2 Economic Development - World Class Scotland

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The Glasgow Arc
A time for positive action
[ECONOMIC DEVELOPMENT
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The Scottish Parliament
A time for positive action
Iain McMillan CBE,
Director, CBI Scotland
Iain McMillan
The country must work to overcome constitutional
uncertainty and the prospect of a difficult growth
period and continue to show resilience
Scotland remains one of the most diverse and interesting
business environments - from whisky to bio-technology
and tourism to green energy. Scottish businesses are
world-renowned for the excellent products and services
they provide and the intellectual property developed here.
But despite our past successes and future potential, times continue
to be challenging for Scottish firms, as they are for those across the
rest of the UK. And our growth is just as fragile. This reflects the
wider conditions across the EU, the US and some developing
countries. And it’s obvious that the heightened concerns surrounding
the, as yet, fully unresolved euro-zone crisis have contributed to our
disappointing performance.
The overall impact has resulted in a becalmed business optimism,
fuelled by lower expectations for export and domestic orders.
However, despite these challenging economic times, the Scottish
labour market is showing some resilience, with jobs being created
and fewer people unemployed.
It is therefore crucial, now more than ever, for our politicians to
do the right things for business and to make the growth of the UK
and Scottish economies their top priority. That is why the role of the
CBI in championing Scottish business interests has never been more
important: our voice ensures that those firms that will lead us back
to economic prosperity are being heard by decision-makers both
in Edinburgh and London.
It is encouraging to note that some positive action is taking place
in our parliaments - including at Westminster where the stated aim
is decisive action on the deficit and plans for growth, although in
some cases delivery has been disappointing. Business tax reform,
prioritising trade and investment, and the positive approach to
enterprise and industrial policy, are all important too.
At a Scottish level it is heartening to note that a key focus of the
government is sustainable economic growth which was backed
with positive messages on planning reform, capital investment and
a focus on skills including literacy and numeracy. CBI Scotland is
working with the Scottish Government and indeed all MSPs to help
deliver key policies which encourage economic growth, trade
and investment, and which respond imaginatively to the fiscal
challenges ahead. However, performance is mixed, with some
unwelcome business rates increases and rail investment severely
cut back.
If there is one thing that will set Scotland’s recovery apart from
the rest of the UK, however, it is that our return to growth is taking
place against a backdrop of constitutional debate.
The implementation of the Scotland Act and the looming
independence referendum, will shape and affect almost every
area of Scottish society in the coming years, and business is no
exception. It will thus be important for the private sector to engage
with these processes and CBI Scotland will continue to be at the
forefront of discussions on behalf of our members and firms across
the country.
Undoubtedly the prospects of a difficult growth period and
constitutional uncertainty will bring challenges for Scotland’s
business community. There will certainly be opportunities for
growth going forward. But, over the next two years, the prospect
of a referendum on Scotland’s future in the United Kingdom is
particularly unwelcome and unhelpful to Scotland’s immediate
economic prospects.
The CBI in Scotland remains – as ever - well placed to help
businesses realise their potential and come out of the next few
years stronger, leaner and more innovative than ever.
[ It is crucial, now more than ever, for our politicians to
do the right things for business and to make the growth
of the UK and Scottish economies their top priority ]
[ WORLD CLASS SCOTLAND Economic Development
[ CBI Scotland
16 Robertson Street
Glasgow
G2 8DS
Tel: 0141 222 2184
Fax: 0141 222 2187
www.cbi.org.uk
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Bitexco Tower, Vietnam
Global ambitions
Professor Lesley Sawers,
Chief Executive, SCDI
The SCDI has called for the ambitious
target of doubling Scotland’s exports over
the next decade - a target that is possible
with a focused partnership approach
Professor Lesley Sawers, Chief Executive, SCDI
In the Scottish business community, it is
recognised that financial stability and
growth will be achieved, in large part,
through the increased
internationalisation of Scottish
businesses. Selling overseas and building
trade links in dynamic and vibrant markets
is therefore a key focus for companies in
2013.
