Publication - Strategy/plan

Scotland: a trading nation

A plan for growing Scotland's exports.

Scotland: a trading nation
4. Strategic choices 2 and 3: what and where?

4.3 Choosing the key sectors

Evidence suggests that successful exporting countries mostly specialise in a limited range of goods and services and make most of their exports earnings selling those goods and services to a limited number of countries. This pattern of trade is repeated throughout the world and Scotland is no exception with our top 5 sectors accounting for 69% of our export value. 

The analysis of sectors was carried out in a similar fashion to the country analysis but this time used 11 indicators (detail in annex 2) and a further check looking at a comparative advantage indicators. These indicators fall into a similar set of categories: 

  • Size of current market;
  • Proximity of country;
  • Growth in-market;
  • Opportunity;
  • Comparative advantage.

Carrying out the analysis using a variety of weightings to test sensitivities identified that our export strengths are food & drink; engineering services & advanced manufacturing; life & chemical sciences; technology, digital & media; financial & business services and energy

The table below provides a fuller breakdown of our exports by sector:

Sector

Share of Exports

Key Consultees (In addition to SE/SDI/HIE)

Food and Drink

19.6%

Scotland Food and Drink, Scotch Whisky Association

Engineering and Advanced Manufacturing

17.6%

Association for Consultancy and Engineering (ACE), Scottish Engineering, Aerospace, Defence, Marine and Security ILG.

Life & Chemical Sciences

14.6%

Life Sciences Scotland, Life Sciences ILG, Chemical Sciences Scotland

Energy

11.7%

Mining Institute of Scotland, Scottish 

Renewables, Oil and Gas Industry Leadership 

Group, Energy Industry Council

Technology, Digital & Media

10.3%

Technology Scotland, TIGA, ScotlandIS

Financial and Business Services

10.3%

Scottish Financial Enterprise, Association of British Insurers, Fintech Scotland

Education

2.4%

Universities Scotland, Scottish Funding Council

Tourism

1.0%

Visit Scotland, Tourism Scotland

Source: Scotland’s Export Performance Monitor

4.3.1 Sector definitions

There is a recognition that while these sectors are useful for analysis and are based on Standard Industry Classifications (SIC) they do not necessarily help businesses to understand what they actually are. We have therefore worked with stakeholders to develop more user friendly definitions, for example ‘mining and mining support’ in the Scottish context is more accurately described as ‘energy support services’. The table below sets out the sector definitions used in this report.

Sector

Includes the following sub-sectors

Engineering and Advanced Manufacturing

Metal Manufacturing

Advanced Manufacturing

Transport Equipment

Engineering Services

Other Manufacturing

Food and Drink

Food Drink

Energy

Energy Support

Mining and Utilities

Financial and Business Services

Financial Services Activities

Insurance and Pensions

Financial Support Activities

Legal and Accounting

Management Consultancy

Business Support Activities

Technology, Digital & Media

Manufacture of Computer, Electronic and Optical

Digital Industries

Publishing and Audio Visual

IT & Telecommunications

Life & Chemical Sciences

Chemical Sciences

Pharmaceuticals

Research

Manufacture of Medical Equipment

Education

Education

Tourism

Sustainable Tourism

4.3.2 Cross sectoral impacts

The traditional use of sectoral classifications also often fails to recognise the increasing tendency for businesses, and markets, to be cross-sectoral in nature. Indeed, groundbreaking innovation is often the result of the combination of two or more sectors to generate new technology, opportunities or markets. While we have relied on traditional sources of data and industry classifications which are the best sources currently available, we are well aware of the power of cross sectoral innovation and the need to enable this to happen. Indeed, we see significant opportunities for Scotland to lead in this area given the close proximity of our research institutions to businesses and to each other on a cross-sector basis and our deep and world leading expertise in several developing technologies. The opportunity to create new markets – not just to satisfy existing ones – is something we have identified as a significant future opportunity. Scotland’s universities and innovation centres will have a significant role to play in identifying and realising some of these emerging opportunities.