International Relocation
Over the last 10 years, the decision as to where to relocate, expand or consolidate existing
operations has become a more and more important one for companies operating internationally.
Chief Executives now want to visit all shortlisted potential premises and sites.
Because of the introduction of the European Single Market, the next few years will be critical for
the UK as a relocation destination, as many multinationals will be deciding on the location of a
European Headquarters for their pan-European operations and indeed on central points and
Operation Centres for the treatment of then European Market as a single market, as opposed to a
fragmented one.
Relocation in a European setting is also becoming a priority for many multinationals due to the fact
that many European countries have now emerged from recession.
As such, inward investment into Europe is becoming quite substantial with inward flows from the
US and East Asia reaching 62.4 billion US dollars in 1994.
The UK does best of all European countries in obtaining inward investment. It is currently receiving
as much as 40% of all direct foreign investment coming into Europe. Recent inward
investments include Samsung of South Korea, Siemens, NEC and Fujitsu from Japan and Motorola
and Ford from the US.
All the same, the UK will have to fight to maintain this popularity for relocation due to increased
competition by other European countries for inward investment. There is much more marketing of
European locations now than there ever has been and multinational companies are becoming
increasingly aware that there is indeed competition. In fact, according to Ernst and Young's
publication Regions of the New Europe, there are now possibly more than 1000 agencies in Europe
which have as their "sole or key objective" the attraction of inward investment.
Traditionally the UK has a poor reputation as a distribution centre because of its location at the very
margins of Europe. However, as the Community grows bigger and the centre of gravity shifts,
access to efficient transport links will become more important than actual location as a relocation factor.
The UK is well placed to continue to win a large slice of the expanding relocation market in the
next few years. However, much will depend on the determination of UK organisations to win that
business and the strategies they put in place to continue to do so.
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