SCDI’s international credentials have
been built over the last 80 years. Since
1931, SCDI has been working to promote
and support Scottish businesses in both
domestic and international markets.
In 2012 we directly supported Scottish
business with visits to India, Brazil, China,
the Middle East and North America. These
trade visits involved 84 participants and
generated £5 million worth of business.
However, we need to do more to
encourage small to medium-sized
enterprises to develop their overseas trade.
SCDI has called for the ambitious target of
doubling Scotland’s exports over the next
decade - a target that is possible with a
focused partnership approach across the
public and private sector.
Scottish businesses must look to high
growth markets and adopt a global mindset
within the international marketplace.
Emerging market economies are
growing at an average rate of 8% pa and
are now responsible for 50% of global
growth. Despite these strong growth rates
and opportunities, Scotland currently
exports more to Germany than any of the
four BRIC countries combined.
With just 5% of UK exports destined for
the BRIC economies, we need to increase
our global competitiveness to take
advantage of these countries’ rapid pace
of development and, within that, the
significant business opportunities in sectors
such as construction, infrastructure,
education, financial services, energy, food
and drink, and tourism.
The Scotch Whisky industry is a model
example that is blazing a trail to take
advantage of the growing consumer
classes in emerging high growth markets
that have a high demand for quality niche
products. The industry is entering a golden
age, with increased global demand and
international recognition.
The Scotch Whisky Association estimates
that 90% of Scotch Whisky sales are
generated through its 200 international
export markets. The increased global
presence of whisky has resulted in strong
export activity from emerging markets in
South America, Africa, Russia, China and
India. Whisky is now Scotland’s top
international export and one of our great
success stories.
Scotland is home to a wide range of
industries that are demonstrating an
impact across the globe. We need to
recognise and build on the international
achievements of key sectors such as
education and engineering. Industry
leaders Weir Group, Wood Group PSN,
Aggreko and the Clyde Group are
internationally recognised and globally
renowned for their expertise.
Scotland also hosts world class colleges
and universities with a strong global reach
attracting students to Scotland who return
to their home nations as Scottish
ambassadors. We must capitalise
collectively on these strengths and inspire
global growth within other key sectors.
To achieve economic prosperity in 2013
and beyond, businesses must adopt an
“act local, think global” mindset. With the
Commonwealth Games and Ryder Cup
taking place in 2014, we have a once in
a generation opportunity to showcase
Scotland and our business expertise on the
world stage.
Businesses must be ready to step up to
take advantage. With the right approach,
we will deliver sustainable economic
prosperity and achieve our collective
global ambitions for Scotland.
[ In 2012 we directly supported Scottish business with visits
to India, Brazil, China, the Middle East and North America ]
[ WORLD CLASS SCOTLAND Economic Development
[ SCDI
1 Cadogan Square
Cadogan Street
Glasgow
G2 7HF
Tel: 0141 222 9722
www.scdi.org.uk
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North See Oil Rig
The country of choice
David Watt, executive director,
Institute of Directors, Scotland
Companies looking to invest in jobs in the
UK are more likely to choose Scotland
than any other part of the country
Photo : Shell International Limited
David Watt, executive director, Institute of Directors, Scotland
2012 has been another
challenging year for Scottish
businesses and, despite news
that the UK enjoyed an
economic boost in the third
quarter, the Olympic lift which helped the
UK to 1% growth in GDP in the third
quarter has not trickled north of the border.
Unfortunately, Scotland seems to be
following a different cycle to the rest of
the UK and, although we are seeing signs
of improvement, there is a still a long way
to go.
In addition, one of the most important
and concerning issues facing Scotland in
2013 is the continuing rise in youth
unemployment. Recent estimates have
shown that more than 100,000 Scottish
youngsters are out of work, and with a
lack of quality training and employability
skills for many leaving schools and
universities, our workforce of the future
faces a great challenge.
