London maintained its position as the tech capital of Europe, bringing in three times more tech FDI than Paris.

One of the major concerns regarding the UK’s decision to leave the EU was that foreign investment would also leave British shores, a concern which has seemingly failed to materialise according to new findings from an EY report.

The EY European Investment Monitor, UK Tech Report found that the total number of foreign direct investment (FDI) projects into the UK’s tech sector reached a ten year high in 2016 with 269 investments made. London also secured the largest share of tech foreign direct investment (FDI) in Europe, three times more than Paris.

However, these tech investment wins were somewhat of a silver lining when compared to the other findings in the report – findings which could further fuel the initial Brexit fears of an exodus of foreign investment.

2016 was found to be a year of very marginal growth – up only 0.4% compared to 2015. As a result, the UK’s market share fell from 30% of all tech investments across Europe in 2015 to 27% in 2016 – the lowest percentage recorded by the UK for FDI in the sector since 2008. At the same time, the total number of tech investments across Europe increased in 2016 by 9% – from 898 in 2015 to a ten-year high of 980.

“Although the UK’s increase in FDI projects could not match the stellar growth of the European market in 2016, there were no signs of any immediate drop in investment as a result of the outcome of the EU Referendum,” said Rahul Gautam, EY’s Head of Technology, Media and Telecommunications for the UK & Ireland.

“In the short-term, the UK has a solid base to build from with globally renowned strengths, which will help it to protect its leading position for inward investment in Europe and capitalise on future opportunities.”

Although London was found to maintain its leading position as the tech capital of Europe, the gap between London and the rest of the UK widened. The capital secured 63% of all inbound tech investments into the UK in 2016, compared to 57% in 2015 and 43% in 2007.

“The UK, and London in particular, continue to lead Europe for inbound tech investment, but there is no room for complacency. Last year saw growth slow overall and the success in London was not mirrored in other regions,” said Mr Gautam.

“In fact the volume of tech investment fell in the remainder of England, excluding the ‘Midlands Engine’, with the ‘Northern Powerhouse’ hit particularly hard – experiencing a drop of 34% from 35 projects in 2015 to 23 in 2016.”