Shaping Scotland's economy: inward investment plan

4 How Attractive Is Scotland To Inward Investors?

In this section we consider those factors important to inward investors, before we turn our lens to Scotland’s current strengths and then, in Sections 7 and 8, consider the future policy actions we will take to support both inward investment projects and the investment ecosystem.

4.1 What Are Inward Investors Looking For?

To understand how Scotland can best position itself to maximise the wider benefits of inward investment it is important to first consider the motivations of inward investors and what they seek to gain from their investments. Broadly speaking, inward investors tend to seek one or more of three things when they decide to invest internationally. Those three objectives can be categorised as: market seeking, where the investor looks to secure access to new markets for their products or services as a consequence of having a base inside a customs area; efficiency seeking, where the investor seeks to lower the costs of production compared to their existing operations; and resource seeking, where the investor is focussed on securing easier access to human or natural resources, supply chains or innovation clusters (‘intellectual’ resources). In many cases of course investors will seek a combination of all three but this analysis does help to identify the primary drivers of investment decisions.^[25]

Source: Dunning, J. H. (1993). Multinational enterprises and the global economy. Reading, MA: Addison Wesley.

Over the past two decades, Scotland has attracted investment in all three categories and in many cases investors seek a combination of all three drivers. Understanding the drivers of investment decisions is therefore important. In some cases investors were looking for access to Scottish, UK or EU markets and in other cases Scotland was able to provide investors with a lower cost option compared to their current operations. In global terms having reduced access to the EU market will restrict the attractiveness of market seeking investments and while Scotland has some cost advantages over for example London or the South East on a global scale positioning ourselves as a low cost option does not align with our aspirations for Scotland as a high wage, high productivity economy.

It is for resource seeking investments that Scotland is best able to compete and where we should primarily focus our efforts. This can be for access to natural resources or location (in the case for example of renewable energy, food and drink or the space sector), for access to research and innovation (for example in health and life sciences) or for access to skills and talent across a wide range of sectors. Targeting resource seeking investment also makes this investment significantly more likely to stay in Scotland and build capacity over the long term. Investment that is focussed on efficiency seeking is more mobile and susceptible to being moved to lower cost locations in the medium to longer term.

4.2 What do Inward Investors Expect from Government?

When an inward investor assesses future location choices, the company looks to government for policy support in the following areas. Investment criteria tend to fall broadly into four categories: skills; business environment; infrastructure; and quality of life or living.^[26]

Source: EY UK Attractiveness Survey 2020

Investors have provided a clear steer as to their priorities for government policy, specifically around the business environment (liquidity, availability of capital), the skills of the workforce, the reliability of the infrastructure and quality of life. All are key factors identified in securing inward investment. While this survey is at a UK level, the same requirements of government also apply in a Scottish or national/regional context. An approach based on the strength of talent and infrastructure, and availability of business partners and supply chains, should therefore have benefits for all of Scotland.

Source: EY UK Attractiveness Survey 2019

An approach based on the strength of talent and infrastructure, and availability of business partners and supply chains, should therefore have benefits for all of Scotland

4.3 How Does Scotland Compare Internationally?

Attracting inward investment is competitive, and increasingly so with more nations and regions chasing fewer investments. To succeed in this market, we have to understand and leverage our strengths.

We know that inward investors tend to seek either one or a combination of three drivers when they decide to invest internationally. In Scotland we will be focussing our efforts on resource seeking investments as this is where we are best able to compete and also makes investment significantly more likely to stay in Scotland and build capacity and capability over the longer term.

Here we consider criteria inward investors consider to be desirable when considering where to invest. The bar chart below highlights how Scotland compares with competitor countries and cities^[27] across the four key investment criteria identified: skills; business environment; infrastructure; and living. Scotland performs in the bottom 30% on only one of 14 indicators below: Freight Transport.^[28]

Source: Office of the Chief Economic Adviser Analysis using data from multiple sources. Please see the technical methodology note for more information.

