural	1
It/Internet Services	1
Leisure Ind/Toys/Sports	1
Metal Products	1
Minerals	3
Paper/Packaging Manufacture	3
Pharmaceuticals	1
Shared Service Centres	1
Software	1
Textiles, Clothing & Footwear	1
Training	1
Wood & Wood Products	3
Grand Total	48

Country Breakdown

Australia	1
Canada	1
Denmark	1
France	3
Germany	6
Hong Kong	1
Ireland	2
Italy	2
Japan	5
Korea	1
Liechtenstein	1
Netherlands	2
Norway	2
Turkey	1
Taiwan	1
USA	18
Grand Total	48

Welsh FDI 1997-98

Sector Breakdown

Not Known	54
Telecommunications	1
Grand Total	55

Country Breakdown

Australia	2
Canada	1
Denmark	2
France	3
Germany	7
Ireland	1
Italy	3
Japan	12
Liechtenstein	1
Netherlands	1
Norway	1
Taiwan	1
USA	20
Grand Total	55

Welsh FDI 1996-97

Sector Breakdown

Automotive	1
Not Known	44
Grand Total	45

Country Breakdown

Australia	1
Belgium	2
Canada	1
Switzerland	3
Finland	1
France	2
Germany	2
Ireland	1
Italy	4
Japan	8
Korea	2
Netherlands	2
Singapore	1
Sweden	1
USA	14
Grand Total	45

Welsh FDI 1995-96

Sector Breakdown

Automotive Components	1
Not Known	52
Grand Total	53

Country Breakdown

Australia	1
Belgium	3
Canada	1
Denmark	1
France	3
Germany	3
Hong Kong	1
Ireland	1
Italy	4
Japan	6
Korea	2
Norway	1
Singapore	1
Sweden	1
Thailand	1
USA	23
Grand Total	53

Welsh FDI 1994-95

Sectors Unknown

Country Breakdown

Belgium	1
Canada	3
Switzerland	3
Denmark	1
Finland	1
France	1
Germany	5
Ireland	3
Japan	7
Netherlands	1
Norway	2
Sweden	1
Taiwan	1
USA	21
Grand Total	51

Welsh FDI 1993-94

Sectors Unknown

Country Breakdown

Austria	1
Belgium	1
Canada	4
Switzerland	2
France	4
Germany	5
Hong Kong	2
Ireland	5
Italy	2
Japan	10
Liechtenstein	1
Netherland Antilles	1
Netherlands	4
Norway	1
Spain	2
USA	19
Grand Total	64

Welsh FDI 1992-93

Sectors Unknown

Country Breakdown

Australia	2
Belgium	2
Canada	1
Switzerland	4
Denmark	3
France	4
Germany	10
Hong Kong	1
Ireland	2
Italy	3
Japan	2
Liberia	1
Netherlands	4
Spain	1
Sweden	1
USA	24
Grand Total	65

Welsh FDI 1991-92

Sectors Unknown

Country Breakdown

Unknown	1
Australia	2
Belgium	2
Canada	3
Switzerland	1
Cayman Isles	1
Denmark	1
France	5
Germany	12
Ireland	2
Italy	2
Japan	8
Liechtenstein	2
Netherlands	3
Norway	2
Portugal	1
Singapore	1
Sweden	2
USA	20
South Africa	1
Grand Total	72

ANNEX C

Examples of Assisted Successes

Fillcare, part of Fareva Holdings of France: manufactures and packages hair care and styling products for leading brands creating jobs at its plant, Talbot Green, Rhondda Cynon Taf.

Assistance provided by: UKTI and IBW

Project start date: 11.08.09/confirmed 03.03.10

Capital Ex: unknown

Jobs: ~200 over four years

Grant assistance: £1.9M (in public domain)

UPM, Finland: materials recovery facility at its UPM Shotton paper mill, Deeside, North Wales

Assistance provided by: UKTI and IBW

Project start date: 31.01.09/confirmed 11.03.10

Capital Ex: £17M

Jobs: 160

Grant assistance: £1.7M (in public domain)

Payswyft, USA: established its HQ in Cwmbran. To launch the first totally integrated web based service in the UK from this facility.

Assistance provided by: IBW

Project start date unknown/confirmed 17.05.10

Capital Ex: unknown

Jobs: 26 new

Grant assistance: to the best of our knowledge no grant was given

Sharp, Japan: electronics company doubling production of solar cell modules at its plant near Wrexham, which currently employs 750 staff.

Assistance provided by: IBW

Project start date: unknown/confirmed 25.02.10

Capital Ex: unknown

Jobs: 103 safeguarded

Grant assistance: to the best of our knowledge no grant was given

ANNEX D

Methodology

European Investment Monitor

The Ernst & Young European Investment Monitor, researched and powered by Oxford Intelligence, is a highly detailed source of information on cross-border investment projects and trends in Europe, dating back to 1997.

The database focuses on investment announcements, the number of new jobs created and, where identifiable, the associated capital investment, thus providing data on FDI in Europe. It allows users to monitor trends, movements in jobs and industries, and identify emerging sectors and cluster development. Projects are identified through the daily monitoring and research of more than 10,000 news sources.

The research team aims to contact directly 70% of the companies undertaking the investment for direct validation purposes. This process of direct verification with the investing company ensures that real investment data is accurately reflected. The employment figures collected by the research team reflect the number of new jobs created at the start-up date of operations, as communicated by the companies during our follow-up interview. In some cases, the only figures that a company can confirm are the total employment numbers over the life of the project. This is carefully noted so that any subsequent job creation from later phases of the project can be cross checked and to avoid double-counting in later years.

The following categories of investment projects are excluded from the EIM:

· M&A or joint ventures (unless these result in new facilities, new jobs created)

· License agreements

· Retail and leisure facilities, hotels and real estate investments

· Utility facilities including telecommunications networks, airports, ports or other fixed infrastructure investments

· Extraction activities (ores, minerals or fuels)

· Portfolio investments (i.e., pensions, insurance and financial funds)

· Factory/production replacement investments (e.g., a new machine replacing an old one, but not creating any new employment)

· Not-for-profit (e.g., charitable foundations, trade associations, governmental bodies)

UK Trade & Investment

UKTI is required by Parliament to collate an accurate and comprehensive record of project investment into the UK. It records announced and unannounced project investments, including those from emerging markets and Asia where companies tend to make investments without press notices.  Figures remain indicative in nature. Welsh Assembly Government is focused on the attraction on ‘High Value Jobs’ including R&D jobs. Welsh Assembly Government provides information to UKTI based on involved Welsh successes, but does not track all investment e.g. retail expansion