On a more positive note unemployment
in Scotland fell by 19,000 to 204,000 in
the final quarter of the year - a reduction of
8.5% - and our unemployment rate is
below the 7.8% UK average.
According to a survey by Ernst and
Young, 5926 jobs were created through
overseas investment in 2011, up by 50%
on 2010 and the figures put Scotland at
the top of the jobs table for the second
year running. It is extremely encouraging
that companies looking to invest in jobs in
the UK are more likely to choose Scotland
than any other part of the country. In terms
of inward investment in 2012, Swiss
software company Avaloq showed its
confidence in Scotland and in February
opened the doors to its new development
centre in Edinburgh, which will create 500
jobs over the next four years. The number
of new firms starting up in Scotland
continues to increase, and there are now
numerous initiatives to help kick-start
business growth and stimulate investment.
Most recently came the news that the
Entrepreneurial Spark initiative is opening
in Edinburgh following its success as a
stimulating start-up incubator for
developing cooperation amongst
entrepreneurs.
Many of our business leaders have been
steering through choppy waters for some
time, they realise that strong leadership
and direction is what is required to survive
the storm. While there is still some way to
go until confidence returns, it’s important
we don’t lose sight of the fact there are
still opportunities out there. Our traditional
markets are all feeling the strain, but there
are many countries across the globe that
continue to prosper and represent an
opportunity for Scottish companies.
In a fiercely competitive global economy,
Scotland’s economic prosperity depends
on our success as an outward-looking and
enterprising nation. We need to set
ourselves ambitious targets for growth,
and the onus is on us all to show the
necessary leadership to help build a
stronger economic future for the country.
There are some areas where Scotland
is progressing and despite financial and
global challenges the country is making
significant steps forward with opportunities
to grow now and in the future.
Building on the enormous strength of the
North Sea and the reputation that
Aberdeen has developed as a world
centre for energy, Scotland is a genuine
world leader in many aspects of this
industry. Even the latest gas production
techniques in fracking have sizeable
expertise based in this country.
There is of course a link with this to the
ever-expanding renewable energy industry
and Scotland has been recognised by
many inward investors as a world player
in this aspect of energy production.
We have witnessed fantastic
developments this year, like the Waldorf
brand coming to Edinburgh, as well as
Glasgow quickly becoming one of the
UK’s leading event centres. And as
Glasgow 2014 fast approaches,
Scotland’s reputation for international
events can only grow further.
Specialist engineering, while facing
real difficulties such as the rate of Euro
exchange, is another area where Scotland
has long had some very special people
and companies, and this continues into
the 21st Century.
Add to this the reputation of our fantastic
universities and there is genuine
justification for a belief that Scotland can
survive and thrive. It is clearly not all doom
and gloom, as despite the problems for
the nation’s economy we have great
people who will ensure we will prosper
despite the challenging world in which
we operate.
[ While there is still some way to go until confidence returns, it’s important
we don’t lose sight of the fact there are still opportunities out there ]
[ WORLD CLASS SCOTLAND Economic Development
[ IOD Scotland
29 Abercromby Place
Edinburgh EH3 6QE
Tel: 0131 557 5488
Fax: 0131 557 5818
Email: iod.scotland@iod.com
www.iodscotland.com
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V & A Building, Dundee
World class cities look
forward to success
Donald Anderson, Director of PPS Scotland,
and former Council Leader of Edinburgh
How Scotland’s increasingly successful
and sustainable cities are welcoming
and nurturing investment
Donald Anderson, Director of PPS Scotland, and
former Council Leader of Edinburgh
Despite the economic woes that
have affected Scotland every
bit as much as elsewhere in
the world, Scotland’s cities are
looking forward with optimism
to 2013. Aberdeen, Dundee, Edinburgh
and Glasgow all have exciting
developments and opportunities coming
forward that will help drive growth and
wealth creation.
