Shaping Scotland's Economy - Inward Investment Plan: progress report 2022

Section 2: Shaping Scotland’s Economy: Inward Investment Plan – Recap of Strategic Direction

Our New Strategic Direction

The Inward Investment Plan sets out a shift towards a more strategic focus, working with target investors and projects in nine opportunity areas, where the evidence shows Scotland has a competitive and comparative advantage that is aligned with global demand. It moves the focus of the Scottish Government and its agencies beyond the creation of new projects and jobs alone, towards realising the wider ‘spillover’ benefits that an inward investment project can deliver, such as local supply chain benefits, spending on Research and Development (R&D) and regional impact.

The shift in our approach and what we are doing differently, can be summarised as below:

From:

• Largely opportunistic focus
• ‘Trawl’ for investors and projects
• Largely sector-agnostic
• Focus on project and jobs
• Values not driving our offer
• Regions working in silos
• Little focus on cluster building
• Inward investment policy developed in isolation

To:

• More strategic focus
• ‘Target’ investors and projects
• Focus on strategic sectors
• Maximise overall economic impact
• Values central to offer
• Aligned with regional strengths
• Cluster building focus
• Alignment of wider policy agenda

Values-Led Proposition

Scotland has a great tradition of enterprise and a business culture rooted in the values of fair work, net zero and inclusive prosperity. Companies increasingly position values at the heart of their businesses, focussing on the wider benefits they contribute to society, beyond the generation of profits. The Inward Investment Plan sets out how values are central to our offer, with our ambitions for a wellbeing economy at the heart of attracting new investment opportunities.

Where Scotland’s Competitive and Comparative Advantage meets Global Demand

With a clear, evidence-based approach, the Inward Investment Plan focuses on those sectors and opportunities where Scotland can demonstrate an international competitive and comparative advantage intersecting with future global investment flows. These sectors and opportunities have the greatest potential to maximise the delivery of spillover impacts that benefit the wider Scottish economy.

The nine opportunity areas identified in the Plan are energy transition, decarbonisation of transport, software and IT, digital financial services, digital business services, space, healthtech, transformation of chemical industries and food and drink innovation. They can be broadly grouped into three overarching priority areas of net zero, digital and high-value manufacturing.

The nine opportunity areas where Scotland’s strengths meet global demand

Net Zero

• Energy Transition
• Decarbonisation of Transport

Digital

• Software & IT
• Digital financial services
• Digital business services

High-Value Manufacturing

• Space
• Transformation of chemical industries
• Healthtech
• Food & Drink innovation

Values-led pivot to create an inclusive, sustainable wellbeing economy

Delivering Wider Economic Benefits Across Scotland’s Regions

Central to the Inward Investment Plan’s values-led approach is a commitment to ensuring all of Scotland’s regions are able to share in economic success as a result of inward investment. Scotland’s regions have distinctive assets that can attract different types of inward investment. In the Inward Investment Plan, we set out a commitment to working with regional partners to draw on and promote these strengths on a global stage, combining this with the strong messaging of ‘Scotland as the investible proposition’ at a national level.

A Team Scotland Approach to Attracting and Delivering Inward Investment

Attracting investment is a globally competitive business. Scotland benefits from a considerable international network that plays a pivotal role in promoting, supporting and amplifying our inward investment proposition to a global audience.

To deliver our message, identify and land leading inward investors, we are mobilising the whole of our international network, including Scottish Government offices overseas, the global field team of Scottish Development International (SDI), the international trade and investment arm of Scottish Enterprise, our universities and alumni, industry associations and trade bodies, our GlobalScots and Trade and Investment Envoys.

Under our unique ‘Team Scotland’ approach, the Scottish Government, with its partners, has been promoting and showcasing Scotland’s world-leading capabilities, assets and strengths on the international stage at events such as Dubai Expo 2020, COP26 and the World Forum for FDI.

Scotland’s Inward Investment Performance

The annual inward investment results of Scotland’s Enterprise Agencies, Scottish Development International (SDI), the international arm of Scottish Enterprise, Highlands and Islands Enterprise (HIE) and South of Scotland Enterprise (SOSE), show that 7,780 direct jobs were created or safeguarded through inward investment in 2021-22, of which 7,641 (98 per cent) are real living wage jobs, paying an annual salary of at least £19,305 based on a 37.5 hour week.

There were 113 inward investment projects in the year, with 39 new investors choosing to locate in Scotland. The predominant sectors for inward investment were: energy transition and software and IT. More than 90 per cent of the inward investment results are in the nine opportunity areas identified in the Inward Investment Plan.