This is also broadly aligned to the four capitals lens through which the AGER report viewed Scotland’s economy: Business (financial and physical capital), Environment (natural capital), People (human capital), and Community (social capital). We now consider each of these areas in turn, identifying Scotland’s inherent strengths in each.

4.4 Scotland’s Strengths: Skills

The key factors considered under this heading are higher education and our universities, both areas where Scotland scored highly in international comparisons.

Scotland is ranked first out of 36 OECD countries in terms of high-level qualifications and has schools, colleges and universities that deliver high-quality education to learners at all levels. Feedback from investors reinforces that Scotland’s people and skills are key factors in investment decisions.

Scotland has a vibrant network of regional colleges that provide further and higher education and vocational qualifications to almost 120,000 young people with 95% of college qualifiers entering positive destinations. In fact, a quarter of all higher education in Scotland is delivered by colleges. Colleges and industry have close links at local level and within industry sectors. The Energy Skills Partnership, for example, supports colleges in curriculum development and delivery in new and emerging technologies in areas such as low carbon transport, energy efficiency and advanced manufacturing by ensuring that colleges deliver the skills for a green economy.

We are moving into a fourth industrial revolution, driven by technological disrupters and responding to unforeseen impacts of Covid-19. To ensure we thrive as individuals, businesses and as an economy we must also ensure the knowledge gained is supported by the development and application of new skills. Scotland has developed an agile, innovative template for meeting key skills demands, upskilling and reskilling its talent to respond to the demands of tomorrow.

The core of our skills system is the ability to respond at pace to the needs of business and to shifting wider economic circumstances, addressing local, regional and national employer demand, while ensuring Scotland has a highly-skilled working population. With a committed resource supporting effective workforce planning, building resilience within business to disruptions and creating conditions for long term sustainability, Scotland provides the responsive skills system investors identify as being key to their growth ambitions.

Feedback from investors reinforces that Scotland’s people and skills are key factors in investment decisions

Scotland Is Ranked First Out Of 36 OECD Countries in Terms of High-Level Qualifications.^[29]

Scotland Proportionally Has More People Aged 25-64 Who Are Tertiary-Level Educated Than Any Eu Country Or Equivalent.^[30]

The Proportion of Scotland’s Working Age Population with A Degree or Professional Level Qualification Has Increased From 16.8% In 2004 To 29.6% In 2018.^[31]

In 2019, 83.1% Of All Employees in Scotland Received the Real Living Wage – A 2.5 Percentage Points Increase On 2018.^[32] Not Only Does Scotland Have A Higher Percentage of Employees In Receipt Of The Real Living Wage Than The Other UK Nations, But It Is Higher Than The UK Overall.^[33]

Scotland’s ambitious expansion of apprenticeships is recognised globally as a world-class innovation. Co-designed with businesses Scottish apprenticeships offer structured training and qualifications that are matched to the skills requirements of current and future investor employers. This longstanding commitment to work-based learning supports employers to foster strong links with schools, colleges and universities so they can develop a skilled and productive workforce.

Successes such as CodeClan, Scotland’s first digital academy and Finance Fast Track in upskilling and reskilling the underemployed into key growth area roles in the sector, illustrate the agile and innovative thinking that is key to industry flourishing. This approach will be replicated across sectors where new and changing job requirements are in high demand and where the response to the impact of Covid-19 is urgent. This will provide existing and new investors with the confidence that Scotland will continue to provide the skills and talent they seek, as outlined by Scotland’s First Minister in Protecting Scotland – Renewing Scotland, the Programme for Government 2020-2021.

Science and research in Scotland remains cutting edge and truly excellent in global terms. A key partner for global collaborations, Scotland produces more research papers in the world’s top 1 percent than any other part of the UK. We have 8 percent of the UK’s population, 10 percent of its researchers, yet produce 12 percent of its research output.