In Aberdeen, Scotland’s Energy Capital,
the economy has barely slowed
in the downturn. Unemployment is
extraordinarily low at little more than
2%, and the city was recently judged
Scotland’s strongest performing city by
PriceWaterhouseCoopers.
Aberdeen’s success is driven by energy,
and it has been developing new strengths
in low carbon, hydrogen and renewable
sectors. Business parks in the city are so
busy responding to enquiries that it is hard
to believe that we are in the midst of
economic stagnation, and the city’s tourism
industry is growing fast on the back of
substantial numbers of business travellers.
A £50 million fund will transform
Aberdeen, developing a superfast
broadband hub.
Dundee already boasts one of Europe’s
key hubs for the development of life
sciences, and Dundee University has
developed high profile collaborations
with Oxford and Stockholm to advance
knowledge the function of body proteins.
The city is also reinventing its waterfront
with a new flagship V&A Museum with
£1 billion of investment in more than 240
acres of land targeted for regeneration.
Dundee looks destined for bigger and
better things in 2013.
In Edinburgh, the nation’s capital, the
mood is optimistic as well. Tourism
continues to go from strength to strength,
boasting world beating occupancy levels
that will encourage more investment in
hotels and restaurants. Key sites are being
developed, with major new hotels being
built in the heart of the city in Princes Street
and at South Bridge on a site once
devastated by a fire that attracted
worldwide attention.
The city’s famous conference centre,
the Edinburgh International Conference
Centre, is being expanded to create some
of the best conference facilities in Europe.
The city’s tram project is also nearing
completion, and trams are expected to
further boost investment.
Scotland’s largest city economy is
Glasgow. A traditional industrial
powerhouse, Glasgow is evolving to
create one of the UK’s most successful and
diverse economies. 2013 is the year of
delivery as Glasgow gears up to host the
Commonwealth Games in 2014, and aims
to repeat London’s success hosting major
sporting events.
But there is more going on than that,
with Europe’s biggest hospital development
taking place at the Southern General, and
the city is leading the way in combined
heat and power with two major energyfrom-waste
projects in the pipeline.
Glasgow is also putting the finishing
touches this year to its Hydro development,
which will be a world beating music
venue.
Scotland’s stunning scenery is well
known. But Scotland’s cities are no less
stunning and have successfully created
strong, vibrant city economies. Scotland
is more, much more than its beautiful
landscape - it is a modern and vibrant
country with increasingly successful and
sustainable cities that welcome and
nurture investment.
SCOTLAND
• Has two of the UK’s strongest
performing tourism markets in
Edinburgh and Aberdeen, where
occupancy levels show scope for
much more investment.
• Is home to the UK’s second biggest
retail destination in Glasgow,
another key UK tourism destination.
• Has many leading higher
education institutions, with leading
centres in life sciences in Dundee
and Edinburgh.
• Has a highly qualified workforce,
with cities like Edinburgh, where
44% of the population is educated
to degree level, compared to the
UK average of 28%.
• Is very competitive in terms of
costs, with property costs up to
one third cheaper than London
and the South East of England.
[ Business parks in the city are so busy responding to enquiries that
it is hard to believe that we are in the midst of economic stagnation ]
[ WORLD CLASS SCOTLAND Economic Development
[ PPS Group
27 George Street
Edinburgh EH2 2PA
Tel: 0131 226 1951
www.ppsgroup.co.uk
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Listed in good company
Alasdair Northrop, Editor,
Scottish Business Insider
Across the sectors, the list of companies which
are punching above their weight in Scotland
remains impressive
Alasdair Northrop, Editor, Scottish Business Insider
The base for Scotland’s economy
has changed dramatically over
the past few decades, enabling
the country to punch above its
weight in many ways.
Undoubtedly, the biggest single boost
has come from the oil and gas bonanza in
the North Sea which now provides jobs for
thousands of people, mostly in the north
east of Scotland though other parts of the
country are also benefitting.
