FDI Measures and Metrics: UKTI Experience

Transcription

1 FDI Measures and Metrics: UKTI Experience WAIPA-ILO Investment facilitation and sustainable development Tord Johnsen Head of Global Intelligence and Evaluation, UKTI 5 May Presentation title - edit in the Master slide

2 Contents International definitions and standards of FDI Global FDI Trends How UKTI defines FDI Projects and Value? WAIPA s role in promoting national and international measures on FDI 2

3 What is FDI? Foreign Direct Investment (FDI) is a type of cross-border investment made by a resident entity in one economy (the direct investor) with the objective of establishing a lasting interest in an enterprise (the direct investment enterprise) that is resident in an economy other than that of the direct investor (UNCTAD, OECD, IMF, EUROSTAT, ONS). Three main types /entry modes of FDI: New / Greenfield FDI Expansion FDI Mergers & Acquisitions / Joint Ventures 3

4 Key Measures of FDI Financial Value Number of Investment Projects/Deals FDI Stock FDI Measures FDI Projects FDI Flow Investment Promotion Agencies 4 4

5 Global FDI Trends - FDI inflows Developments in the global FDI market: Preliminary UNCTAD results show global FDI inflows increased by 36% in 2015 to an estimated $1.7 trillion the highest level since the 2008 economic and financial crisis. Developing and transition countries increased their global share of FDI inflows to a record level of 55%. FDI outflow from developed countries continues to stagnate. Outflow from developing countries increased by 18% to a record level of $468bn during

6 UK s performance in the global FDI market UK is number 1 in Europe and 4th in the world (behind USA, China/HK, and Netherlands) for FDI Flow UK FDI inflows increased by 29% to reach $68bn in Top Recipients of FDI Flow (2015), USD bn, UNCTAD UK inward FDI Stock reached a record 1tr level (2014). UK Inward FDI Stock (GBP bn) Source: UNCTAD. Note: FDI estimations in this Trends Monitor are based primarily on quarterly FDI data derived from the (extended) directional principle, though there are some countries for which the asset/liability data are used for estimation. 6

7 FDI projects Selected European markets UK is a lead destination in Europe for FDI (FDI Projects from FT) 7 Source: FT fdi Markets, Sep 2015)

8 2014/15 Annual Inward Investment Report Project numbers up by 12% - from 1,773 in 2013/14 to 1,988 in 2014/15. New jobs up by 27% - The number of new jobs created has increased from 66,390 in 13/14 to 84,603 in 13/14. Total Jobs down by 3% Total jobs decreased from 111,361 in 2013/14 to 107,658 in 2013/14 but entirely due to a decrease in safeguarded jobs 8

9 UKTI Definition of FDI Projects Four main conditions before a project can be recognised as FDI for UKTI internal purposes (based on international definitions): 1. Must be additional cash/investment involved in the project. 2. Foreign entity (parent) must have at least 10% stake in UK-based entity. Global HQ must be based outside UK. 3. There is a lasting business interest in the UK (at least 3-years). 4. There is at least 1 new job created as a result of the investment. 9

10 How UKTI measures its performance? Performance is measured by the number of inward investment Projects, focusing on those which create or safeguard jobs. Inward investment projects are categorised as FDI and non-fdi (R&D Collaborations). We check, verify and report the total number of investment projects landing in the UK during a year in our Annual Investment Report. There are also other, sector/programme specific investment measures: Commitment to invest (for large investments in infrastructure and regeneration sectors). FDI Projects Non FDI Projects (R&D Col) Investment Successes (Projects) Screen Production Investment (Investments to produce films, TV programmes etc. in the UK). 10

11 Categorisation of FDI by Value/Quality UKTI tries to identify and promote relatively higher value, better quality FDI. All investment projects are assessed against 7 indicators to determine their likely value/quality. Value of Investment Number of Jobs Quality of Jobs Export Potential FDI Project Value R&D Focus Investor Quality Global/ Eur. HQ 11

12 UKTI s public sector ecosystem Cabinet Office BIS Office for National Statistics Bank of England UKTI HM Treasury Other HM Government Departments FCO Local Government 12

13 WAIPA s role in promoting robust FDI statistics Providing methodological guidance and support to WAIPA members in establishing clear definitions of FDI projects and standards for recording and reporting national FDI statistics (projects). Promoting openness and transparency among IPAs in sharing their experiences with each other. Publication of manuals and guidelines in this area, and provision of trainings for IPAs and other partners. Close collaboration with external organisations which determine standards and methodologies and report on FDI Stock and Flow (e.g. IMF, OECD, UNCTAD, FT fdi Markets). Establish a global database/report to report on national IPA statistics on FDI projects reported nationally. 13

14 14 Q&As and Discussion