Scottish universities attract around £166 million per year^[34] as foreign investment into research. This is on top of their income from other types of work for international organisations (such as consultancy) as well as from fees from around 36,500 non-EU international students each year, demonstrating the important role HEIs play in attracting inward investment.^[35]

These talents, and our ability to coordinate them as a single system, are and should be at the forefront of what we promote globally.

We recognise the significant challenge Covid-19 has posed across Scotland in skills terms and are working with skills agencies, employers and other stakeholders to evaluate existing skills interventions, including a digital economy skills drive.

4.5 Scotland’s Strengths: Business Environment

The key factors considered under this heading are productivity, labour costs, business networks and research and development (R&D).

Using recent data from the OECD, Scotland’s nominal productivity level was 82.0% of the USA in 2017, and ranked in 16th place (out of 37 countries) amongst the OECD member countries. Since 2007, despite the lower productivity growth achieved by the UK as a whole, Scotland’s growth has been similar to the OECD average and the latest data – which includes revisions to previous years – show that Scotland has been ranked 16th (in the second quartile) in all years since 2007. These comparisons are adjusted for Purchasing Power Parity (PPP) so that differing price levels and exchange rates between countries do not have an effect on the results.^[36]

Scotland is a stable, safe and secure location with a transparent government and robust legal institutions with coherent regulatory practices making it a safe and attractive investment location. As outlined earlier in this report for the past seven years, the EY Attractiveness Survey has named Scotland as the most attractive location for inward investment in the UK, outside of London.

Scotland is an attractive place for investment with its pro-business and investor friendly financial policies. Our integrated, agile approach means we can provide a bespoke support to individual projects, and work with inward investors to introduce new and innovative workplace practices which promote inclusive growth and create a wellbeing economy.

In fact, Scotland has a flexible and business-friendly environment with a competitive tax regime and low business set up cost – up to 40% less than London. While Scotland does have more efficient set up costs than London and the South East, we are not primarily looking to attract efficiency seeking investment.

By locating in Scotland, business have access to a highly educated, skilled workforce with a strong work ethic. Around 30% of Scotland’s working population has further education. Scotland has a multilingual workforce, speaking 170 languages.^[37] There are low staff turnover rates, which make it easy for businesses to employ and retain staff.

Scotland is a stable, safe and secure location with a transparent government and robust legal institutions with coherent regulatory practices making it a safe and attractive investment location

Business networks as measured from a Europe wide index published by the European Commission, takes into account multiple facets of the business environment, including business risk, financial institutions, and quality of education. Scotland’s business network scored above 50% in 9 out of 14 categories and is ranked 28 out of 125 regions across Europe. Our economic strategy and our Covid-19 economic recovery implementation plan are predicated on a partnership approach with business, trade unions, the third and voluntary sectors, local authorities and our enterprise and skills agencies, that is based on shared ambitions.

The Scottish Government and business have long worked closely together towards our shared economic ambitions. One of the core strengths of the response to the Covid-19 crisis in Scotland, has been the boost in collaborative efforts by businesses in Scotland and the public sector. Working together has helped us tackle the critical issues of business resilience, helped protect the productive capacity of Scotland’s industries, and built new and innovative supply chains around personal protective equipment and related supplies for the NHS and care sector. It is a partnership that has encompassed businesses of all sectors and sizes, and the public sector in all its forms, from the Scottish Government through enterprise agencies to local authorities.

We recognise that our economic recovery needs to be a national endeavour. We want to capture the gains in collaborative working, take on board new ideas for sector-led recovery and to create action-focussed partnerships to tackle economic challenges and take advantage of opportunities and competitive advantage.

In 2017, Scotland’s R&D expenditure was as follows.

