Shaping Scotland's economy: inward investment plan

1 Ministerial Foreword

We are in the midst of the Fourth Industrial Revolution.^[1] The widespread and large scale use of data and the advent of artificial intelligence is disrupting and redefining business sectors as we know them. The global challenges posed by the climate emergency and an ageing population are driving significant changes to many aspect of our lives and our economy.

The economic impacts of Covid-19 continue to unfold. The pandemic is predicted to have a major impact on global flows of Inward Investment. Meanwhile Brexit, global trade disputes and a shift towards more protectionist policies, are driving a slowdown in global investment.^[2]

These trends present great challenges but also great opportunities.

Scotland is a dynamic, open nation with an outward facing economy. We are well positioned to tackle many of these challenges. Sitting at the nexus of European and US markets we have genuine global strengths across many sectors, often built upon the excellence of our academic institutions working hand in hand with Scotland’s innovative businesses and leveraging our considerable natural and human resources.

Inward investment makes a significantly disproportionate and positive contribution to Scotland’s economy. It also complements our existing industrial base. Global exposure spurs innovation and improves productivity. Domestic businesses can learn new ways of operating. Managed well, this brings opportunities across Scottish supply chains and ensures our skills system and management match global standards. It allows us to leverage our key sectors and technologies and to build internationally competitive businesses across Scotland equipped to tackle global challenges.

Attracting businesses to invest in Scotland has a critical role to play in shaping Scotland’s economy of the future and positioning us to survive and thrive in this changing global environment. We regard inward investment as a means to an end and not an end in itself. The long term strength and sustainability of our economy will come through building on the talents of our people, the excellence and deep knowledge base of our academic institutions and the entrepreneurial spirit of our businesses to build world-leading capability in the key technologies of the future. Investment is a key component in building this strength, and inward investment has the added advantage of bringing in not only funding but also providing access to global networks, markets, technology and talent.

Scotland is a dynamic, open nation with an outward facing economy

Scotland has been the top performing nation or region of the UK, outside London, in attracting inward investment for each of the past seven years. We have the opportunity to be the investment destination of choice for many of the key technologies of the future. But to deliver that ambition – and to maximise the significant additional benefits that inward investment can bring to Scotland’s wider economy - we need clarity on why and where we focus; aligning our economic ecosystem on making that happen. This plan delivers that clarity.

Values are important to Scotland, and they have never been more important to global businesses. Our values centre around a net zero economy with the principles of fair work and sustainable, inclusive growth at its heart.

Scotland, along with a number of other countries, was already challenging the accepted wisdom of what “good” economic growth looks like, recognising the need to go beyond GDP towards a more sustainable and inclusive definition of economic success. Covid-19 has brought into sharp focus the close relationship between health, wellbeing and the economy. It has exposed those jobs and industries within our society that are most vulnerable to economic shocks and has accelerated the need to transition to a wellbeing economy, highlighting in particular the imperative to upskill and re-skill our people to fulfil the roles of the future. This plan addresses these challenges.

Scotland is well placed to support global businesses to achieve their future ambitions where there is strong alignment with the technologically enabled, net zero, inclusive wellbeing economy we are seeking to create.

Scotland is well placed to support global businesses to achieve their future ambitions where there is strong alignment with the technologically enabled, net zero, inclusive wellbeing economy we are seeking to create

This plan sets out the approach we will take to target inward investment that aligns with our values and our strengths. It identifies the sectors, and regions, where Scotland has truly world-class capabilities and how we can maximise that potential. It is co-produced, with input from a wide range of partners across the economy. It is evidence led, making best use of all available data to clearly identify where we should focus our efforts to build a technologically enabled, net zero economy with the principles of fair work and sustainable, inclusive growth at its heart.

In May of last year we published A Trading Nation – our plan to grow Scotland’s exports. This Inward Investment Plan complements that work, and it lays the groundwork for our Capital Investment Plan which will follow it. All three pillars will be framed by our Trade Principles Paper which will highlight the importance of protecting our key values of how we trade as much as what we trade, while identifying the key levers we can use to build a fairer Scotland. Together they provide a comprehensive evidence-led suite of policies and actions to target and deliver our ambitions to further strengthen and internationalise Scotland’s economy.

Building Scotland’s future today.