UK Holds Its Ground as World's Second-Most Attractive Investment Destination - PwC's 29th CEO Survey

The UK is still one of the most attractive places on Earth for international investment.

But the gap is closing. Fast.

PwC's 29th Annual Global CEO Survey, released this week at Davos, shows that while Britain holds onto its second-place ranking for global investment intentions, it's no longer alone. Germany and India have caught up, with all three countries now tied at 13% of global CEO investment plans.

That's a wake-up call for anyone building a tech startup in the UK.

What the Numbers Actually Say

Let's break down the headline findings.

The US remains the world's top investment destination, extending its lead to 35% (up from 30% last year). The UK, Germany, and India now share second place at 13% each.

Here's where it gets interesting. Last year, the UK sat at 14% alone in second place. Germany was at 12%. India? Just 7%.

That means India has effectively doubled its investment appeal in 12 months. If you're a founder thinking about where the smart money is flowing globally, that's a trend worth watching.

For UK tech founders, this matters because foreign investment has been a major driver of the ecosystem's growth. When global CEOs allocate capital to the UK, it flows into startups through venture funds, corporate partnerships, and expansion hiring.

UK CEOs Are Getting Nervous

The survey reveals a sharp drop in domestic confidence.

A quarter (25%) of UK CEOs now expect the UK economy to decline over the next 12 months, nearly double the 13% who said the same last year. Only 38% expect growth, down from 61% in 2025.

Yet UK business leaders remain more bullish about the global economy, with 60% expecting improvement. The message? British CEOs see opportunity abroad, even as they worry about conditions at home.

Marco Amitrano, Senior Partner at PwC UK, put it bluntly: "Being the world's second-most important investment destination for a second-year running should not be underestimated. It demonstrates that the UK still looks stable in a turbulent world. But in now sharing that position it's also a wake-up call."

The AI Investment Paradox

Here's a puzzle for founders to consider.

UK CEOs are throwing money at technology. Eight in ten (81%) now rank tech, AI, and data as their top investment priority, up from 60% last year.

But the returns aren't materialising. Only 21% of UK CEOs report revenue growth from AI in the last 12 months, compared to 29% of their global peers. Just 30% have seen AI reduce costs.

What's going wrong?

The survey points to two culprits: insufficient investment and a talent crunch. Only a third of UK CEOs (33%) believe their AI spending is sufficient to meet their goals, versus 40% globally. And just a quarter (25%) think they can attract high-quality talent, compared to 75% in China.

For founders building AI-focused startups in the UK, this creates both challenge and opportunity. The challenge: you're competing for scarce talent. The opportunity: corporates are hungry to buy what they can't build.

Bureaucracy Is Dragging Britain Down

Half of UK CEOs (50%) worry their business isn't transforming fast enough to keep pace with technological change.

The culprit? Internal friction.

One third (33%) say their companies have too many unnecessary bureaucratic processes. A quarter (25%) believe their organisational structure is suboptimal. Another third question whether they have the right leadership team in place.

This matters for startups because large enterprises are your potential customers, partners, and acquirers. When they're bogged down in internal politics and slow decision-making, deals take longer. Pilots stall. Procurement cycles drag on.

If you're creating a pitch deck to approach corporates, expect longer timelines and build relationships early.

Tariffs and Trade: UK Founders Less Exposed

Some good news amid the uncertainty.

UK CEOs feel significantly less exposed to tariffs and macroeconomic volatility than their global counterparts. Only 9% see their business as significantly exposed to tariffs, versus 20% globally. Just 11% feel significantly exposed to inflation, compared to 25% worldwide.

This relative insulation could give UK startups a competitive edge when approaching international investors. In a world of trade tensions and economic turbulence, British stability, however fragile it might feel domestically, looks attractive from abroad.

M&A Appetite Is Cooling

Four in ten UK CEOs (40%) say they're not anticipating any M&A activity in the next 12 months. Seven in ten (72%) don't plan to divest any part of their business.

For founders hoping for an exit, this is a mixed signal. Fewer acquisitions means fewer opportunities to sell. But it also means corporates may be more open to partnerships, pilot programmes, and licensing deals as alternatives to outright acquisition.

What This Means for UK Tech Founders

The UK's position as a global investment magnet isn't guaranteed. India's rapid rise shows how quickly the landscape can shift when a country makes itself attractive to capital.

But Britain still has structural advantages: a strong legal system, English as a business language, access to European markets (albeit with more friction post-Brexit), and a deep pool of financial services expertise.

The real risk isn't that the UK becomes unattractive overnight. It's that other countries move faster to support their growth sectors while Britain drifts.

For founders, the message is clear: build relationships with international investors now, while the UK's reputation is strong. Don't assume the money will always flow in your direction.

The window is open. But windows close.

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