International Trade Inquiry
I agree with Wolfgang Mössinger that the answer to the question what more could be done depends on the resources that are available. Switzerland is an open and internationalised market—every second Swiss frank is earned abroad—so even our small and medium-sized enterprises know the foreign markets. With regard to the UK, that knowledge and engagement is concentrated on the south of England, London and the greater London area. However, it is important to concentrate on certain sectors. I was pleased by an initiative that was taken by a global Scot who lives in Switzerland—one of the board members of the British-Swiss chamber of commerce—to introduce Scotlink in order to bring Swiss companies into closer contact with Scottish companies, particularly those in the financial and energy sectors. The contacts are already in place, but it is always possible to focus on certain areas and bring in a specialised delegation.
Taking into account the resources that are available to the SCDI and other organisations, I have been very impressed by their work and their availability.
The office of the Hungarian trade commission is in London, but we have to differentiate between countries. That is why we employ a consultant here in Scotland. We think that it is important to have direct connections. I will set out what we have done during the past four years as far as visits, trade delegations and events go—from Hungary to Scotland. We had two ministerial visits with one state secretary from Hungary. We had three major trade opportunities events—in Stirling, Edinburgh and Glasgow—which were supported by local chambers of commerce, the SCDI and SDI.
Through our consultant, Eurotactics, we organised three missions from Scotland to Hungary. One of those was supported to an extent by the SCDI, but the rest were arranged by us, from Scotland. In Hungary, we arranged matters not through the UK Trade and Investment office but through the Hungarian Investment and Trade Development Agency.
My ambassador and I arrange for companies to visit Scotland at least two or three times a year. The Hungarian Investment and Trade Development Agency’s chief executive officer and his deputy have also visited Scotland three times.
That is what we have done during the past three or four years, and I hope that the SCDI will match it soon.
Reto Renggli (Consulate General of Switzerland)
Good morning. I am the Swiss consul general here in Edinburgh. I will be brief. Trade relations between Switzerland and Scotland are rather good, but unfortunately not many statistics are available. The only ones that I know about are the export statistics from 2007, in which Switzerland is ranked at number 9, which is rather good.
From the consulate general’s point of view, co-operation with Scottish institutions on trade promotion has been excellent. Relations have operated at a project level. We have implemented projects in the financial industry, which have involved Scottish Financial Enterprise, its Swiss counterpart and SDI. SDI does not have its own office in Switzerland; it is based in Düsseldorf. However, it seems to me that all its employees have an active interest in Switzerland. If we have questions for our colleagues in Düsseldorf or in Glasgow, they are very open minded and give us all the support that we need. From our perspective, co-operation has been excellent. We have been able to implement projects, with excellent results, and we have received very good feedback. In my view, we have nothing to complain about.
Does anyone else wish to comment?
Indeed. It is a bit like Scottish Enterprise. I have a quotation here about Scottish Enterprise, which talks about
“the irrationality of the ... decision making process and the effects of cronyism in the ... system and finally, the concentration of ‘process’ over ‘Outcome’”.
That is the difficulty. Everyone wants to process things but they are not prepared to see them through to the final outcome.
Do you have an author for that anonymous quotation?
Indeed, but the quotation’s authenticity is important if we are to get to the bottom of the issue. That is why I am seriously asking the question. On the one hand we have a Government agency that is trying to promote business abroad; on the other we have businesses in the chamber of commerce, although presumably there are not chambers of commerce in Mongolia.
Yes. I have been in touch with the chambers of commerce in Ulan Bator on many occasions and they have tried their best, but I ask you to bear it in mind that the country is still quite immature and, as such, it needs a lot of hand-holding. Western culture and methods of trading need to be explained. I am not talking about horse trading or anything like that, but about proper commercial trading on which we need to try and influence them.
The situation is the same in parts of China. It is not necessarily the case in the main centres of business and commerce but, as soon as we go outwith them, the same—shall we say—herdsman attitude can apply. We need to try to control that.