• Scotland’s Gross Expenditure on Research and Development (GERD) represented 1.63% of Gross Domestic Product (GDP), below that for the UK (1.69%), the EU (1.96%) and the OECD (2.37%). However, spending on R&D in Scotland increased between 2016 and 2017, from 1.53% of GDP in 2016 to 1.63% of GDP in 2017, an increase of 0.10 percentage points. Scotland’s Research and Development performance is characterised by a particularly strong performance in Higher Education Research and Development (HERD) and a weaker performance in Business Enterprise Research and Development (BERD), with plans in place to rapidly ramp up this performance. Scotland’s Higher Education Research and Development (HERD) spend was £1,072 million in 2017 which, as a share of GDP, ranked top of the twelve countries/regions of the UK, and ranked seventh highest (top quartile) in the OECD.
• Scotland’s Business Enterprise Research and Development (BERD) spend is still relatively low compared with other countries: in 2017, Scotland’s BERD spend as a share of GDP ranked eighth of the twelve countries/regions of the UK, and ranked in the third quartile of the OECD. However, Scotland has experienced relatively strong growth in BERD over recent years: Scotland’s BERD spend was £1,356 million in 2018 - up 6.4% in real terms between 2017 and 2018, compared to a 3.9% real terms increase for the UK over the same period. We are on target to meet our target of doubling Scotland’s BERD between 2015 and 2025.

Scotland has performed well in attracting R&D inward investment projects, with the highest level of projects of any part of the UK (including London). In the past five years (2015-19), Scotland (in total) attracted:

• 537 fDi projects of which 88 were R&D projects (16.4%).

In the past five years (2015-19), Scotland (in our opportunity areas) attracted:

• 349 fDi projects of which 65 were R&D projects (18.6%).

The opportunity areas set out in Section 6 of the plan are all high R&D sectors.

In Section 8 we seek to strengthen our offer to inward investors by setting out future policy plans on collaboration between universities and industry.

4.6 Scotland’s Strengths: Infrastructure, Digital Connectivity and Our Natural Capital

The key factors of importance to inward investors considered under this heading are infrastructure and digital connectivity and our natural resources.

From city centre locations and business parks that are within an easy commute of a working community of 2.8 million people, to rural sites, industrial units, large-scale manufacturing plants, port-side hardstanding facilities and development land for new build options, Scotland has a great deal to offer to prospective new employees.

Infrastructure: Transport Connectivity

Scotland has been ranked as being the best connected large region in Europe^[38], and benefits from strong connectivity across a range of transport modes. Major investment in transport infrastructure, including for active travel, has improved access across the whole of Scotland and the UK. In Scotland’s most populous region, fast and frequent trains connect Glasgow and Edinburgh, passing through and connecting the Central Belt, containing most of Scotland’s most densely populated areas. Scotland’s transport network also supports over £180 billion of trade with the rest of the UK, Europe and across the world^[39].

Scotland’s five main airports have international flights that connect millions of passengers to around 150 destinations worldwide, and scheduled services to international destinations have more than trebled since 2001^[40]. Scotland’s international connectivity also benefits from frequent connections with some of the largest hub airports in the world, including London Heathrow and Amsterdam Schiphol.

Since 2007, we have invested over £20 billion across trunk roads, rail, buses, ferries and air services as well as active travel. We are committed to supporting active travel while setting out ambitious targets to decarbonise the rail network, to adapt our infrastructure to climate change impacts and introduce low emission zones in four cities: Glasgow, Edinburgh, Aberdeen and Dundee.

In Section 8 we seek to strengthen our offer to inward investors by setting out future policy plans on infrastructure.

Infrastructure: Digital Connectivity

The Scottish Government, together with its partners, has invested £463 million to date in the Digital Scotland Superfast Broadband (DSSB) programme and has substantially exceeded its fibre broadband access targets. Over 97.8 percent of premises in Scotland are now able to access fibre broadband and over 94.3 percent can do so at superfast speeds of 30Mbps and above^[41]. The DSSB programme committed to supplying commercial fibre broadband in Orkney, Shetland or the Western Isles – now over 80 percent of premises in these areas have access to fibre broadband.

