British economy is highly developed and intensely competitive. The UK has transparent legislation and efficient state administration. It is not easy to determine the most promising areas for investment precisely; each investor has to follow standard procedures for calculation of the particular project profitability.
The UK has maintained traditional links with its former colonies and dependent territories (the states of the Commonwealth). Owing to the economical interconnection British companies invest mainly in these countries.
Promising investment areas include:
- power engineering (nuclear power, renewable resources, low-carbon technologies)
- biotechnology, medicine development
- creative industry
During Margaret Thatcher’s rule (from 1979 to 1990) a big privatization wave took place in the UK; in those years, over 60 state-owned enterprises worth £70 billion were sold. The privatized sectors included power engineering, telecommunications, steelworks as well as air and railway transport. The last significant scope for privatization can be still found in public services.
The projects Private Finance Initiative
(PFI) and Public Private Partnership
(PPP) are examples of important involvement of the private sector in providing public services. Within PFI, a private company builds various facilities for the public sector such as hospitals, roads, schools, prisons etc. and goes on to manage them for a certain period of time (20-30 years). The expenses connected with the construction and management are paid to the private company in monthly instalments by the public sector. The main advantage of PFI projects lies in the fact that they enable the government to pay for financially intensive investment within a long period of time. Activities of PPP projects involve private enterprises that manage an already existing public sector installation and are thus paid monthly for the operating costs only.
The greatest PFI/PPP project so far has concerned the maintenance and modernization of the London underground infrastructure
(tracks, underground trains, stations) worth £6.7 billion. Other PFI/PPP projects are being realized particularly in the areas of transport, health care service, defence, education, prison service and environmental protection (waste management).