The universities in Ulan Bator are becoming more mature and better recognised and are taking on western thoughts and processes. That is why—as has been said—the Open University is spending much time and energy on ensuring that distance learning facilitates better trade between the two countries.
I would rather not discuss the authorship of the quotation now, but I am prepared to talk to you about it later. I have been informed that the Scottish Enterprise situation is covered by a caveat that precludes publication, so I cannot say too much about it.
He works part time.
When we heard from the China-Britain Business Council earlier this morning, I was keen to explore the relationship between the work that it does on behalf of UKTI—as an agent for it, in effect—and the work that is done by the commercial section of the British embassy. The CBBC explained that the development of the private sector in recent years means that 90 per cent of UK input to trade promotion and the development of business connections now lies with it as an agent for UKTI and that the embassy deals with politically sensitive areas, or state enterprise areas in which it has particular skills. In the countries with which you deal, what are the respective roles of UKTI and the British embassy in supporting business connections, particularly in supporting connections between the country and Scotland?
The embassies around the world were originally there for political reasons, then they became trade and hand-holding enterprises, particularly in the case of new embassies or new countries. That has now stopped. From my experience of being on and leading trade missions, I agree that trade promotion lies mostly with UKTI rather than with the embassies. The embassies are always there to support people. For example, a trade mission can get the embassy to hold a reception, if it is important enough. That is useful because it involves the local community of the country that is being visited. The people who come to the exhibition or the people on the trade mission or scatter mission get invited to the embassy to meet people. The embassy is more a central meeting place than anything else.
The role of the British embassies or the representation of Scotland has changed a lot. I do not believe that it should necessarily be a hand-holding exercise.
UKTI’s main responsibility is to support UK companies and represent their interests. That is certainly what it does in Budapest, where it employs one office director and seven or eight Hungarian experts, all of whom do a great job. In fact, I would say that the whole British embassy is a UKTI representation, representing British companies’ interests. For example, before the new British ambassador to Hungary went to Budapest, he visited our embassy in London and met the ambassador; I then invited him to dinner and we spent hours discussing business opportunities. Most of his work focuses on culture and business. No matter whether we are talking about UKTI or the embassy, they amount to the same thing.
I agree with that. Every time we approach the SCDI, SDI or local chambers of commerce such as that in Edinburgh, they are open and they help our activity. What they lack a little is that they are not proactive enough in relation to Hungary. Maybe they think that Hungary is not a big enough market or perhaps some local companies think that Hungary is a little too far away for them. Perhaps there is a lack of information. We try to spread the news that Hungary has been in the EU since 2004 and that there is an open market. We have cultural festivals. The manager of Hearts for a couple of years was a Hungarian, and he did well.
He is a German citizen.
Yes, but he is Hungarian born. [Laughter.]
By the way—this is nothing to do with answering the question—I recently discovered that a whisky distillery in Arran uses Hungarian Tokaji wine barrels, so I really think that that whisky is fine.
We have not found it easy to engage. As you heard from my previous remarks, we thought that it should have been easy, but we felt that we were palmed off in the end. It was quicker and more effective for us to go direct to the universities or the linked companies or to other companies. That was very disappointing.
So the issue is about finding ways in which to reach interested parties. I guess that you have done that from experience.
We approached Scottish Enterprise, which we thought was the way to go, but eventually the correspondence came from that amorphous organisation called SDI, which is a great mystery to us.
Yes.
Yes. There are opportunities in energy and mining. Another is in tourism—that would be reverse tourism. There are also opportunities for whisky and various other Scottish products. There is enthusiasm for Scotland throughout the world and not only in places such as America and China. Education is another important example.
I have been approached by Mongolian entities who are trying to establish or create something to help the Mongolian economy. Likewise, Scottish companies approach me wanting to know more about Mongolia. I have to do that myself, rather than go through Scottish Enterprise or an equivalent organisation. That just does not work, because nobody seems to know anything about the country. I often receive inquiries from Scottish Enterprise about Mongolia.