The importance of oil and gas is clearly
reflected in Scottish Business Insider
magazine’s listing of the Top 500
companies providing 50.8% of its total
profits and 13.6% of turnover.
Oil and gas related companies saw an
impressive 27.4% jump in profits, a 17%
increase in total turnover and a 10%
increase in employment numbers.
Some 16 of the Top 50 companies - a
list of the Top 100 is on pages 132-135 -
are oil and gas related. Most of them are
owned by UK or overseas companies with
the highly successful John Wood Group
being the biggest Scottish-owned operator
in the sector.
John Wood has operations throughout
the globe and employs nearly 28,000
people.
However we cannot ignore the many
other sectors in the Top 500 whose
combined efforts generated total profits
of £10 billion on turnover of £176.5bn.
Between them, they employ some 721,795
people.
One of the most important sectors in
Scotland remains financial services,
despite the recent global turmoil and
indeed the number one company in the
Top 500 is Standard Life.
Standard Life, which has some six
million customers around the world, made
a profit of £595 million in its latest full year
results on turnover of £9.08 billion.
Other financial service companies in the
Top 50 include Scottish Widows which is
a subsidiary of the Lloyds Banking Group,
Tesco Bank, which has its headquarters
in Edinburgh and Aberdeen Asset
Management which is a hugely successful
fund manager.
Scotland is also headquarters to two of
the UK’s biggest players in public transport
- Aberdeen-based FirstGroup and Perthbased
Stagecoach and both of them are
in the top 10 of the Top 500.
You cannot talk about Scotland without
mentioning whisky and the Top 50 includes
Scottish family-owned William Grant &
Sons, Edrington, whose brands include
Famous Grouse, and Chivas Brothers,
which is a subsidiary of French drinks
giant Pernod Ricard.
One characteristic of the owners of
many Scottish family-owned companies
is that they prefer to keep a low public
profile and a perfect example is retail
chain Farmfoods. It has enjoyed huge
success across the UK, particularly as
more shoppers become budget-conscious
in the current economic climate.
Manufacturing is also alive and well in
Scotland with one of the best examples
being Falkirk-based Alexander Dennis
which makes buses and coaches.
In this article, I have really only just
skimmed the surface of corporate Scotland
and you can find out a lot more about the
Top 500 companies and many other
aspects of Scottish business in my
magazine, Scottish Business Insider.
We have just launched a fantastic new
app which enables you to receive the
magazine digitally and to find out more
about it simply go to
http://www.business7.co.uk/insidermagazine/trialapp/
[ WORLD CLASS SCOTLAND Economic Development
[ Scottish Business Insider
Scottish Business Insider Group
One Central Quay
Glasgow
G3 8DA
www.insider.co.uk
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[
Perth, Invest in Scotland’s newest city
Beautiful Perth is proving once again that it has great
things to offer to businesses both big and small
It may be renowned for its breathtaking
scenery, rich history and agricultural
heritage but Perthshire offers cutting
edge opportunities for UK and
international businesses. It’s a place
where hugely successful international
companies such as Scottish and Southern
Energy, Stagecoach and Aviva sit side
by side with dynamic small businesses,
specialised rural industries and sole-trading
artisan craftsmen and women.
Despite the challenging economic
climate, Perthshire has continued to enjoy
much positive development across the
county.
The St John’s Shopping Centre in the
heart of Perth was recently bought over by
Universities Superannuation Scheme (USS).
USS are now moving ahead with a multimillion
pound refurbishment which will
move the centre on to two levels and
significantly increase the available retail
space. With big name retailers already
confirmed as new tenants post
refurbishment this development is sure to
attract further big names into Perth City
Centre thus further underlining Perth’s
credentials as a leading shopping
destination.
Meanwhile, just across the river,
Balhousie Care Group is building a new
facility on the site of the former Tayside
Care Home. This will be a major
development comprising two 60-bed care
homes, a training and administration
centre, assisted living units and several
residential dwellings.
