Edinburgh has maintained its status as the UK’s second most appealing city for foreign direct investment (FDI), while Glasgow has climbed two spots to seventh, based on the most recent UK Investment Attractiveness Index.
The FDI analysis, created by the Centre for Economics and Business Research (Cebr) in collaboration with Scottish law firms Wright, Johnston & Mackenzie and Irwin Mitchell, evaluates 48 British cities to identify where investment prospects are on the rise, rating them on economic advancement, workforce capabilities, and infrastructure.
In this latest report, Edinburgh ranked just behind London, earning a score of 52.0, with the research highlighting the city’s consistent excellence across all three areas, particularly in local infrastructure, which improved by 1.6 points since last year to reach a score of 64.1.
Digital connectivity played a significant role in Edinburgh’s impressive ranking, with the Index referencing the Scottish capital’s three-year Digital and Smart City initiative, aimed at enhancing digital access throughout Edinburgh and boosting digital proficiency among its inhabitants.
Conversely, Glasgow has moved up two positions to seventh place in the latest Index, achieving a score of 44.9 – an increase of 3.4 points from the last report.
The city now boasts the seventh-highest growth potential score in the UK, primarily due to a remarkable 19.1% increase in GVA over the past five years, with the report noting steady advancements in both infrastructure and workforce skills, further solidifying the city’s image as a “dynamic and flexible” hub for foreign investment.
“Edinburgh’s robust infrastructure and highly-skilled workforce, alongside Glasgow’s dynamic growth and improving infrastructure, make Scotland a standout destination for investment,” said Fraser Gillies, managing partner at Wright, Johnston & Mackenzie.
“With a continued focus on delivery, policy stability, and effective local governance, I am confident that both cities will remain at the forefront of global investment destinations for years to come.”
However, the rest of Scotland struggled to keep pace, with Aberdeen the only other Scottish city making the top 48, coming in at eighteenth with a score of 36.0. This placed it behind quicker-growing and more appealing regional areas like Birmingham and Liverpool.
Overall, the report underscores a concerning decline in FDI over recent years, with new projects from investors entering the UK market for the first time decreasing from 711 in 2022/23 to 553 in 2024/25 – a reduction of over 22%.
Projects from existing investors have also been affected, decreasing from 944 in 2023/24 to 822 in 2024/25 – a 13% decline that indicates diminishing confidence amid sluggish UK economic growth and high borrowing costs, challenges that are being felt worldwide.
To address this situation, the report outlines a series of policy suggestions, including distributing London’s advantages more broadly across the UK via infrastructure and devolved investment strategies, ensuring Industrial Strategy Zones yield tangible results, and prioritising stability and trade relations to enhance the UK’s competitive edge.
