Rural Scotland Business Panel Survey

8. Markets

Key findings

Over three quarters (79%) of businesses were importers, sourcing goods from either the rest of UK (75%) or outside the UK (35%). Around half (52% were exporters), selling to the rest of the UK (50%) or outside the UK (24%).

Almost all (98%) businesses were taking, or planning, action in relation to their markets. Most businesses (95%) were either maintaining their existing markets (87%) or expanding into new market (31%), while 11% were concentrating on fewer markets.

The most important actions for helping businesses achieve their market plans were: adapting their product or service (49%), investing in technology (41%), up-skilling or re-skilling staff (40%), collaborating (39%) and bringing in external advice and support (36%).

Around three quarters (77%) of businesses were taking actions relating to their supply chains and around half (51%) were taking actions specifically in response to supply chain challenges. The most common actions being taken were using more locally sourced supplies (48%) and using more supplies from inside the UK (47%).

Import markets

Over three quarters (79%) of businesses were importers, sourcing goods from either the rest of UK (75%) or outside the UK (35%). The majority of businesses sourced goods and materials from Scotland (88%) (Figure 8.1).

Variation in import markets

Businesses in the South of Scotland (82%) were more likely than those in the Highlands and Islands (76%) and the rest of rural Scotland (74%) to source goods from the rest of the UK.

Businesses more likely than average to source from Scotland were: food and drink (96%), tourism (92%) and remote rural businesses (92%).

Those more likely to source from both markets outside of Scotland included: large businesses (25+ staff) (88% from rest of UK, 82% from outside the UK) and businesses striving for growth (81% and 41%).

Export markets

Almost all businesses (96%) sold goods or services within Scotland, with 47% selling only within Scotland. Around half (52%) of businesses were exporters, selling to the rest of the UK (50%) and outside the UK (24%) (Figure 8.2).

Variation in export markets

Highlands and Islands businesses were more likely to export outside the UK (31%, compared with 16% in South of Scotland, and 22% in rest of rural Scotland). South of Scotland businesses were more likely to sell to the rest of UK (64%, compared with 50% in the Highlands and Islands and 47% in rest of rural Scotland).

Certain types of business were more likely than average to sell to both markets outside of Scotland:

• Tourism – 58% to rest of UK and 44% to outside the UK.
• Creative industries – 72% and 40%.
• Financial and business services – 70% and 31%.
• Large businesses (25+ staff) – 70% and 51%.
• Businesses striving for growth – 56% and 29%.

Market activity

Almost all (98%) businesses were taking, or planning, action in relation to their markets. Most businesses (95%) were either maintaining their existing markets (87%) or expanding into new markets (31%), while 11% were concentrating on fewer markets.

Around half of businesses (51%) were responding to supply chain challenges, and a quarter (23%) were responding to changes in import arrangements^[11] (Figure 8.3).

Variation in market plans

Responding to supply chain challenges was more common among businesses in the Highlands and Islands (55%) and the South of Scotland (56%) than in the rest of rural Scotland (49%).

Certain types of businesses were more likely to be taking, or planning, these actions:

• Food and drink – responding to supply chain challenges (60%) and changes to import arrangements (27%).
• Tourism – responding to supply chain challenges (58%).
• Creative industries – expanding into new markets (41%).
• Those operating above pre-pandemic levels and those striving for growth – expanding into new markets (43% and 58% respectively).
• Those operating below pre-pandemic levels and those aiming to downsize – focusing on fewer markets (13% and 25%).
• Those importing from outside the UK – responding to supply chain challenges (65%), responding to changes to import arrangements (44%) and expanding into new markets (44%).
• Those exporting outside the UK – expanding into new markets (48%).

Supporting marketing activity

The most important actions for helping businesses achieve their market plans were: adapting their product or service (49%), investing in technology (41%), up-skilling or re-skilling existing staff (40%), collaborating (39%) and bringing in external advice and support (36%) (Figure 8.4).

Variation in actions

Those that were expanding into new markets (in Figure 8.3) were more likely to say that the following actions were important: adapting their product or service (67% said this was important), re-skilling or up-skilling staff (56%), investing in technology (56%), investing in research and development (38%) and recruiting staff with new or different skills (34%).

Actions that were higher than average among certain sectors were:

• Food and drink – bringing in external advice and support (47%), and investing in research and development (32%).
• Tourism – adapting product or service (58%), re-skilling or up-skilling staff (46%), and recruiting staff with new or different skills (28%).
• Financial and business services – investing in technology (47%), and collaborating (46%).
• Creative industries – adapting product or service (57%), collaborating (48%), and investing in research and development (33%).

There was further variation among:

• Large businesses (25+ staff) – re-skilling or up-skilling staff (64%), investing in technology (58%), recruiting staff (43%), and investing in research and development (34%).
• Those importing from outside the UK – adapting product or service (57%), collaborating (43%), and investing in research and development (32%).
• Those exporting outside the UK – collaborating (47%), investing in technology (46%), investing in research and development (32%), and recruiting staff (26%).
• Business operating above pre-pandemic levels – using less or greener forms of transport (29%) and stockpiling (25%.

Those striving for growth were more likely to be taking each action (see Appendix A).

Supply chain actions

Around three quarters (77%) of businesses were taking action relating to their supply chains. The most common actions were using more locally sourced supplies (48%) and more supplies from inside the UK (47%) (Figure 8.5).

Variation in actions

Businesses in the Highlands and Islands (82%) and the South of Scotland (80%) were more likely than those in the rest of rural Scotland (75%) to be taking actions in relation to their supply chain.

Each action was more common among those that were responding to supply chain challenges (in Figure 8.3), including:

• using more supplies from inside the UK (62%),
• using more locally sourced supplies (55%),
• moving to greener supply chains (33%),
• using less or greener forms of transport (29%),
• reviewing routes to market (32%) and distribution networks (24%), and
• stockpiling (24%).

Certain actions were more common among:

• Food and drink – reviewing their routes to market (28%) and distribution network (21%).
• Tourism – using more locally sourced supplies (62%) and more suppliers from inside the UK (54%).
• Remote rural businesses – using more locally sourced supplies (54%) and stockpiling goods (21%).
• Large businesses (25+ staff) – using less or greener forms of transport (32%), reviewing routes to market (32%) and distribution network (26%) and stockpiling goods (26%).
• Those importing from outside the UK – using more suppliers from the UK (51%), using less or greener forms of transport (26%), moving to greener supply chains (28%), reviewing routes to the market (28%), reviewing distribution network (20%) and stockpiling goods (23%).
• Those exporting outside the UK – using less or greener forms of transport (27%), reviewing routes to the market (28%), and reviewing their distribution network (21%).