National Economic Forum: March 2022

Host:  Ivan McKee – Minister for Business, Trade, Tourism & Enterprise

Facilitator: Maggie McGinlay, Chief Executive of ETZ Ltd

Scribe: Sarah Crompton-Donnelly, Capital Investment Policy, Directorate for International Trade and Investment

Summary

The delegates discussed where they saw Scotland’s key global strengths and areas for potential investment, as well as how these areas could be better supported by the Scottish Government. Delegates highlighted sectors such as green energy, life sciences, food and drink and creative industries. They also discussed how public sector funds could be best spent in order to encourage private capital investment, with delegates noting that they felt spending should be directed towards improving infrastructure and better marketing Scotland’s existing opportunities.

Introduction and background

Ivan McKee outlined the key questions to be covered:

• Scotland will not be able to lead in everything in this transition so where will we focus? Where are Scotland’s genuine global strengths?
• Government will not do this alone. What roles can government and industry take up together?
• How should we deploy public sector funds to best lever in private capital investment? What market making solutions should government consider?
• How can we harness Scotland’s just transition to net zero to create new good jobs across Scotland? What role does industry play in this?

Topics discussed:

Where do you see Scotland’s genuine global strengths, either now or as emerging opportunities for development? Also, where are opportunities to combine some of our strengths?

Key points in discussion:

- While discussions about economic strategy cater well to industries that create physical products, the creative industries are sometimes left behind, and topics such as creative IP rights, for example for gaming companies, are not as well understood as they could be.

- Scotland is a step ahead of many other countries in terms of tackling the complexities involved in making a Just Transition. Can Scotland leverage its first mover advantage and offer itself as a partner for other countries facing this challenge?

- From a life science perspective, our strengths are in health data and connectivity, with huge potential for investment in personalised medicine. The potential for companies to come and do clinical trials here is very strong.

- Scotland’s off-shore wind potential is very high, and we should work to redeploy our expertise in traditional off-shore energy production to off-shore wind. There is also huge potential here to manufacture and maintain off-shore wind structures and sub-structures.

- We should also be aware of energy production not only as an end in its own right, but also as an enabler, and consider which energy intensive industries could come and locate themselves in Scotland if enough clean energy is being produced.

- Our universities are strong centres of R&D, and we can be doing more to attract R&D investment from international corporations.

- Our natural environment is a huge asset in terms of food production and tourism, and we must ensure that in delivering NSET, we work to protect our natural environment against the twin crises of climate change and biodiversity loss.

- There is potential to transition our existing skills in petrochemical manufacturing into a new phase of creating bio-based materials, as the world works to move away from carbon based plastic.

• What do industry/ business need to do more of to deliver on the ambition in NSET? Following on from this, what does government need to do more of, and how can we work together?

Key points in discussion:

- The business community needs to work on emphasising its strengths on the international stage. For example, in the salmon fishing industry, we cannot compete on bulk of product with places such as Norway, however we can market ourselves better as being at the premium end of the market. The government also need to work to make it as easy as possible for industries here to compete with international competitors.

- Supply chains are becoming a massive issue in the manufacturing sector; for example the shortage of microchips. Companies are unable to hit targets because of lack of supply, so this issue needs to be solved quickly.

- Promotion of investment opportunities in Scotland overseas has not been sufficiently specific, and concrete investable opportunities have not been part of the agenda. It was felt that generic messaging is not useful for companies seeking international investment.

- The importance of evidence base to inform decisions was highlighted but sic codes for example used by Scottish Government are not necessarily helpful for companies especially in creative industries

• What would you specifically like The Scottish Government to do?

Key points in discussion:

- Wi-Fi connectivity could be strengthened throughout some regions in Scotland, to ensure high levels of access throughout the whole country.

- In industries where first mover advantage is very important, for example off-shore wind, the Scottish Government could help companies move more quickly through the approvals process.

- The Scottish Government could help to de-risk investing in off-shore energy by investing in plugging the evidence gaps surrounding the sector.

- The Scottish Government can work to support and coordinate the development of cluster-building for key sectors.

- The Scottish Government can invest in ensuring that we are attracting strong legal expertise to ensure that we are negotiating fairly and effectively with investors, and getting a fair deal in exchange for investment.

• How should we deploy public sector funds to best lever private capital investment?

- It was suggested that a small percentage of SNIB’s funding could be spent promoting Scotland on the world stage, and increasing presence at international events.

- It was suggested that SG works to capture Scotland’s own investment power, by gaining a deeper understanding of our own endemic investment community.

- Investment in infrastructure such as roads, Wi-Fi connectivity and ports were suggested.

- Investment in education and skills development, from schools through to university, would provide companies with the workforce they need to succeed.

Closing Comments

Ivan McKee:

Ivan McKee emphasised that collaboration between government and the private sector is very important, and that Scotland performs well in this sense, especially compared to other countries. The Industry Leadership Groups are a good example of this collaboration. He also mentioned that we are connected in a way that most countries are not, with government, businesses, NHS and educational institutions all interconnected, and international investors recognise this as a positive.

Action points to take forward include working together to collect the statistics that the business community would find useful, and to consider how we can do more to support both physical and digital infrastructure, in line with NSET.