Evaluation of inward investment in Forth Valley 1997 – 2002: final report

Inward investment aimed to help address job losses within traditional industries in the Forth Valley by attracting foreign direct investment and mobile investment from indigenous companies. The evaluation aimed to: assess the contribution that inward investment has made to restructuring the local economy; advise on its management, targeting, outcomes and impacts and the sustainability of the investment; identify new ways in which future investment activity should be developed; and review the approaches of other agencies to inward investment.

The methodology consisted of: desk research; consultations with SEFV, partner organisations within Forth Valley, and Scottish Development International (SDI); interviews with a sample of firms, covering those that had received support and a number who had chosen not to locate; and a review of inward investment operations elsewhere.

Concludes that Inward Investment has been effective in: addressing the economic imbalance in the area and generating employment. Finds that impacts include: a good additionality of just under 40% for SEFV and just under 50% for all public sector support; a net impact of £323 million at the Scotland level; firms’ sales of just under £310 million between 2004 and 2006; and 782 net jobs with a cost per job of £8,129. Highlights that the responses of councils differed notably. Suggests that the case handover between SDI and SEFV is not always smooth and that SE Network’s interest in firms waned once they had made their decision.

In the future, recommends that SEFV focus on: the positive marketing of the area’s benefits; good skills supply at competitive rates across different sectors; high quality, available premises; the different requirements of smaller firms; a dedicated resource to ‘land’ projects; follow-up to the investment decision; and growth support.