England attracted 774 foreign direct investment projects in the 2025/26 financial year, creating 38,956 new jobs. That is a substantial vote of confidence in the country’s economy, but the headline conceals a more revealing pattern: business development is highly concentrated in London, while several regions are competing through scale, specialist industries and the ability to turn individual investments into large employment gains.
London alone secured 326 investment projects and 14,261 new jobs, more than any other English region. Its lead is not marginal. The capital accounted for roughly two-fifths of all projects and more than a third of the new positions created through foreign investment across England. It also recorded the United Kingdom’s highest business birth rate in 2024, at 12.7 percent.
Those figures describe a place with a powerful ability to attract capital and generate new companies. They do not describe the entire English business landscape, however. Outside the capital, development follows a less predictable map.
London’s advantage is built on density
London’s strength comes from the way its economic assets reinforce one another. International companies can find investors, legal and financial services, skilled workers, research institutions, clients and global transport links within a relatively compact area. A new business does not have to build every relationship from scratch; much of the commercial infrastructure is already nearby.
That density helps explain why the capital performs strongly both in attracting overseas projects and in creating new firms. A high business birth rate is not simply a sign of entrepreneurial enthusiasm. It also reflects access to customers, professional services, finance and employees willing to move between companies or start something of their own.
The risk is that London’s success can make national performance look healthier than the experience of many businesses elsewhere. A company in the capital may be operating in a deep pool of talent and suppliers, while a comparable firm in another region faces a thinner market or more expensive connections to it. England’s development challenge is therefore not to weaken London, but to give other places stronger reasons for investors to choose them.
The North West is the strongest challenger outside the capital
The North West recorded 115 investment projects and 5,254 new jobs in the same financial year. It was the strongest English region outside London by both measures, although the gap in project numbers between the North West and London remains considerable.
The region benefits from a broad economic base rather than dependence on a single city or industry. Manchester, Liverpool and the surrounding areas offer established strengths in digital services, advanced manufacturing, life sciences, logistics and creative industries. That mix matters because it gives investors more than one entry point and creates opportunities for companies to sell to one another locally.
A region with 115 projects is not merely collecting isolated announcements. Each project can add demand for accountants, engineers, construction firms, software specialists, transport providers and other businesses. The quality of development depends on whether those links remain in the region. If an investment creates jobs but imports most of its suppliers and senior expertise, its wider effect is smaller than the headline number suggests.
The North West’s figures indicate a comparatively balanced position: enough projects to build a broad pipeline, alongside enough employment creation to make the investment visible beyond boardrooms and economic reports.
The East of England shows why project counts can mislead
The East of England attracted only 35 projects, far fewer than the North West’s 115 and well below London’s 326. Yet those projects created 5,216 new jobs, almost matching the North West’s total. The number of new jobs rose by 211.2 percent year on year.
That contrast is one of the most striking features of the regional data. The East of England’s average employment gain per project was much higher than in London or the North West. The result points towards a different investment profile, with fewer but potentially larger projects carrying a heavier share of regional job creation.
A single large development can transform the annual figures for a smaller region. It can also place more pressure on local infrastructure, housing, transport and skills systems. A region that creates thousands of jobs from a modest number of projects needs enough workers, training capacity and commercial space to support the next stage. Otherwise, the first success can expose the limits of the local economy rather than solve them.
The East of England’s performance also complicates the assumption that more projects always mean stronger development. A high volume of small investments can create a resilient business ecosystem, but a handful of substantial commitments may produce faster employment growth. These are different forms of success, and they should not be judged by one metric.
This is where the numbers become more interesting than the rankings.
West Midlands combines volume with industrial depth
The West Midlands recorded 98 investment projects and 4,634 new jobs. Its project total placed it well ahead of the East of England and close to the North West, while its employment figure showed a strong, though less dramatic, conversion of investment into work.
The region’s economic identity is closely associated with manufacturing, engineering, automotive production and logistics, but its development story is broader than traditional industry. Companies operating in these fields increasingly depend on software, battery technology, automation, data analysis and low-carbon production. That creates room for investment that may not arrive with the language of a new factory but still changes the capabilities of local businesses.
Industrial regions often have an advantage that is easy to miss in discussions focused on start-ups: they possess practical knowledge. Skilled technicians, specialist suppliers and production experience cannot be created overnight by announcing a new innovation district. Where those capabilities already exist, investors can move more quickly from a proposal to a functioning operation.
The challenge lies in keeping that industrial base competitive. New investment will be drawn to regions that can offer reliable infrastructure, technical education and a supply chain able to meet demanding standards. Attractive buildings are not enough. Investors need evidence that the surrounding economy can deliver.
What the regional gap says about business development
The investment figures suggest three distinct models operating within England. London combines high project volume with a large concentration of professional services and entrepreneurial activity. The North West offers scale across several major cities and sectors. The East of England demonstrates how a smaller number of projects can generate an exceptional employment result, while the West Midlands brings together investment volume and industrial capability.
None of these models can simply be copied elsewhere. London’s density took decades to build. The North West’s strength depends on the interaction between its cities, universities and industries. The East of England’s employment surge may reflect the composition and size of the projects it attracted rather than a repeatable formula. The West Midlands has to modernise a deep industrial base without losing the skills and suppliers that make it valuable.
For policymakers, that means regional development should be measured with more precision. Project totals reveal investor interest, but not the scale of each commitment. Job totals show immediate impact, but not whether positions are high-skilled, secure or connected to local supply chains. Business birth rates capture entrepreneurial activity, but not whether new firms survive and grow.
For companies, the geography offers a similarly practical lesson. London remains the easiest place to access international networks and specialist services, but it is not the only place where a business can find momentum. The North West provides a broader regional market, the West Midlands offers industrial depth, and the East of England has shown that a limited number of well-placed investments can produce remarkable results.
England’s next phase of business development will depend less on producing one winning region than on making these different strengths work harder. That calls for better connections between universities and firms, stronger technical training, dependable transport and energy infrastructure, and local supply chains capable of capturing more of the value created by foreign investment.
The figures already show that growth is not confined to one postcode. They also show how far England still has to go before opportunity is distributed with the same consistency as capital.