1.2 Strategic context for A Trading Nation
The importance of improving Scotland’s export performance is central to the internationalisation component of Scotland’s economic strategy and is a key element of all the strategic policy documents that consider how best to grow Scotland’s economy, both now and in the future.
Businesses that export are more innovative and more productive, delivering additional benefits to the Scottish economy.
A Trading Nation is aligned to these strategies, the National Performance Framework and to the Government’s Economic Action Plan to provide a coherent approach to direction and delivery.
Scotland’s Economic Strategy 2015 set a target of boosting exports by 50% over the period 2010 to 2017. Latest figures show Scotland’s exports grew 35% over this period. The need to accelerate export growth is a significant driver of the need for this plan and the robust evidence based approach it uses to focus resources on delivering results.
The Economic Strategy also identified a number of key sectors where Scotland has a distinct comparative advantage:
- Food & drink (including agriculture & fisheries)
- Creative industries (including digital industries)
- Sustainable tourism
- Energy (including renewables)
- Financial & business services
- Life sciences
Priority markets to grow exports from these sectors are identified in this plan.
A key element of the Scottish Government’s approach to delivering economic growth is that it should be both sustainable and inclusive. Exporting can boost productivity which allows businesses to hire more staff and create better jobs. This is particularly important in regions where we have unfulfilled economic growth potential.
Global Scotland: trade and investment strategy 2016-2021 set out Scotland’s overall approach to improving trade and investment performance. The strategy set out plans to boost Scotland’s export performance by inspiring, enabling and supporting more businesses to sell more goods and services to a wider range of international markets.
A number of the actions in that strategy are further developed here. In particular the focus on working in partnership across the public and private sector and taking a Digital First approach to helping more businesses easily access the information, advice and support they need to help them export.
The strategy also resulted in the formation of the Ministerial Trade Board which has been instrumental in contributing to the development of this plan and some of the actions within it. The doubling of SDI trade resources in Europe was announced following the strategy. The merit of this investment has been borne out by the detailed data analysis underpinning the identification of the priority markets and sectors in this plan.
Sustainable Growth Commission
In its report Scotland – the new case for optimism the Sustainable Growth Commission set out a number of ideas, measures and recommendations, including the development of an export growth strategy, to boost economic growth and improve Scotland’s public finances – both now in the aftermath of the EU referendum and in the context of independence. One of the clearest messages was that Scotland, in particular in the context of the EU referendum result, must become more, not less engaged in the global and European economy to boost growth.This aspiration is fully supported by this plan which highlights a number of EU countries as being a significant source of potential export growth across all of Scotland’s areas of export strength.
Much of the evidence underpinning the report, in particular drawing on the experience of comparator countries like Ireland and Denmark, has informed the development of this plan. We have also developed the plan in consultation with representatives of the main exporting sectors and wider business organisations.
We share the Sustainable Growth Commission’s view that we must work to increase the value of exports overall, measured both in absolute terms and as a percentage of GDP. We also recognise the importance of innovation in supporting this goal and the role that inward investment plays in attracting export orientated businesses to Scotland.
There are a number of other recommendations and measures outlined in the report that have either already been taken forward or have been adopted or developed through the actions in this plan, including:
1. The formation of a Directorate for International Trade and Investment which works closely with our Directorate for External Affairs and delivery partners to ensure an integrated approach to trade, investment and economic diplomacy;
2. The further expansion of the Scottish Government’s external network of offices providing a platform for, and a more joined up approach to, existing and new activity by the Government, partners and businesses in strategic locations;
3. Retaining the link between internationalisation and wider business support through the trade services provided by the enterprise agencies and Business Gateway to grow the number of domestic firms engaged in exporting activity;
4. Increasing spending on export support with an additional £20 million investment over the next 3 years;
5. Strengthening our trade promotion effort by using Scotland’s exports as part of our marketing effort through the development of a multi-channel business pillar of the Scotland is Now campaign;
6. Supporting the provision of international business support to Scottish based businesses with high export potential to accelerate and expand their international activity;
7. Supporting ecommerce programmes that enable Scottish exporters’ access to new customers through digital platforms;
8. A refreshed approach to the GlobalScot network and an expansion of our cadre of Trade Envoys.
Enterprise and Skills Strategic Board
The Enterprise and Skills Strategic Board(3) was formed following the conclusion of the Enterprise and Skills Review.The board, which draws its membership from the boards of the enterprise and skills agencies alongside respected and influential members of the academic and business community, has a mandate to improve the enterprise and skills system in Scotland.
