Shaping Scotland's economy: inward investment plan

5 Our Ambition: Setting The Direction On Inward Investment

5.1 A Values-Led Proposition

Scotland has a strong narrative as a progressive, inclusive sustainable country with a clear set of values set out in the National Performance Framework around fair work, net zero and sustainable and inclusive economic growth. That narrative in turn forms the basis of our ‘sales pitch’ to inward investors, many of whom increasingly position their values at the centre of their mission statement and focus on the wider benefits they contribute to society beyond generating short term profits. A successful economy is one which delivers high productivity, high innovation, high levels of technology and high wages for the long term. It is therefore fundamental that our values inform the decisions we make on which investors we engage with to ensure alignment and a solid foundation for an enduring partnership.

Collective wellbeing is at the heart of Scotland’s economic strategy, which seeks to create an economy where wellbeing is as fundamental as GDP when measuring success. Our participation in the Wellbeing Economy Governments (WEGo)^[47] group of nations places us at the forefront of this shift globally.

Scotland has set itself a target of becoming a Fair Work Nation by 2025, by seeking to create shared value for both employers and employees. Fair work means creating high quality jobs where staff can make a difference, and then benefit from the value they have helped to create. In Scotland, we see fair work as being fundamentally important to delivering inclusive growth – by driving innovation, productivity and inclusion.

There is already a growing momentum of businesses implementing these principles across Scotland as they undertake a commitment to create jobs, develop talent, deliver flexibility, promote creativity and increase productivity and efficiency. In Scotland, investors can already make a commitment to the Scottish Business Pledge, access a range of resources, including funding and tools to support fair and flexible working objectives as a means to deliver business success.

• Action 1. We will place our values at the centre of our engagement with current and potential inward investors, to ensure a strong partnership basis to our relationships around promoting inclusive growth and creating a wellbeing economy with zero carbon and fair work at its core.

5.2 What We Will Do Differently

To deliver this plan we need to be clear about what we are going to do differently, and why. In this section we will identify Scotland’s strategic sectors, and why they are important to shaping Scotland’s future economy. But the change in our approach is much wider and encompasses a number of key aspects.

Our historic focus has been on landing new projects and the creation of direct jobs. We have been largely agnostic in the sectors we have pursued; values have not driven our focus. Scotland’s regions have often worked in silos, with little focus on cluster building around specific strengths. Inward investment policy has been developed in isolation. This plan will move to a strategic focus, whereby we focus on a defined set of sectors, and target specific investors and projects which will help further strengthen Scotland’s capabilities in those sectors. We will not only consider the creation of new projects and direct jobs but also the wider ‘spillover’ benefits that a project can deliver, and where in Scotland those might land. Values will be central to our offer, and inward investment policy will be aligned with the wider policy agenda.

We will also retain the necessary degree of flexibility in our approach to learn and adapt in what is a highly complex and competitive global environment.

A successful economy is one which delivers high productivity, high innovation, high levels of technology and high wages

Figure 20: What We Will Do Differently

From

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

To

• 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

In the following sections we detail what changes we will make to deliver this new approach to securing inward investment. In section 7 we describe how we will articulate Scotland’s proposition and the channels we will use to take that message to market. In section 8 we will detail the policy changes we plan, both directly covering our approach to inward investment and the wider policy areas that make Scotland an attractive proposition. Much of this is already underway and requires alignment to our new inward investment approach, and where new policy initiatives are required these are identified.

5.3 Focussing on Key Investors in Our Opportunity Areas

This Plan sets out a clear, evidence-based direction for where Scotland can deliver the maximum benefit to our economy from inward investment, based on our demonstrated strengths aligned with global opportunities. Proactively identifying the inward investors we want to partner with is a key part of this approach. Gaining a deep understand of the strategic decision making criteria of our target investors involved building relationships with them, not only in Scotland but also in their headquarter locations. In making decisions about the location of our inward investment attraction teams, it is important to recognise that inward investors are by their nature global, and the location of key decision makers will vary depending on the specifics of any given business. However a small number of global locations are typically either the home to our target inward investor businesses, or are locations where they will have significant global decision making presence. This is likely to depend on the businesses we are targeting and where their global headquarters are based. We intend to support a small number of key centres in important locations in Europe, North America and Asia. We see London as a key centre given its global links.

• Action 2. We will align our global resources and footprint to the nine priority opportunity areas set out in the Plan, and in the locations where we can maximise access to these investors. SDI has assigned lead generation leads for each of the nine opportunity areas. SDI’s specialists will spend at least 80 percent of their effort on proactive opportunities aligned to these opportunity areas.
• Action 3: We will target the immediate expansion of our top 50 existing investors to rapidly scale opportunities. We will proactively strengthen and deepen our relationship with these investors – both in Scotland and at their global HQs – with a view to maximising the additional investment and job creation opportunities through a deeper understanding of their strategic direction and positioning the role Scotland can play to support those objectives.
• Action 4: We will identify and proactively target 50 leading global companies we want to attract to Scotland across our nine opportunity areas. Where these do not already exist, we will build strategic relationships with these businesses to understand their global expansions plans and the role Scotland can play in these plans. We will keep this list under review to monitor new entrants and shifts in global industry dynamics.