London has been named the most attractive location for foreign companies seeking to set up base in Europe.
The findings of the 8th annual Ernst & Young European Attractiveness Survey show that in 2009 the UK attracted 119 software projects from foreign direct investment (FDI), the largest number secured by any country in Europe and 17 more than it secured in 2008.
London secured 49 software investments in 2009, easily outdoing Paris, which was second with 20, and third-placed Munich with 11. Cambridge, frequently referred to as Silicon Fen because of its cluster of high-tech firms led by ARM, was 10th.
Good infrastructure, a workforce with the right skills, a strong domestic market for technology and a sound reputation are the key reasons for the UK's success, says the report.
Karl Havers, EMEIA technology leader at Ernst & Young said "the UK is extremely well positioned to secure more of this investment. We have the right skills,infrastructure and reputation to retain our position top of the table."
Havers added "In addition, the UK maintains a strong domestic market for software products
and services worth more than £8bn a year, with healthy growth rates
forecast until 2013."
The majority of technology FDI comes to Europe from the US. The US invested 55 new missions into the UK software sector in 2009; five times more than Germany (10 missions) followed by France (9), Sweden and the Netherlands (both on 8).
The report warned that the UK's superiority won't last forever, as emerging economies will become more attractive as they develop which is expected.
"The global economy is evolving fast, with China, India, Brazil and the Middle East joining the traditional players of North America, Europe and Japan as both the destinations and sources of global investment," said Havers.
"With capital now clearly flowing in multiple directions, we need to continue to excel in our core competencies, as well as encourage further development of policy which is pro business and pro entrepreneurship," he added.
The report added clean-tech and creative industries are likely to emerge as the UK's strongest suits in the future.
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