Foreign Direct Investment
2.80 An alternative measure of investment is Foreign Direct Investment (FDI). Investments from Multi-national Enterprises are important to a region’s economy as firms that work internationally are generally more productive than indigenous firms. Multi-nationals also indirectly benefit the economy through productivity and managerial spillovers, both geographically and sectorally 8 . The South West's performance in attracting FDI has progressed. In 2005/06, the region secured 61 separate project successes, accounting for 5.6% of all Multi-national Enterprise investments in England. Its performance is considerably improved when considering the number of jobs created as a result of these investments. In 2003-05, the region accounted for 10% of all FDI jobs created within England although in 2005/06 this dropped to just over 7%.
2.81 Nationally and regionally, FDI has started to increase from its historically low levels in 2001/02. The number of investment projects in the region and in the country has nearly doubled. Jobs levels nationally have, however, remained stagnant, leading to the conclusion that nationally multi-national investments are less about large scale manufacturing employment investments and more about smaller service based investments. Due to the small sample size, however, single large investments can considerably influence the figures. Research into the determinants of FDI into the South West concluded that investment in physical infrastructure and the structure of the economy both contributed to a Multi-National Enterprise's decision to locate to the region 9 .