The United Kingdom

Abstract

Abstract This case study on the impact of globalization on the UK views the question of the evolution of macro‐organizational policies from the perspective of its approach to FDI (foreign direct investment) policy, and covers related issues with that in mind; this is because FDI is a particularly relevant driver of globalization and an arena within which government and business interaction can be readily studied in the UK. The chapter is in five main sections, starting with a review of the background to inward and outward FDI and reviewing its contribution. The second section provides an overview of the radical directional policy changes that were implemented in the UK between the late 1970s and the early 1990s in order to enhance competitiveness; this includes a more detailed and critical review of five ingredients of the policy: macroeconomic management; FDI; technology and R&D; employment, training and the labour market; and regional economic development. The third section briefly reviews three sectoral cases, which amply illustrate some of the policy challenges that have emerged for UK governments over this period as a consequence of the growing globalization of economic activity: these are the electronics industry in Scotland, the automotive industry and the financial services sector represented by the City of London. The fourth section explores the degree to which EU (European Union) policies have aided or retarded FDI and competitiveness in the UK, while the final section sets out some conclusions and propositions regarding UK competitiveness and the policies that have been adopted to enhance it.