Profile of sector
Food and drink (incl. agri- & aquaculture)
- The sector is varied including primary agriculture, fisheries and aquaculture and food and drinks manufacturers.
- It is more reliant on exports as a share of output than the rest of the UK. According to HMRC data, exports of beverages and fish, crustaceans and molluscs are Scotland’s second and third most significant exports to the EU. The equivalent rankings for the UK are 20 and 32 respectively.
- Companies are often in rural locations and smaller in scale than the UK average, for example, just 2.9% of Scottish businesses in this sector are considered large in comparison to 5.3% in the UK.
- Scotland has a number of Protected Food Names and manufactures high quality luxury products, e.g. Scotch Whisky, Scottish Salmon. In total, global whisky exports were worth £4.3bn in 2017, with the EU accounting for over 30% of this trade. Salmon is the largest single UK food export at 8% of UK food and drink exports; in 2017, exports of salmon were worth £600m.
- This sector includes the manufacture of coke and refined petroleum products and the manufacture of chemicals and chemical products.
- It represents 7.8% of the UK GVA contribution from the chemicals sector (the Scottish economy represents around 7.7% of total UK GVA).
- It has crucial linkages to Scotland’s off-shore oil and gas industry.
- Scottish businesses are embedded in EU supply chains with intermediate products making multiple trips between other EU countries and Scotland.
- This sector includes the construction of buildings, civil engineering and specialised construction activities.
- The sector represents 7.7% of the UK GVA.
- SG evidence indicates that the sector in Scotland is largely reliant on public sector funding for construction projects. According to SG, public sector funding remains extremely important for maintaining key skills and output in the sector. The ONS does not collect data on the scale of revenue in this sector from public or private funded activities.
- This is a diverse sector that includes visual art, performance, audio-visual, books and press, heritage, digital industries and cultural education.
- In absolute numbers of businesses, software/electronic publishing companies are the biggest component of the sector in Scotland with 7,265 enterprises in 2017. The smallest is computer games with 105 companies, although it plays a key role in Scotland’s creative industries.
- The scale of this sector compared with the rest of the UK is smaller. However, companies are more dispersed across Scotland in Edinburgh, Glasgow and Dundee compared to big hubs such as London. Notably, 65.4% of exports from this industry are to the rest of the UK.
- This sector includes the extraction of crude petroleum, natural gas, low carbon and renewable energy, as well as generation and transmission.
- It is a major sector for Scotland, who are the largest petroleum producer in the EU.
- Scotland accounts for 96% of UK crude oil and natural gas liquids (NGL) production and 22.4% of employment in the UK energy sector. Unlike the rest of the UK, Scotland is a net exporter of energy.
- Scotland has particular strengths, reflecting its natural resource in renewable energy (offshore wind, wave and tidal power) compared to the rest of the UK which presents export opportunities with the growing renewables market.
- The Scottish energy sector has a greater proportion of renewable energy generated by wind turbines than the UK in aggregate.
Financial & business services/Fintech
- This sector in Scotland is focused on banking, fund management, life assurance and fintech. In particular, Scotland specialises in asset management and servicing, making it distinct from the wider UK sector.
- Edinburgh is the second largest financial centre in the UK after London and is a financial hub within Europe. Financial services in Edinburgh generates £5bn in GVA, employs 50,000 people, and accounts for 13% of all UK banking jobs.
- Scotland also has a thriving fintech ecosystem, which it is looking to significantly develop within the next two years.
- The expertise present in Scotland and talent from local universities combined with lower living costs and high quality of life provides Scotland with a unique selling point to compete with London as a base for financial companies.
- Life sciences encompasses a wide range of activities including the manufacture of pharmaceutical products and medical & dental supplies. Particular areas of expertise in Scotland include medical technology and diagnostics, and pharmaceutical services.
- It is the third most productive sector in Scotland and has been identified as a Scottish growth sector.
- Businesses in dynamic consultation suggested that Scottish life sciences businesses were typically smaller than their UK equivalents.
- The smaller scale of the sector in Scotland potentially provides an opportunity to better coordinate and commercialise the links between private and public sectors and academia.
- This sector includes transport via road, pipelines, water & air, warehousing storage and postal & courier activities. In dynamic consultation, EY engaged with organisations in road haulage, ports and airports.
- In contrast with the rest of the UK ports, the only active roll-on-roll-off (RORO) port in Scotland is Rosyth; the majority of cargo travelling through Scottish ports is via container. However, Leith, Dundee and Grangemouth have the facilities to handle a variety of RORO project cargos when required.
- Scottish logistics represent 6.7% total UK GVA contribution from the sector.
- Scottish exports include significant numbers of perishable products to the EU, a significant proportion of which is transported via the UK road network and enters the EU via the short-straits crossing in the South of England.
High value manufacturing
- This sector includes all other manufacturing such as wood, metals, rubber, plastics, transport equipment and motor vehicles. In dynamic consultation, EY engaged with manufacturers in a variety of sub-sectors including engineering, aerospace, energy, and steel.
- On the whole, the composition of the sector is similar to the UK although Scotland has lower levels of car manufacturing than the rest of the UK.
- Further, compared to the rest of the UK, a lot of companies are foreign owned and, as such, are production outposts for larger companies.