fDi’s European Cities of the Future 2020/21 – London maintains European pre-eminence

Despite Brexit uncertainty, London has held on to its title as the overall European City of the Future for 2020/21. The UK capital gave a well-rounded performance in the review period, topping five out of seven category tables in the major cities classification.

London attracted 2257 FDI projects between October 2014 and September 2019, the highest out of all 319 cities analysed. North American investors were responsible for almost half (44%) of the total projects during this period, followed by companies from western Europe (26%) and the Asia-Pacific region (18%).

US-based titans including Amazon and Uber announced plans to expand in the city in 2019, while social media giant Facebook is to open a new engineering centre in London's Soho district. The opening will create 500 new jobs, including 100 AI roles.

Tech leader

Software and IT services continued to dominate London’s investment landscape, with the sector accounting for more than 40% of its inward FDI projects in the 2014 to 2019 period. In March 2019, US-based cloud tech start-up Pendo announced plans to open a Europe, Middle East and Africa office in the UK capital, crediting “its rich pool of technology talent and cultural diversity, and proximity to a growing customer base in Europe”.

According to research compiled by London & Partners, analysis of LinkedIn members showed that London welcomed more European and non-EU tech professionals than any other major European city in 2018. In addition, data from Stack Overflow, an online community for programmers, showed that London is home to more software developers than any other European city, with more than 357,900 employees.

The UK capital city is home to eight of the world’s top 500 universities and more than 57% of Londoners aged 25 to 64 have reached third-level education, contributing to it being crowned the best major European city in the Human Capital and Lifestyle category. It also tops the Connectivity category for major cities, with investors benefiting from six international airports within 80 kilometres, directly serving a total of 357 international destinations.

London is awarded the best major European city for Business Friendliness title because companies can start a business in fewer than five days, and there are more than 80,000 companies in the knowledge-based sector in the city.

Paris rises

Paris climbs to second place in this year’s ranking of European cities, up from third in the 2018/19 study. The City of Lights attracted 1054 FDI projects between October 2014 and September 2019 – the second highest of all locations studied – and experienced a 46% increase in project numbers compared with the period analysed in the 2018/19 ranking.

Almost half (47%) of these inbound projects were from western European investors, followed by those from North America (34%) and the Asia-Pacific region (11%). In July 2019, US-based scooter sharing start-up Bird Transportation announced plans to open a new European hub in the French capital, creating 1000 new jobs across marketing, communications, legal and operations.

With 407 projects recorded between October 2014 and September 2019, software and IT services was the leading sector for Paris with regards to inward investment. More FDI projects were recorded in the sector than the rest of the top five combined (business services, financial services, real estate and communications). Capital investment in the software and IT services sector totalled $2.73bn in the aforementioned period.

Start-up strategy

In June 2017, French president Emmanuel Macron unveiled several initiatives aimed at turning France into a 'start-up nation', including a €10bn fund to promote innovation across the country and support entrepreneurs. Paris is home to the world’s biggest start-up campus, Station F, and has more than 60 incubators and accelerators, hundreds of co-working spaces and 30 digital manufacturing workshops.

Between 2009 and 2018, more than 11,000 patents were registered in the city, cementing Paris as one of Europe’s most innovative cities and landing it the award for the best major city for Economic Potential.

Additionally, it is placed third in the Human Capital and Lifestyle category for major cities. The city is home to several of the world’s top 500 universities including the Sorbonne and the Paris-Sud University, and the average life expectancy of citizens is more than 84 years.

Paris ranks fourth in the major cities Connectivity category, with two international airports that directly serve more than 280 destinations worldwide, performing well in the Environment Performance Index, Logistics Performance Index and ICT Development Index.

Dublin's HQ strength

Dublin, Ireland’s capital and largest city, comes in third out of all European cities surveyed and attracted the third highest number of FDI projects. Between October 2014 and September 2019, the city received 543 investments, almost one-third of which were in business services; more than one-quarter were in sales, marketing and support functions and almost one-fifth were in headquarters operations.

Almost one-third of Dublin’s inward FDI projects recorded during this time were expansions or co-location projects, reinforcing its status as a centre for reinvestment and contributing to its third place in the Business Friendliness category for major cities.

In April 2019, jobs search engine Indeed (a subsidiary of Japan-based Recruit Holdings) announced plans to create 600 new jobs at its EMEA headquarters in Dublin by 2024. Moreover, in June of the same year, US-based business networking company LinkedIn revealed it was hiring an extra 800 staff at its hub in the city.