to spending on programs that support growth and innovation however this was partly successful
during that time but with the united states exit it will become more difficult to achieve.
Foreign Direct Investment- a lot of big corporates in Europe have heavily invested in
the United Kingdom and the commercial logistics behind these investments will be greatly
affected by Brexit. The cost incurred during adjustment by this corporates in Europe as a result
of Brexit should also be considered. Also after the Brexit the United Kingdom may seek to
compete very aggressively for more investment by undercutting the European Union on taxation
and business environment hence presenting a bigger challenge to the European Union in terms of
foreign direct investment.
Foreign direct investment located in United Kingdom comes disproportionately from a
small number of member countries within the European Union namely; France, Germany, Spain,
Ireland, Netherlands and Luxembourg. The European Union FDI is more into the energy sector,
retail and wholesale trade, manufacturing sector and the transport sector than in the financial and
professional services. The united kingdoms has been very successful in attracting FDI projects
and jobs and this may create opportunity and risk for other European union member states when
Brexit occurs since their main competitor will be gone. Whether the European countries will
make good use of the opportunity will depend on how well they will respond to the loss of
United Kingdom competitiveness. One of the major challenges would be how they can attract
European headquarters for multinationals away from the United Kingdom although this will
depend mainly on the business environment created by these countries.
However, the United Kingdom will most likely find ways of restoring their
competitiveness in the FDI offers even when they are out of the European Union. They might do
this by undercutting the European Union further on social regulations and taxation with an aim