Ahead of the curve technology and science innovation in Cambridge brought a foreign investment boom for the city and the wider East of England region in 2007, EY reports.

The emerging global profile of digital enterprise helped Cambridge double the number of overseas investments in the UK cluster from seven to 14. The same digital dividend helped the East of England as a whole attract a record 59 foreign direct investment (FDI) projects last year – a 48 per cent increase on 2016.

Digital was the top sector for FDI in the East of England in 2017 – overtaking business services. The number of digital projects quintupled from three recorded projects in 2016 to 15 in 2017. Digital projects represented a quarter of all inward investment locating into the East of England in 2017.

EY says maximising the digital expertise abounding in the uK could help steam aside of investments leaking from Britain to Europe because of Brexit.

The sectors with the second and third highest number of projects locating in the region were pharmaceuticals and agri-food. Each recorded four projects in 2016 – and in 2017 pharmaceuticals increased by 125 per cent to nine projects; agri-food by 33 per cent to six projects.

The wholesale, retail and distribution sector provided two of the largest investments – both from Germany – in Peterborough and Bedford, creating 900 jobs in total.

Nick Gomer, managing partner at EY in the East, said: “These figures are great news for the East – not only has Cambridge doubled the number of FDI projects, but the East region has attracted 48 per cent more investment than in 2016. 

“Furthermore, while Peterborough and Bedford did not make the top 20 ranking in terms of volume of investment deals, they too have seen sizeable and significant investment, winning projects that have resulted in hundreds of jobs for the local area.

“The fact that 25 per cent of investments came from the digital sector does not surprise me, given it is a particular strength for the East. The region’s outstanding performance in 2017 gives us solid foundations as we continue to work towards rebalancing the UK economy; however, it remains crucial that we find ways to share the benefits of FDI more evenly across the country.”

The UK remains the number one destination for FDI in Europe, ahead of Germany and France, despite a decline in sentiment from foreign investors towards the UK as a place to invest. The UK attracted 1,205 FDI projects in 2017, a six per cent increase compared to 2016 (1,138).

Investors expressed clear concerns surrounding Brexit, which contributed to the UK’s waning attractiveness and a decline in FDI projects in certain sectors, including, financial services, business services and logistics. A 22 per cent increase in digital investments into the UK helped to cushion the hit and push the UK into growth territory.

According to the report, there was a marked increase in UK outbound investment by 35 per cent in 2017 to a new high. 110 of those investments went into Germany and 79 to France, as UK businesses appear to be accelerating their activity to position themselves for a post Brexit environment.

Gomer said: “The UK’s FDI performance shows an economy in transition, influenced by Brexit and the force of technological change. In 2017 a swell of digital projects flowed into Europe, changing the shape of FDI and bringing new dynamic businesses to the continent. Digital projects increased by 33 per cent across Europe – three times the rate of overall market growth – and quadrupled in the East, but only increased by 22 per cent across the UK as a whole.

“At a time when investor sentiment towards the UK as an attractive destination is weakening, opportunity arises in the shape of digital. An urgent digital drive is needed with a renewed focus on digital skills, infrastructure, and investment in research and development will help to shape the UK as an attractive environment, to maintain its competitiveness in a post-Brexit world.”

• PHOTOGRAPH SHOWS: Nick Gomer