That’s the reason European site consultant Elias van Herwaarden believes many U.S. companies continue to tap the United Kingdom for foreign investments.

“Foreign direct investment is risky,” said van Herwaarden, director of Deloitte & Touche Fantus Business Location Services in Brussels, Belgium. “That last thing you want to do is go somewhere that is radically different to the place you know. The United Kingdom has been a traditionally good environment. It’s the least risky option and it’s the most culturally similar. U.S. companies have had so much success there that even today the UK seems to benefit from its past success.”

The 2003 “European Investment Monitor” from Ernst & Young backs up van Herwaarden’s claim. Despite a slight decline in the total number of projects throughout Europe in 2002, the United Kingdom remains the continent’s top inward investment location.

That’s somewhat shocking since overall foreign direct investment in the UK has declined from $130 billion in 2000 to just $25 billion in 2002, dropping the country from second to seventh in the world in that important category.

Much of the UK’s loss was because of the sluggish U.S. economy, where outward foreign direct investment has dropped from $314 billion to just $30 billion during the past two years.

But investments from other sources, primarily its European neighbors, helped overall investments drop just 5 percent in 2002. The United Kingdom still received 19 percent of all projects in Europe, a full six percentage points higher than runner-up France.

“It always a tug-of-war between the United Kingdom and France,” van Herwaarden said. “Those two are way ahead of the rest of us.”

According to Ernst & Young, the United Kingdom is also the top European location for research and development facilities, contact centers and manufacturing.

In fact, manufacturing projects increased by 15 percent in 2002, pushing the country ahead of France in that department.

And a recent survey by Reuters and the Chartered Institute of Purchasing and Supply said that while the UK’s manufacturing output rose less than 1 percent in July, it was significant because it was the first positive figure in more than two years.

The manufacturing growth falls in line with a report by the Office of National Statistics that said overall employment rose by 63,000 to 27.92 million in the second quarter of 2003, the highest level since records began in 1984.

Chemistry Company Locates in UK

When it comes to breaking down the 2002 projects

by sector, the “European Investment Monitor” shows that the United Kingdom fares well, leading the way in telecommunications, automotive assembly, software, financial services and electronics.

One recent U.S. company to invest in the United Kingdom is Durham, N.C.,-based SCYNEXIS Inc. In June, the company opened a 30,000 square foot discovery chemistry facility in Essex. The highly automated research and development lab employs 42 chemists, and is situated in the heart of the growing life sciences corridor between London and Cambridge.

“Breakthroughs in drug discovery made here at SCYNEXIS will benefit the wealth of the East of England, and more importantly, the health of us all,” said Science and Innovation Minister Lord Sainsbury in a release issued by the company.

SCYNEXIS’ announcement is important after the United Kingdom saw its position in pharmaceutical investments slip to second among European nations in 2002.

France moved into the top spot in that sector with 19 percent of all pharmaceutical investments in Europe last year, with the United Kingdom attracting 17 percent.

The second major announcement in June came from aerospace giant Boeing, which agreed to help launch a new Advanced Manufacturing Park (AMP) in South Yorkshire through a partnership with the University of Sheffield.

Boeing is taking advantage of the advances in metal technology at the university.

When the nearly 100-acre site is completed, more than 4,500 new jobs could potentially be added at the country’s latest high-tech hub for the advanced engineering and metals cluster.

Another major tenant in the park will be Castings Technology International (CTI), which also announced in June that it had chosen the AMP site for its new headquarters.

CTI’s facility will include a 57,000 square foot workshop, with an additional 17,000 square foot of office space. The company will add 50 jobs, bringing total employment to nearly 200.

And Tempe Ariz.,-based Insight Enterprises Inc. is still moving forward with plans to move into the park by June 2007. When the computer software supplier first made the announcement two years ago, more than 1,700 jobs were to be added at the company’s new $96 million European headquarters. Because of the economic downturn since the announcement, those numbers are expected to be lower.

The exact opposite holds true in Warrington, where developers are still in the early stages of a colossal business and technology park that could generate as many as 24,000 jobs during the next two decades.

The 558-acre Omega business park near Warrington, located midway between Liverpool and Manchester, is a $1 billion brownfield project under construction at the site of a former U.S. Air Base.

RAF Burtonwood was once the largest U.S. air base in Europe and served as the principal arrival station for U.S. forces during World War II. The base was officially closed in 1993.

The park is also at the center of the UK’s motorway system and is within a two-hour drive of 23 million consumers and 60 percent of British industry.

Perhaps even more appealing to executives searching for a new European presence is the fact that Warrington and the surrounding North West region are already outperforming the rest of the United Kingdom and Europe.

Local officials expect economic growth in the region to continue growing at a 3.1 percent clip annually, while employment levels have grown 18 percent during the past five years.

That figure should only continue to climb as the Omega project is expected to directly create 12,000 jobs in the next 10 years.

Dan Perkins is a freelance writer based in St. Louis.