Direct Investment from the EC: Recent Trends in the West Midlands Region and their Implications for Regional Development and Policy

Examines trends in the flows of direct investment to the West Midlands region of the UK during the 1980s. An analysis of Invest in Britain Bureau data reveals two trends of particular interest: the marked increase in the WMR′s share of FDI flows to the UK during the 1980s, and the unusually large flows to the region from EC countries. Two surveys on locational factors revealed the attraction of the WMR as being its central position within the UK and its good national, regional and local communications. The effect of those flows to the WMR was to alter the stock position so that, in 1989, 39 per cent of the stock of FOCs originated from other EC countries and 37 per cent from North America. A survey of 111 of these companies revealed a number of differences between the behaviour of FOCs from the EC and North America: in sectors and functions, employment and training, the sourcing of inputs, export markets and R&D activity. Hypothesizes that many of the differences can be explained by the different vintages of the investments. A major policy implication which arises from the analysis is that the full benefits of FDI to a region take time to build up. Moreover, local policy action may be necessary to capture these long‐term benefits.