Covid-19 has accelerated the shift to digital and placed an even greater emphasis on the need for a strong digital infrastructure. Home working is not a new concept but has become a core component of operating models in company responses to the Covid crisis. Scotland, particularly across the Highlands & Islands region, has been at the forefront of supporting remote working for over 15 years. We supported pioneering projects with companies including BT, Serco and Sykes to successfully test and adopt multiple approaches to remote working. There will be a strong role for Scotland to play in a pivot to a more future-facing distributed working model whereby companies rethink their corporate real estate footprint and engage a dispersed workforce in particular geographic skills hubs.

In Section 8 we seek to strengthen our offer to inward investors by setting out future policy plans on digital connectivity.

Natural Capital

Our economy is fundamentally dependent on our natural environment, which along with our people, is one of our greatest national assets. The beauty and quality of our nature and landscapes is the essence of Scotland’s global brand, attracting people and businesses to choose Scotland as a place to live, work and invest. Our key natural assets include:

Wind/Tidal

• Scotland is home to the world’s first tidal array (Shetland) and the world’s first floating offshore wind farm.
• Scotland has 12,000km of coastline and more than 790 islands. It has 25% of Europe’s offshore wind and tidal resource.
• Scotland is the best place in the UK to build subsidy-free wind farms due to our abundant natural resources and over 60% of the UK’s onshore wind capacity.
• We have the UK’s largest wind farm producing 539MW. By comparison Norway’s largest wind farm, Roan, produces 255.6MW and New Zealand’s Tararua 161MW.

Our Local Climate and Geography

Scotland’s local climate and geography is a key natural assets. Its economic value is apparent across our world beating food and drink products. Only one country, Scotland, can make ‘Scotch’. Only when the whisky has matured in Scotland for a minimum of three years, can it be labelled and sold as Scotch Whisky. Single malt Scotch Whisky is usually classified in one of five categories - Highland, Lowland, Speyside, Islay, and Campbeltown, with the local climate and geography of each region adding its own tastes and flavours to the whisky produced there.

Scottish salmon’s good environmental story with its small carbon footprint and low water use plus global recognition of its taste, quality and provenance is clearly understood in almost every corner of the globe.^[42]

Scotland is now the third largest farmed salmon producer in the world (the largest producer in EU and is globally third after Norway and Chile).

One of Europe’s largest seafood producers, our cold, clean waters make Scotland’s seafood some of the best in the world.

Scottish salmon was the first fish to gain the prestigious ‘Label Rouge’ quality mark. Unpolluted seas and strong currents are essential to help develop the firm, textured flesh and exceptional flavour Scottish salmon is renowned for.

Salmon has become Scotland’s biggest food export with an estimated value of £600m in 2017, driven by the EU, US and China. Researchers and food manufacturers increasingly invest in new technologies to improve productivity of salmon farming in an efficient and sustainable manner, increasingly incorporating artificial intelligence.

In Section 8 we seek to strengthen our offer to inward investors through a commitment to reviewing the regulatory environment around our inward investment projects and ecosystem to maintain and enhance these benefits, while protecting our natural habitat and environment, so key to our quality of life and long-term economic benefits for local communities.

4.7 Scotland’s Strengths: Quality of Life

The key factors considered under this heading are life satisfaction, community support and the environment.

Life Satisfaction

Scotland’s high quality of life as an attractor for talent and investors is well recognised. Edinburgh was rated fourth in Deutsche Bank’s global quality of life survey 2019.^[43]

A 2019 report named Glasgow as the best city in the UK for millennials to live and work in, with Aberdeen following in third place. Credit rating company Totally Money looked at 63 UK cities and assessed them on factors including work opportunities, cost of living, property prices and “fun stuff to do”. The report took into account data such as weekly earnings, graduate work prospects, employment rates and the number of business start-ups.^[44]

Life is culturally rich in Scotland, commutes are short and health care is free. Scotland’s history and landscape draw millions of tourists, and the coast, lochs and mountains mean endless possibilities for outdoor activities. Scotland’s cosmopolitan cities are full of life, culture and entertainment.

