Is there an economic rationale for outward investment promotion?
19. As with FDI, investment by UK companies abroad can take various forms, from the setting up of a subsidiary in a host country to the outright takeover of a foreign firm. The returns on such investments can be beneficial to the UK if they are sent back to the parent company, thus representing a capital inflow. Furthermore, often it is only by making such overseas investments that UK companies can build or even maintain their international presence and market share. In the context of increasing globalisation one of the primary ways in which outward investment is currently helping UK firms is in allowing them to outsource or offshore some of their lower value activities to countries that have cheaper labour and rental costs.[36] Perhaps the best known example is the move by several banks and insurance companies to outsource call centre work to places such as Bangalore in India. While such actions are often seen as ‘exporting British jobs’, EEF told us that in markets open to competitio