The Strategic Plan, published in October 2018, set out direction for the agencies but also made recommendations to government. Exporting was one of the 4 “missions” addressed in the strategic plan and we have drawn on much of the same evidence in developing this plan.
The actions for partners outlined in the Strategic Plan are complementary to those outlined in A Trading Nation, including:
1. The creation of a ‘new national exporting service’ – providing a One Scotland approach to export delivery organisations and services, strengthening national and regional partnerships and offering enhanced digital support services;
2. Exploration of a new public/private sector partnership to provide support to scale up, and refresh, export support resources utilising the expertise and global connectivity of the business community; and
3. The development of digital, sales and international language training programmes for exporters.
We are also pleased to be delivering on a number of the recommendations for Government highlighted in the Strategic Plan including:
1. Increased ministerial visibility in existing and potential trading partner countries and fast growing priority markets through a programme of frequent international visits by the Minister for Trade, Investment and Innovation;
2. Exploring the full potential of the international dimension of colleges and universities by working closely with the education sector to make Scottish universities the destination of choice within the UK for overseas students and to skill our workforce with exporting expertise, including leadership teams within businesses with the opportunity to export;
3. Increasing the involvement of private sector expertise and world-wide resources through our refreshed approach to the GlobalScot network, the expansion of our network of Trade Envoys and business-to-business mentoring amongst experienced exporters.
The Strategic Board “export mission” “seeks to increase export growth through the number of businesses and value of exports – sustaining and growing the value of Scotland’s trade with new and emerging markets by better understanding product, services and in-country demand and increasing the number of exporters through broader and deeper reach at regional levels.(4)
Whilst this plan is supportive of the wider objective stated above, the analysis that underpins A Trading Nation has helped us to refine where the balance of our agencies and partners efforts should be focused in order to deliver the greatest returns for businesses and for Scotland’s citizens.
UK Government Export Strategy
The UK Export Strategy was published in August 2018 and broadly welcomed by Scottish Ministers. It sets out to increase UK exports as a proportion of GDP from 30 to 35% with action grouped around 4 broad themes, many of which read across to this plan:
1. Encourage and inspire businesses that can export but have not started or are just beginning, placing a particular focus on peer-to-peer learning;
2. Inform businesses by providing information, advice and practical assistance on exporting;
3. Connect UK businesses to overseas buyers, markets and each other, using DIT sector expertise and networks in the UK and overseas; and
4. Place finance at the heart of the offer.
The UK’s Export Strategy builds on the UK Industrial Strategy which was published in November 2017 and is one of the UK Government’s strategic priorities alongside trade policy. The UK Export Strategy highlights that the Department for International Trade will promote UK Industrial Strategy Sector Deals – partnerships between the UK Government and industry aimed at increasing sector productivity – through international events and overseas trade missions. The Scottish Government is fully committed to continuing to work with the UK government to ensure that Scotland’s strengths are reflected in each sector deal.
Links to related Scottish Government strategies:
Scotland’s Trade and Investment Strategy
Scotland’s Economic Action Plan
Scottish Government: International Trade Policy
Scottish Enterprise: Support for Businesses
Scottish Government: Ministerial Trade Board
Scottish Enterprise: Business Guides
Global Scotland: trade and investment strategy 2016-2021
Scottish Parliament – Report on Internationalising Scottish Business
The Cole Commission on Exports – A plan from business
Wilson Review of support for Scottish Exports
Working Collaboratively for a Better Scotland: Strategic Plan - Enterprise and Skills Board
References:
(4) Working Collaboratively for a better Scotland, October 2018, Page 35