In Scotland: You could have it so much better

Scottish Enterprise has revealed spending plans which should see nearly £190m invested in direct support for Scottish businesses over the next three years. The figures were included in Scottish Enterprise’s Business Plan for 2009-12 which was published last June. In the next year, this will see over £17m invested in specialist support for companies, which includes help to develop leadership and management capabilities in the current climate as well as manufacturing support through the Scottish Manufacturing Advisory service.

It also includes almost £14m to drive forward innovation within Scottish companies and encourage them to invest in research and development and a further £26m to increase the availability of risk capital for Scottish companies. An additional £5m will be invested to help businesses expand into new overseas markets.

Scottish Enterprise Chairman, Crawford Gillies said: “Over the past few months we have been working very closely with businesses and our public and private sector partners to identify the real impact of current economic downturn on Scottish companies. As a result, we have reallocated our resources to ensure we are investing more of our budget in direct business support. The change in resource allocation will help companies through a number of activities, including increased advice and guidance, additional resources for equity investment and through extra support to exploit new markets, both at home and abroad.”

Jack Perry, Chief Executive of Scottish Enterprise added: “There is no doubt that the events of the past year have created new challenges not just for our companies, but also for Scottish Enterprise itself. We have worked hard to ensure that we can respond to the needs of our companies quickly and effectively, while at the same time continuing to focus on the long term goals of a sustainable and successful Scottish economy.

“Over the next year we will also be encouraging our business customers to think creatively about how they develop new products and processes, implement new ways of working and target new markets, as well as challenging existing business models. Last year’s organisational restructuring created major savings which have been redeployed in front line services. This is part of a continual process and we will work to identify further efficiencies, which can be invested in more support for our customers.”

The Business Plan details a number of activities to support economic growth, including:

• Support for 200-300 companies to improve their performance by operating more efficiently.
• Intensive hands on support for up to 25 high growth start up companies, which have the potential to grow into £5m businesses over the next three years.
• Attracting at least 1,800 high value jobs through inward investment to boost employment in Scotland’s key sectors.
• Support for 600-700 companies to access new international markets
• Stimulating an additional £60-70m of business investment in R&D activity.
• Support for 700-800 companies to explore new ways of working through our range of innovation advice and support.
• Attracting more than double the contribution from the private sector in our high impact business infrastructure projects compared with our own investment.
• Leveraging at least twice as much private sector equity investment in Scotland’s companies from our investment products.

Scottish Enterprise will also continue to invest in projects to increase the competitiveness of Scotland’s key industries across the globe and boost Scotland’s overall long-term economic performance. This includes placing more emphasis on the commercialisation of Scotland’s outstanding science and research base, and putting more resources behind those projects most likely to become the high growth technology companies of the future. The integration of ITI Scotland with Scottish Enterprise’s wider commercialisation activities will be a key component of the new approach.

Scottish Enterprise will also bring forward a further £30m of investment in capital projects such as the Scottish Exhibition and Conference Centre, Edinburgh BioQuarter and Fife Energy Park to support growth in the tourism, life sciences and renewable energy sectors.

Furthermore, Scottish Enterprise has announced that it has secured £39.2m in European funding to support projects that will help stimulate business growth in the current economic climate. The funding secured includes an additional £20m for the Scottish Venture Fund, the single largest Scottish award made in this round of European Regional Development Funding (ERDF).

Scottish Enterprise also highlighted that it will work alongside the Scottish Government to explore proposals for a Scottish Investment Bank, which will bring together the Scottish Co-investment Fund, Scottish Venture Fund and Scottish Seed Funds. Scottish Enterprise’s range of equity investment funds are designed to encourage greater levels of risk capital investment in Scottish early stage companies. Despite the economic downturn, there was a record number of investments in 2008, helping to boost business growth and provide investment for Scottish companies.

Other Scottish Enterprise projects which will benefit from the £39.2m ERDF funding include:

• £4.9m for Scottish Enterprise’s Business Efficiency programme, helping growing Scottish businesses to reduce costs and improve efficiencies.
• £1.5m will support the development of the Energetica business site, which aims to create the world’s greatest concentration of energy technology companies, housing and leisure facilities along a 30-mile coastal strip between Peterhead and Aberdeen.
• Rural business property support will benefit by £385,000, with the South of Scotland region securing £320,000. These projects provide support for capital investment in the creation of new sites or premises, or the extension or adaptation of existing buildings, for rural businesses.

Commenting, Jack Perry, Chief Executive of Scottish Enterprise, said: “The level of ERDF funding we have secured is a huge endorsement of our work in supporting innovation, the commercialisation of research and development and investment in Scotland’s high growth businesses. The funding secured for the Scottish Venture Fund is particularly pleasing, as it will allow us to increase the availability of risk capital for some of Scotland’s most promising companies.

“I am also looking forward to working with the Scottish Government to explore their proposals for a Scottish Investment Bank. Over the past year, we’ve seen record demand for our investment products. The number of investment deals last year rose by 49 percent and the value of deals also increased to hit a record £29.7m, so we are confident that there is still a healthy appetite for equity investment from all parties.”

SDI announced that over the period 2008-09 it brought £500m of planned investment to Scotland, including almost 2,000 high value jobs. Speaking about the report, Lena Wilson, Chief Executive of SDI said: “Scotland has a strong track record of attracting foreign direct investment, and our World Bank ranking further builds on the real success we have had over the past year in bringing projects to Scotland.

“However, in the current economic climate it’s more important than ever that we continue to focus on attracting high quality research and development projects and opportunities for skilled employment to Scotland. Inward investment based on this has the potential to become firmly embedded in the Scottish economy and make a real contribution to our long-term growth.”

For more information:
Visit scottish-enterprise.com or Tel: 0141 248 2700 or Write: Atrium Court, 50 Waterloo Street, Glasgow, G2 6HQ