The July issue of The Director summarised a report of the Management Information Ltd. concerning U.S. direct investment in the U.K. We reproduce the main part of the summary:
"Whether direct American investment in Britain is welcome or not = and a moment's reflection on the spur provided to British industry and commerce by U.S. know-how and finance suggests the answer - there can be no argument about its importance. Its size and direction can, for example, provide some kind of yardstick of local efficiency: for U.S. concerns invest abroad not only defensively - to leap over the tariff barriers = but also aggressively, to take advantage of lower production costs or, more significantly, to exploit profitable and expanding markets. By this token, if American companies stopped investment possibilities in Britain or those already here stopped adding to their stake, this wuld be as sure a sign as any that the U.K. had dropped for good out of the growth race4
"...A timely study published by the Management Information Ltd concetr= ates on the course of direct U.S. investment in Britain over the last 12 years, and,...reaches the following conclusions: Disregarding the effect of changing money values, the present value of U.S. direct investment is 44 times the figure for 1950 (for 1962, 3,805million dollars, against 847million dollars in 1950). The rate of growth in the value of this capital "has been considerably faster in the second half of this period than in the first." Over the period, manufacturing industry has “consistently accounted for about # of the total U.S. capital stake, with petroleum increasing its share."...Finally, “the profitability of U.S. direct investment in manufacturing here appears to have fallen fairly consistently over the period,"
"Is the U.K. getting not too much American investment but too little? The report points out that Britain's share "has declined over the period 1950-62 from 48.% to A3%, whereas the share of those countries which now form the EEC has risen from 36.7% to 41.5%. If the figures of U.S. direct investment in European manufacturing industry are analysed, the same situation is repeated, with the U.K.'s share falling from about 60% in 1950 to 52% in 1962, and the EEC's share rising from 34% to 43%.e"sec0it is worth pondering its comment that the rate of growth of U.S. direct investment in a country "is at least associated with the rate of growth of real gross national product, or of industrial production, and the past profitability of such investment...the U.K.'s declining share of U.S. direct investment in Western Europe is probably more closely associated with the slow growth of her economy, relative to other Western European countries, than to any other single factor."