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Foreign direct investment (FDI) is pivotal to the UK economy, with the UK being both the second largest investor abroad and the second largest host to foreign companies. Although since the Second World War FDI has been dominated by the USA, the more recent rise of Japan as both an international force in global markets and as an investor, has seen increasing amounts of Japanese FDI being directed towards the UK. Further, the perceived innovativeness of Japanese work organisation is held by many to have an even greater qualitative impact than the quantitative significance of Japanese FDI would indicate, providing both a 'demonstration' effect and a competitive spur to indigenous companies that it is believed has the power to transform the UK's competitiveness.
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