A report by Skills Taskforce for Global Britain has reportedly stated that the UK is at risk of being left behind in the intensifying battle for foreign investment unless it improves the level of skills offered to overseas firms.
The taskforce, chaired by John Cridland, former Director General of CBI, has warned that the UK’s appeal of cheap labor is not enough anymore as other nations are using well-trained workers in order to attract companies.
The report stated that countries successfully bringing in more FDI showed off workforces having a sophisticated range of skills, which attracted investors more effectively.
The taskforce has called on the Department for International Trade for adopting a similar approach for Britain.
Cridland stated that as skills are important for big inward investors, they will expand to other countries if they do not find them in the UK.
He added that while UK had a good record of attracting inward investment in the past, it was based on low labor costs instead of skills. Cridland warned that the country is now at a tipping point with a real risk of being overtaken by those whose offers to investors are based on skills.
The taskforce’s report found that 46% of foreign companies stated they would move their operations elsewhere if they did not get their required skills, in comparison to 22% of local companies.
Additionally, 61% of foreign firms and 32% of domestic firms said they would expand abroad on not getting the skills they need in the UK.
The report further stated that UK FDI was concentrated mostly in economically dominant regions of London and the south-east, so offering higher-skilled jobs with better pay was important for the government’s leveling up agenda.
Cridland said that the connection between inward investment and skills had not been looked at before or considered at the time of developing the FDI policy, and added that he had heard from both local and foreign-owned firms that a lack of skills was keeping their businesses from growing and innovating.