Through a combination of “static” (corporate tax burden) and “dynamic” (real GDP growth) indicators, the Grant Thornton “Global Dynamism Index” (GDI) highlights the potential for business growth in each market.
While the UK may have jumped seven places in the GDI, it still only ranks 27th out of the 60 featuring economies.
The GDI identified a sound operating environment as the UK’s major strength, while it also ranked in the top 20 for technology due to strong growth in IT spending and high broadband penetration. The UK is also one of only two European economies ? along with Ireland ? to rank in the top half of the index for market growth.
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Robert Hannah, COO at Grant Thornton UK, said: “The UK has historically been an attractive destination in the minds of global investors on account of its relative political and economic stability. What’s evident from the research is that the UK risks being overshadowed in competitiveness by higher-growth and more dynamic markets which have opened up in recent years.
For the UK to maintain and improve its competitiveness on the global stage, it has to do more to encourage the investments in infrastructure, technology, productivity and other dynamic indicators which ultimately power the economy and instil confidence in its long-term growth prospects.”
Further analysis showed that the UKs positive aspects are reflected in the views of international investors. According to Grant Thorntons “International Business Report” survey, just nine per cent of businesses expanding into the UK are concerned about political uncertainty. And 29 per cent are worried about local legislation one of the lowest proportions among major economies.
Furthermore, 70 per cent of foreign investors operating in the UK or looking to expand here, say they see it as a key market , more than for any other major economy covered by the IBR.
Hannah said: At the moment, the UK is benefiting from this perception bias. Businesses clearly feel that there are numerous advantages to doing business in the UK that might not be captured in official data. For many organisations, the UK offers an attractive gateway into mainland Europe.
“Yet, our success rate in attracting inward investment varies significantly across the country, with London accounting for over 40 per cent of all foreign owned businesses in England. This geographic imbalance needs to be addressed if the UK is to truly fulfil its potential as a vibrant and diversified economy which is fit for purpose in the long-run.”