Ordinarily around one in five new ventures dies within its first year and two in five fail to survive beyond three years. But in dynamic economic sectors — where companies compete on the innovation of their products or services — the likelihood of failure increases substantially as a result of competition from multinationals locating in Britain.

Latest figures from UK Trade and Investment show that Britain attracted record levels of global investment last year, the fourth consecutive year the record has been broken. The UK is the largest recipient of foreign direct investment in Europe and second only to the US worldwide. According to GEP, in 1998, 12 per cent of UK employment was in foreign-owned multinational companies. By 2002, the last year of data, this share rose to 17 per cent — a 42 per cent increase over the period.