A working ethos: Focus on Scotland

No one can predict with certainty what 2009 and beyond has in store for the Scottish or World economy and business. What is clear is that this is the first global recession caused by a banking crisis. I take confidence from the fact that we Scots are a canny and brave nation, with the innovation and skills to prosper in today’s global marketplace. 

Professor Brian Ashcroft put it succinctly when he said: ‘The story of the Scottish economy in the twentieth century is one of glory, followed by rapid demise, resurrection and consolidation.’ The Scottish economy has seen great change over the last 100 years. The depression of the 1930s led to an era of post-war state intervention in Scottish industry. This wasn’t sustainable. But the soulless rationalist reforms of the 1980s were all too painful.

In the 1990s Scotland turned a corner – the economy began to encompass a broader base with more sustainable enterprises. Scotland’s economy has greater resilience and is more diverse than ever before. Heavy industry and manufacturing no longer predominates. Service centres, hospitality and tourism and the financial services sector dominate the market. The latter alone employs approximately 10 percent of Scots.   

We weathered the bursting of the dotcom bubble in 2000. What we are now facing is the first international recession induced by a global financial crisis. The state has a role to play but not in the interventionist guise of the 1970s. The UK Government’s recapitalisation and insurance of the banks, the fiscal stimulus package and the ‘Real Help’ measures are testimony of this. We back enterprise and remain convinced that we need markets where if possible, government act only when necessary.

We are finding ways of stimulating and guaranteeing additional lending. I know that this is particularly important for the thousands of SMEs who employ over half the Scottish workforce and constitute 99 percent of our businesses. Scottish business today incorporates such a wide spectrum of activities. It covers the building of aircraft carriers to the smallest high-tech start up, it ranges from the manufacture of surgical instruments to the bed and breakfast proprietor who hopes that Homecoming 2009 will mean more visitors.

So despite the downturn it is important to underline that Scotland still has plenty to promote, including four crucial areas of potential growth. Our energy industry has prospered from three decades of intensive North Sea exploration. Our geology has given us the benefits of coal, oil and gas. Our geography affords us wind, waves and tides – the low carbon renewables of the 21st century.

Scotland is still a world leader in financial services, particularly in banking, insurance and fund management. While fund values may have tumbled worldwide, corporate knowledge remains in Scotland.  Edinburgh is the world’s ninth largest financial centre, a key financial hub with a rich reservoir of talent.

At the same time, Scotland retains a vibrant high-technology engineering sector, encompassing activity in the fields of aerospace, defence industries and marine. And fourthly, tourism provides Scotland with wonderful opportunities. Scotland is a unique product. Eco-tourism offers the opportunity to sample Scotland’s rugged beauty, wide open spaces and healthy air.

Scotland is a great place to do business, a great place to live and work. Scotland welcomes inward investment. Investors will find a highly-skilled workforce. Combine these skills with enterprise, innovation, competition and investment. It produces a sure recipe for future business successes in Scotland.

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