Team Scotland's inward investment support: evaluation

1. Introduction

Scotland's Inward Investment Plan: Shaping Scotland's Economy (hereafter referred to as the IIP) defines inward investment as when a business entity from outside of Scotland (including the rest of the UK) establishes, expands, or safeguards^[1] its business operations in Scotland. The IIP sets an ambition for Scotland to be a leading destination for inward investment globally, with a key focus on enjoying not only direct impacts, but wider "spillover" benefits - those that occur within the wider Scottish economy – of inward investment activity. The delivery of the plan has been focussed on a series of actions, one of which highlights the importance of developing a robust monitoring and evaluation (M&E) framework. This summary outlines the key findings of this work.

Action to attract inward investment to Scotland is primarily undertaken for the Scottish Government by delivery partners in a "Team Scotland" approach (see figure 1). Companies are provided with assistance by delivery partners who aid companies to realise their ambitions before, during and after locating in Scotland. In collaboration with delivery partners, the Scottish Government developed an M&E framework to look at both the impact of delivery partner support and the process of the support delivered. The main outcomes of interest from the evaluation are related to additionality of support, employment in the opportunity areas^[2] outlined in the IIP, and the increased spillover benefits across the economy through supply chains and knowledge exchange.

'Impact Questions' and 'Process Questions'

A theory of change (ToC) model was developed in collaboration with delivery partners at the start of the evaluation process (see Appendix 1 of the full report), in order to articulate the purpose of this evaluation and to outline the key outcomes and impacts mentioned above. These evaluation questions are shown in table 1 below.

Table 1: Impact and process questions from the Theory of Change (ToC) model

Impact Questions

• What are the direct and indirect impacts of inward investment support on the pace / size / effectiveness of a project and job creation?
• Are businesses better off because of the support?
• What approach / combination of support add the most value for businesses?
• Do those in receipt of support differ from those without?
• What effect does support have on the wider Scottish economy?

Process Questions

• How does inward investment support affect the project cycle?
• How/why does the support make a difference to their project?
• How is support delivered and is it effective?
• How do beneficiaries interact with delivery partners and what was their experience of the support?

The evaluation approach employed a mix of research methods outlined in Table 2 below. The intended research outputs link back to the ToC model developed and seek to answer the evaluation questions above. This report and factsheet below summarises the key messages from the suite of research which are associated with the ToC model.

Table 2: Summary of research methods and intended measurable metrics.

Research Strand: 1. DP Management Information (MI) Review and Analysis

Analytical Methods:

• Descriptive Data Analysis
• Cross-sectional data analysis

Intended Research Output: Impact of support^[3] on planned jobs^[4]. Assess the link between the combination of support and investor patterns and trends.

Research Strand: 2. Business survey and economic impact assessment (EIA)

Analytical Methods:

• Online & Computer Assisted Telephone Interview (CATI) survey
• Economic Analysis

Intended Research Output: Assess the barriers to investment and the additionality of support provided. Evaluate process satisfaction, and wider "spillover" benefits of support.

Research Strand: 3. Administrative Dataset Linking

Analytical Methods:

• Linking of MI with official administrative data.

Intended Research Output: Identify performance of inward investors in receipt of support through turnover and employment. Assess the link between planned jobs and real jobs.

Research Strand: 4. Qualitative research

Analytical Methods:

• Business telephone interviews
• Case studies

Intended Research Output: In depth exploration of effects of the support on suppliers, competitors, and customers of the inward investor. Rationale for investment location decisions.

The first two research strands in table 2, and interview element of the fourth were conducted externally by the Enterprise Research Centre (ERC). Their full report and methodology are provided as supporting documents to this summary. The evaluation period covers inward investment projects into Scotland between the financial years 2018/19 and 2020/21^[5] and focuses on the companies that have been in receipt of support from delivery partners. This suite of research provides Scottish Government, Ministers, and delivery partners with a better understanding of the impact of support offered to inward investors, where this is successfully leading to increased investment and employment, and spillover effects for the Scottish economy and areas for consideration. These will serve to inform future policy decisions that will improve operational delivery pertaining to investment promotion in Scotland, help to maintain Scotland's focus on areas of competitive advantage, and maintain and enhance the attractiveness of Scotland as an investment destination.