Along with highly competitive salaries, Scotland’s cities offer monthly living costs that are roughly 10% lower than other UK cities such as Cambridge and Oxford and as much as 30% lower than London^[45] – with no compromise on skills and talent.

In section 8, we outline our intent to conduct a review of policy and regulation in Scotland, which will include the environment and our natural capital, to enhance our quality of life proposition.

Talent in a Progressive, Tolerant Society

Scotland is also a tolerant and progressive society which upholds progressive values and human rights. The Scottish Government condemns human rights abuses and corruption wherever it occurs and is fully committed to the UN Guiding principles on Business and Human Rights. We uphold these values and principles in our commitment to equality, social justice, and sustainable, inclusive growth, at home and abroad. Guidance is in place to support the investment decision-making process with regard to the human rights record of companies.

In Section 8 we seek to strengthen our offer to inward investors through a commitment to review the regulatory environment around our inward investment projects and ecosystem, to enhance our quality of life proposition.

Scotland’s high quality of life as an attractor for talent and investors is well recognised

4.8 Scotland’s Strengths: Regions and Clusters of Expertise

Attracting inward investment is competitive, and increasingly so with more nations and regions chasing fewer investments. To succeed in this market, we have to understand and leverage our strengths across all of Scotland’s regions.

Scotland benefits from a diverse spread of sector specific strengths across many of our regions and the benefits of employment by inward investors and felt across all of Scotland’s regions.

Inward investment lifts wages across the regions, bringing higher wage benefits at both a regional and
a national level.

Source: Scottish Enterprise analysis using data from Businesses in Scotland

To succeed in this market, we have to understand and leverage our strengths across all of Scotland’s regions

Clusters are regional concentrations of expertise and activities in groups of related industries. They emerge naturally through market processes and as spillovers among such activities enhance performance at the firm and regional level.

Examples of positive effects, that often grow with the critical mass of expertise in a given location, are a labour market with specialised skills, local supplier networks with specialised capabilities, and a knowledge pool driven by business innovation activities and knowledge institutions. Clusters differ from cluster organisations; the latter manage the networks of firms and other entities within a given cluster. In less populated or rural areas, the ‘agglomeration’ effects due to the presence of a large number of interdependent firms are weaker. However, rural clusters can be important drivers of development and emerge from: one or more ‘pivotal’ companies (and their ‘ecosystem’ of suppliers and partners); from a pre-existing developed set of skills/traditions; or as the result of a natural resource.^[46]

Using our deep understanding of key regional assets which are of international scale and quality, we will seek to build places and present these as strong investment options within the overall Scottish proposition

Some examples of these strong place based assets include:

Low Carbon Transport in Dundee

Michelin Scotland Innovation Parc in Dundee is a globally competitive centre for advanced manufacturing, skills and innovation in low carbon energy and sustainable transport. The site has excellent infrastructure, connectivity and space for companies to grow. It includes an advanced skills academy to develop the workforce of the future and comprehensive company support packages. Future investment opportunities will include a hydrogen technology integration centre, to demonstrate the coupling of hydrogen technologies in the transport and energy sectors at scale.

High Value Manufacturing in Glasgow

The major asset underpinning Scotland’s ambitions in high value manufacturing is the Advanced Manufacturing Innovation District Scotland (AMIDS). Located near Glasgow Airport, this will become an internationally recognised centre for innovation, research and manufacturing in Scotland’s industrial heartland. AMIDS includes the National Manufacturing Institute for Scotland (NMIS), the Advanced Forming Research Centre (AFRC), the Lightweight Manufacturing Centre (LMC) and the Medicines Manufacturing Innovation Centre (MMIC). In section 5 we consider further Scotland’s high value manufacturing assets including the AMIDS.

