Insider Media Limited

Businesses in the West Midlands must prepare to attract investment from Brazil, Russia, India and China (BRIC) as emerging markets begin to replace more traditional sources of inward investment, according to PwC.

The US is currently the UK’s leading source of inward investment and was responsible for 19 per cent of Foreign Direct Investment (FDI) in Europe in 2009.

However, a recent PwC report suggests that the rise of the E7 emerging economies in countries such as Brazil, Russia, India and China (BRIC), Mexico, Indonesia and Turkey is inexorable and based on a measure of GDP, they are likely to overtake the G7 economies (US, Japan, Germany, UK, France, Italy and Canada) before 2020.

Phil Harrold, partner and head of inbound services at PwC in the Midlands, said: “US businesses have been investing in the UK for many years and recently they have been particularly interested in expanding into hi-tech industries. However, the lack of a favourable grant support system, combined with an increase in red tape including tax legislation and business regulation, is not helping the UK to remain competitive.

“As emerging economies begin to accelerate away, with growth rates currently about four times greater than we have here in the UK, it is vital that companies in the region begin to consider how to attract investment in the future.

“Businesses in India have been the forerunners in terms of taking up investment opportunities in the UK, partly for cultural reasons and also because there is a more established precedent for international trading in India than in some other emerging markets. Countries like China are more focused on their domestic market but this is beginning to change and they are increasingly seeking technology partners in other parts of the world.”