This is a further development of the
company’s presence in Perth. It recently
established its new headquarters at Earn
House, within Broxden Business Park, a
seven-acre site near the M90 and the A9
which is also home to Lloyds Banking
Group and Scottish Government offices.
At the edge of Perth, local design and
build specialists Algo have recently
developed Inveralmond Business Centre
fuelled by demand following the high
occupancy of their Algo Business Centre in
Perth. The Inveralmond Business Centre
consists of 8000 square feet of office
accommodation plus 18,000 square feet
of warehousing and a 4500 square foot
dispatch warehouse.
Commercial property investment is not
restricted to the city of Perth. In rural
Perthshire, Sainsbury’s will shortly be
opening its new supermarket in Pitlochry
following the acquisition of ground on the
edge of the town. The store will have an
area of 2417 sq m (26,016 sq ft). Tesco
will shortly begin building its new store in
Crieff which will have an area of 3425 sq
m (36,866 sq ft).
Perthshire’s unrivalled accessibility is one
of the chief reasons that businesses thrive
Broxden Business Park
here. Its position at the very centre of
Scotland is ideal, with 90% of Scotland’s
population within a 90 minute drive and,
with virtually all of the major road routes
passing through Perth, nowhere in
Scotland is better connected.
Perthshire further benefits from quick and
easy access to Scotland’s major airports.
Edinburgh International Airport is just a 45
minute drive while Glasgow International is
just over an hour away. Dundee airport is
only 20 minutes away by car and offers
several flights to London every day.
Superb rail links complete the picture
with Perth occupying a key place in
Scotland’s rail network as a major junction
north of Edinburgh and Glasgow. Regular
services are available to Glasgow,
Edinburgh, London and Inverness.
Costs of office accommodation,
commercial space and business support
charges make running a business from
Perthshire very competitive. Long gone are
the days when businesses needed to locate
in a major city for success. Modern
communications mean that businesses can
now have it all - quality accommodation in
a picturesque location that can offer a
higher quality of life for their workforce.
This rapid advance of new
communications technology has opened up
an abundance of new opportunities right
across the Big County. Rural areas have
seen significant growth as entrepreneurs
take advantage of the way modern
business is conducted to move to an area
where they can achieve a high quality of
life as well as healthy profits.
In terms of digital connectivity, in late
2011 BT announced major investment in
the broadband infrastructure for Perth
and the towns of Crieff, Kinross and
Blairgowrie including the installation
of fibre networks.
Perth and Kinross Council and its
partners work hard to ensure that the
necessary infrastructure is available
through the supply of serviced land and
buildings and that the area has a well
trained and well equipped workforce
ready to meet the demands of business.
A range of accommodation is available,
varying from small commercial, industrial
and retail units suitable for start up
businesses through to larger premises for
well-established companies seeking room
for further growth.
Perth and Kinross Council also has a
dedicated business support team available
to offer help and advice to businesses.
With the sustainability of businesses being
a key Perth & Kinross Council and national
objective, the Business Growth team offers
crucial on-going support to its clients. The
team provides a high quality and clientfocused
business support service which
aims to meet the needs of businesses
with growth potential in Perth & Kinross.
As part of this on-going commitment
to supporting local business growth and
development, Perth & Kinross Council has
also introduced a number of financial
investment packages for businesses.
Details of this support can be found at
www.pkc.gov.uk or you can contact the
Business Growth team 01738 475000
or BusinessGrowth@pkc.gov.uk
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[ Perthshire’s unrivalled
accessibility is one of the chief
reasons that businesses thrive ]
[ Perth & Kinross Council
Pullar House, 35 Kinnoull Street, Perth PH1 5GD
Contact: Stuart Oliver
Inward Investment and Marketing Officer
Email: soliver@pkc.gov.uk
Tel: 01738 477959
www.investinperth.co.uk
[ WORLD CLASS SCOTLAND Economic Development
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Perth City