Ministerial Trade Board minutes: June 2017

Attendees and apologies

Chair

• Keith Brown MSP, Cabinet Secretary for Economy, Jobs and Fair Work

Present

• Rachel Jones
• Linda Steedman
• Michelle Crossan-Matos
• Afzal Khushi
• Jane Richardson
• Nora Senior
• Karen Betts
• Russell Dalgleish

Apologies

• Eric Balish
• Ian Donnelly
• James Withers

Also in attendance

• Suzanne Sosna, SDI
• Prof. Ferdinand von Prondzynski, Universities Scotland
• David Lott, Universities Scotland

From Scottish Government

• Mary McAllan
• Suzanne Henderson
• Jamie McGarvey

Items and actions

1. Welcome and introductions

1.1 Mr Brown welcomed everyone to the second meeting of the Trade Board and invited members and participants to introduce themselves.

1.2 No additional items were notified to the Secretariat and the note of the first meeting of the Board was agreed by all members with all action points completed.

2. Matters arising

2.1 Arising from discussions at the previous Board meeting, members had been provided with copies of:

• Nation Brands Index Report for Scotland
• SDI developed spread-sheet as part of the Enterprise and Skills Review.
• two reports on Phase 2 of the Enterprise and Skills Review

Members had no further comment on these.

2.2 Mr Brown asked the Board to consider the use of public assets in helping to secure international trade particularly in infrastructure projects, citing Scottish Water and Caledonian MacBrayne as examples. The Board discussed the role of government to government interaction and support for companies in mitigating risk, especially for large contracts. The role of DIT and UK embassy network in helping to identify and communicate opportunities for Scotland and of UK Export Finance in funding those was also considered. RD reported that the Scottish Business Network would shortly undertake a business survey to help identify global trade opportunities.

Action : Scottish Government to bring forward a paper to the next meeting covering risk and the interaction with UK government regarding investment projects, including work being undertaken to examine how public sector expertise and assets in Scotland can be used to promote business and investment opportunities in and from overseas markets.

3. Update on key issues

3.1 An update paper had been provided to members covering:

• Brexit
• Local Export Partnerships
• HMRC Regional Trade Statistics (Q1 2017)

Mr Brown invited any observations or comment on these papers. The following points were raised in discussion:

• the increased prominence of the economy in Brexit discussions where previously it had been immigration
• the need for business to clearly communicate to the UK Government the consequences of a hard Brexit and for government to engage directly with sectors and businesses rather than just through representative organisations
• the perception of a lack of proper understanding within the UK government of the implications of withdrawing from the single market and customs union
• anecdotal evidence of UK Brexit negotiators being unprepared and concern around a continuing lack of clarity in the UK negotiating position
• the complexity and time implications involved with renegotiating over 700 trade deals presently covered by the EU

4. Enterprise & Skills Review – Phase 2

Mary McAllan gave an overview of the main findings and actions from the Phase 2 report and commented that the process was now moving to implementation. She highlighted the creation of the Strategic Board and of the enterprise support vehicle for the south of Scotland, covering two local authority areas. The latter will require legislation to establish.

Action: An update on the progress of the Review’s implementation will be brought to the next meeting of the Trade Board.

5. Meeting global opportunities and challenges : Scotland’s Universities as partners

Professor von Prondzynski spoke on behalf of Universities Scotland, outlining the number of roles universities play in supporting export activity. As well as being large exporting entities themselves, through education, intellectual property and students, they also create spin-out companies and are important contributors to inward investment propositions. In Scotland universities are often seen more as contributors to projects once deals have been agreed, rather than partners from the outset.

This was contrasted with the approach in Ireland where higher education institutions are closely aligned with government bodies and there is strong collaboration with companies. Universities in Scotland can support trade initiatives and are keen to be more involved in activity around exporting and inward investment. Their connections with overseas organisations and businesses could be more fully exploited for the benefit of the Scottish economy.

The following points were raised in discussion:

• The uncertainty created by Brexit and the potential implications for the education sector, particularly in terms of attracting students from the EU and beyond.
• Universities will often have a relationship with larger inward investor companies and can play in important role in supporting government and its agencies and partners to harness the benefits of that relationship with Scotland.
• The impact of the tightening of the rules around post study work visas and the role that businesses can potentially play in highlighting the importance of such visas. Overseas students can be valuable ambassadors for Scotland.
• The lack of language skills within companies can be a significant barrier to exporting for SMEs and this is something universities can help address.
• A digital approach to support for exporting is crucial and goes beyond simply assistance with web design. Businesses require very practical advice and support and work is being done within government to identify how business support can be simplified in a digital environment and how we build a world class digital economy. The Enterprise & Skills Review is part of this consideration.
• The need to identify pilot projects to test hypotheses on winning new trade partners in specific markets and to do this swiftly enabling us to adapt and evolve our approach more quickly.
• The need to identify the factors in Scotland’s inward investment success and to replicate it in other markets. We should celebrate these successes to build confidence in our capabilities and to shift the focus on to what works well rather than what doesn’t.

Actions: Update on Enterprise and Skills Review (see above) to include scope for Trade Board to consider any gaps in support for exporting companies.

Scottish Government to consider with Board members inviting a representative from Universities Scotland to participate in future Trade Board meetings.

6. Capturing the real life challenge of international trade

Russell Dalgleish introduced this item on the ‘real life’ experience of international trade in the SME sector. Small businesses rarely make a strategic decision to export but rather it is often the result of an unsolicited enquiry. RD invited the Board to consider the following points:

• The biggest obstacle to exporting for SMEs is fear – of the unknown, of unpaid invoices, of losing money. How can companies be supported in a very practical way to address the problems and questions they might encounter?
• One way to inform and educate SMEs in this area could be by instructional ‘how to’ video featuring Scots companies who have made the same journey. The enterprise agencies can enable and contribute to such an initiative but the private sector can take the lead in delivering it.
• The need to better align the support offered by public sector agencies and trade bodies. Again the Enterprise & Skills Review is addressing this point and the new Strategic Board will have an important role to play but this type of service might be a business opportunity for the private sector to deliver.
• The potential for the newly established Scotland House in London to act as a springboard for companies looking to do business in London and beyond was highlighted noting that there have already been more than 900 expressions of interest from businesses.
• Language skills are again a factor and the lack of them is contributing to the fear of exporting for companies. Which languages are taught and how requires further consideration.

The Cabinet Secretary brought the discussion to a close but noted that the next meeting should revisit this item.

Action: Secretariat to reinstate this item on the agenda for the next meeting to allow continued discussion.

7. AOB

7.1 No other business was raised.

8. Next Meeting

8.1 The Chair indicated that the Secretariat would seek a suitable date for the next meeting and invited members to suggest matters they would like to discuss at the next meeting.

Actions: Secretariat to correspond with Board members to agree a suitable date for the next meeting and to produce agenda for the next meeting incorporating any topics suggested by members.

Secretariat to consider feasibility of holding the next meeting in Scotland House in London.