Global Scotland: trade and investment strategy 2016-2021

Chapter 1: Introduction

Scotland’s Economic Strategy is focused on the twin goals of improving competitiveness and reducing inequality and on four priority areas for action which underpin those goals – investment; innovation; inclusive growth and internationalisation. Trade and investment has a critical role in delivering those goals and supports - and is supported by – the priority areas for action.

Scotland’s International Trade and Investment Strategy 2011-2015 ^[1] set a clear path for increasing trade, attracting inward investment and promoting Scotland as an attractive place to do business and invest, learn, live and work. Despite global economic challenges and uncertainty, Scotland has made significant progress towards those objectives. Over the last 5 years Scotland’s international exports have increased by 17.3% - from £23.4 billion in 2010 to £27.5 billion in 2014. ^[2] Meanwhile, Scotland has continued to be the most attractive place in the UK outside London for inward investment and events such as the Commonwealth Games and Ryder Cup have put Scotland firmly on the global map.

Trade, Investment and Internationalisation

As set out in Scotland’s International Framework ^[3] our approach to trade and investment is underpinned by a much broader agenda for internationalisation which seeks to:

• Create an environment within Scotland that supports a better understanding of international opportunities and a greater appetite and ability to seize them; and
• Influence the world around us on the issues that matter most in helping Scotland flourish.

So, as well as practical policies and actions aimed directly at inspiring, enabling and supporting Scotland’s businesses to trade internationally and individuals, businesses and institutions to invest in Scotland, action is also required to promote and support a more global mindset and outlook and to raise the international curiosity, confidence and ambition of individuals and businesses. Equally, influencing the world around us requires a strong and positive global reputation and profile as well as effective international relationships, engagement and networks.

Organisations across the public and private sectors and Scotland’s universities with their strong international connections and students and staff across the world, all have a contribution to make. For its part, the Scottish Government has a vital role in embedding internationalisation across a wide range of policies such as education, culture and connectivity; and in representing Scotland’s interests and priorities on the global stage. Meanwhile, Scottish Development International, supported by Scottish Enterprise and Highlands and Islands Enterprise, has a key role in helping businesses raise their international ambition and recognise and realise global opportunities.

Our Ambition

Our dual ambition for trade and investment is to support sustainable business growth, and associated jobs and incomes across Scotland, through:

• more businesses selling more goods and services to a wider range of international markets; and
• attracting significant inward, capital and risk investment.

This recognises the continued importance of international trade to long term economic growth and the key challenges that need to be overcome to boost Scotland’s export performance. Moreover, whilst retaining a strong focus on attracting inward investment, it also identifies the importance of attracting capital investment to support large scale projects; and risk investment to helping Scottish companies achieve their growth potential.

One Scotland

Scottish Development International ( SDI) brings together the Scottish Government, Scottish Enterprise and Highlands and Islands Enterprise to reflect the international ambitions of every part of Scotland. It is the lead body for driving forward our ambition and international trade and investment support in Scotland. However, many other organisations, public, academic and private, also make an important contribution. In addition, there is growing evidence of organisations, businesses and individuals working together to realise international opportunities and of a willingness and appetite to share knowledge, experience and networks. We want all those contributions and that supportive ethos to thrive.

Organisations such as Connected Scotland have led the way in bringing universities and other bodies together to deliver shared international goals. Scotland Food and Drink has performed a similar role for the food and drink sector and the Scotch Whisky Association has decades of experience of doing likewise for the whisky industry. Meanwhile, at the local level, groups such as the North East Scotland Trade Group and Scottish Borders Exporters Association support effective collaboration across the public and private sectors.

We want to create a system and a culture where that kind of One Scotland, collaborative approach is the default setting across the public, private and academic sectors and among individuals and businesses, for how we use our combined resources, expertise and networks to collectively achieve our ambition. This includes ensuring that policies and activities across the Scottish Government in areas like education, transport and culture support our ambition and wider internationalisation agenda.

Innovation and Investment Hubs

Our Innovation and Investment Hubs in London, Dublin and Brussels will encapsulate this One Scotland approach and play a key role in delivering our trade and investment ambition. They will provide a platform for businesses and academia to access trade and investment opportunities and for attracting inward investment and significant capital investment to Scotland and will be at the forefront of our broader approach to internationalisation and Supporting Global Scotland. In particular, the Hubs will play a key role in enhancing Scotland’s profile and reputation and a focal point of exercising influence and developing networks and relationships. They will also demonstrate how we can make the most of our combined One Scotland footprint in particular locations.

Supported by £3.5m of Scottish Government funding in 2016-17:

• The London Hub will bring together the Scottish Government, its enterprise agencies and VisitScotland under one roof to provide a single door approach to Scotland. It will also provide physical space for businesses and academia to work from and host meetings and support them in accessing international markets and investors and showcase their products and services. Furthermore, the Hub will support inter-governmental engagement with the UK Government and the broader international governmental and institutional community in London around trade and investment, economic and other issues.
• The Dublin Hub will support Scottish businesses to access the Irish market - Scotland’s 6th largest export market with exports of over £1.1 billion in 2014. It will also provide a mechanism for engaging with the Irish Government and associated networks and for developing joint trade work and collaborative research in areas of common interest such as food and drink, golf and sailing tourism and renewable energy.
• The Brussels Hub will support work to engage with and influence EU institutions across a range of issues including the effectiveness and further development of the Single Market and wider trade policy. It will also bring together partners to support businesses and academia and use Scotland’s track record in leveraging investment to access various EU funding mechanisms such as the European Fund for Strategic Investments which supports strategic public and private investments in key areas such as infrastructure, education, research and innovation, as well as risk finance for small businesses.

Delivery

Our eight point action plan for trade and investment is:

1. A One Scotland approach, in Scotland and internationally, to deliver success - working collectively and collaboratively to achieve our ambition.

2. Building Scotland’s profile and reputation as a connected, innovative and inclusive nation including the development of a clear identity and messaging for use across all the international activities of the Scottish Government and its agencies and by organisations receiving Government funding.

3. A Digital First approach to information, advice and support – helping more Scottish companies sell more products and services in more markets.

4. Action to help business play its part in promoting and respecting human rights; to support development through trade; and to internationalise Scotland’s world leading approach to social enterprise.

5. £3.5m in 2016-17 to support Innovation and Investment Hubs in London, Dublin and Brussels – helping Scottish companies and academia access markets and investors and providing a platform for attracting inward and capital investment.

6. A long term plan to build Scotland as a global innovation centre to attract new forms of investment - using our assets and capabilities to collaborate to provide solutions to global challenges.

7. Close engagement with existing investors to help them develop, grow and expand - encouraging them to make the Scottish Business Pledge, pay the Living Wage and, where appropriate, become an accredited Living Wage Employer.

8. A strategic approach across Government and partners to attract international capital investment to large scale projects and companies.

A more detailed Delivery Plan is set out in Annex A.

Evidence and Engagement

The Strategy is informed by our Economic Evidence Discussion Paper[4]; by the most recent (Jan. 2016) Scottish Export Statistics ^[5] ; by consultation and engagement with a wide range of public and private sector organisations and representative bodies; by discussions with a number of GlobalScots with particular sector and market expertise; and by a Partnership Group of public and private sector interests established to oversee the development of the Strategy. It also takes into account the findings and recommendations of the Scottish Parliament’s Economy, Energy and Tourism Committee’s Inquiry into Internationalising Scottish Business[6] and the Cole Commission ^[7] ; and incorporates the Joint Action Plan ^[8] arising from the Wilson Review of Support for Scottish Exporting.