Low Carbon Infrastructure in Hunterston

Hunterston Port and Resource Centre (PARC) will become a key element in Scotland’s low carbon infrastructure. There are three core pillars to the site – Marine, Port activity and Industrial use across a range of sectors including light manufacturing and renewable energy generation. The dry dock area can be used for the construction of floating offshore wind turbines for the renewable energy sector and on decommissioning and recycling assets from the oil & gas sector.

Energy Transition in Aberdeen

The £62 million Energy Transition Fund (ETF) seeks to help both accelerate economic recovery from the Covid-19 pandemic in a key sector and region, and assist with Scotland’s long term aims to decarbonise the economy – shifting the energy sector from using fossil fuels to renewable energy sources.

Scotland has attracted 6.3% of renewable energy projects that came into Europe, and 6.4% of the jobs over the last three years

The ETF will boost the North East renewable energy sector further, helping businesses and workers in the region build resilience to economic fluctuations, and help to diversify the region’s energy sector and wider economy whilst maximising inclusive growth impacts.

The potential investment projects for consideration have been identified and will be the focus of the
ETF programme:

• Energy Transition Zone
• Net Zero Solution Centre
• Global Underwater Hub
• Hydrogen projects (with some links to Carbon capture, utilisation and storage (CCUS) projects)

We are working with regional partners and supporting them as they develop business cases at pace, the approval of which will allow these projects to move
into delivery phase. As well as articulating the economic benefits, these business cases will also
give details of how the projects will fit within the
wider energy ecosystem, and demonstrate strategic links with broader government policy aims.

Industrial Biotechnology in Grangemouth

Industrial Biotechnology is a clean technology which can support the shift away from chemical and petrochemical based industries, many of whom are located in Grangemouth, towards sustainable high value manufacturing. The vision, as part of the Falkirk Growth Deal, is to develop new Industrial Biotechnology pilot plant and demonstrator facilities in Grangemouth to test CO₂ re-use and biomass as feedstocks, and develop new, clean biorefinery processes.

Low Carbon Rail in Fife

Spanish train manufacturer Talgo has announced plans to locate a proposed major new train manufacturing facility at Longannet in Fife, supporting the creation of around 1,000 direct high value manufacturing jobs and providing new opportunities to develop a cluster of low carbon rail innovation and supply chain companies around this major investment. Longannet offers the opportunity to develop a physical focal point for this clustering of rail skills, innovation, test and demonstration and supply chain activities on a site with excellent rail and port connectivity.

Precision Medicine in Glasgow

Precision Medicine enables clinicians to match medical treatments to the individual characteristics of each patient, based on an increasingly data-driven approach to healthcare. Glasgow has world class clinical and research assets for precision medicine that industry can access. Scotland’s assets and expertise in precision medicine are considered in more detail in Section 5.

Healthtech in Inverness

The healthtech sector incorporates many of Scotland’s strengths in medical technology and diagnostics as well as sensors, data analysis, AI and digital technology to meet the needs of a rapidly expanding point-of-care market. Inverness has a rich history in innovation in the sector attracting investors from around the world, including significant investment from US and Scandinavian companies choosing Inverness and surrounding rural locations as a base to design, develop, evaluate and manufacture cutting edge products and services.

The Marine Economy in the Highlands and Islands

The Highlands and Islands are well placed to take advantage of the growth potential in the marine economy. The region has 61% of the UK coastline, combined with innovative businesses, outstanding research capability and a skilled workforce. The European Marine Energy Centre in Orkney already demonstrates the potential of the wave and tidal energy sector. There is now an opportunity to build on this through an increased focus on innovative aquaculture and marine biotechnology. Aquaculture and its supply chain support more than 12,000 jobs and offer opportunities in some of Scotland’s most remote and fragile communities.

Having considered the criteria inward investors consider when making investment decisions in this section, we turn to look at how we can match these criteria and investment opportunities to Scotland’s strengths.

The Highlands and Islands are well placed to take advantage of the growth potential in the marine economy. The region has 61% of the UK coastline, combined with innovative businesses, outstanding research capability and a skilled workforce