You have both described skirmishes with officialdom, if I may put it that way. You have had negative experiences, but do you believe that the situation is set to change?
It is a question of organisation. If there are 12 companies selling whisky or knitwear, it can sometimes be overkill. I really meant that we should not just have 12 companies selling knitwear or fabrics and one company with widgets or jewellery. Co-ordination is needed. Having led a trade mission, we have found that such missions do not say no to people. People should be told, “This mission is not for you, but maybe the other one is”, or, “It’s not just for British companies.” That is the problem. Sectoral approaches are better because they are a bit more focused. At the same time, though, you can have a general scatter mission. I took a mission to Iceland that included architects and people in the hotel industry. There were people there who wanted to organise pop concerts and so on. However, the mission involved not just one person but two or three from each sector—it was organised in that way. It really is a question of organisation.
There is still an Iceland, though, as far as I know. I am not altogether sure about the Royal Bank of Scotland and HBOS.
Any other opinions?
It is a great idea but it has no effect on business, I am afraid.
I was a global Scot—I received my invitation from Jack McConnell back in 2002 or 2003. Although I involved myself a lot with Scottish representation in Germany, in my case nothing came of it. The situation may have been different in Switzerland, but that was the overall impression that I got. For instance, we received information about all the other global Scots worldwide but with no e-mail addresses. Something as simple as a list of e-mail addresses, which would have brought instantaneous communication, was lacking.
My point was that, given that a lot of the movers and shakers from the various countries will be here anyway, one of the purposes of external commercial representation ought to be to identify them and take the opportunity of their being brought into the ambit of people with potential trading and cultural connections—it was originally, in the 1940s.
My next comment is aimed specifically at Switzerland. I was asked recently to help with an article on the west Highland railway, which is our great scenic railway route. I found cause to compare that railway, which is delightful but very primitive, with the glacier express in Switzerland. During my time in Germany, I have seen it go from exactly the same status to being an operation with 10-car trains running every hour from Chur to Tirano, opening up that whole area of the country. I was driven to suggest that First ScotRail and Network Rail could do worse than get in touch with the Swiss authorities to find out how that sort of thing could be done in Scotland. That would be an excellent example of mutual benefit.
That would also be in the interest of my country. At the moment, the embassy has a programme presenting the public transport system in Switzerland, especially the greater Zürich area, where it is integrated. Should there be interest from Scotland, I would be happy to bring such a project up here. Switzerland is well known for its public transport system and is very proud of it. It would also be an excellent opportunity to promote Switzerland in Scotland.
This is a personal remark, not a remark that I make as the consul general. From my personal experience of the Edinburgh international festival, I would be sceptical about what you suggest, as it is necessary to distinguish between culture and business. First, if a delegation is brought to Scotland, they are interested in business, not in culture. Secondly—this is a detail, but a rather important one—in almost all European countries, August is a holiday month during which people do not work. We promote not only the Edinburgh international festival but the whole Scottish festival season tremendously in Switzerland. Many tourists come up from Switzerland for it, and they also want to see the military tattoo. However, I personally think that you should distinguish between trade and culture, although both are very important.
The Scottish Parliament will not have any direct representation, but I am sure that the Scottish Government will.
That is a similar question to the one that Mr Harvie just asked.
I am absolutely certain that SDI, Scottish Enterprise and VisitScotland will have strong presences at the tournament.
Do companies understand the roles of the agencies?
I was hesitating, because it is not my role, as a representative of Switzerland, to advise the Scottish Parliament. My comments are based on our experience, because we changed our system 10 years ago. Reference has been made to the number of private and public players in the system. Our goal was to have one point of contact for companies. When a company has a question about a topic or a market, it should know that it can go to an organisation that will refer it to the right person or institution. That is crucial, although the policy is hard to implement. SMEs, in particular, do not normally have knowledge of all of the organisations that are involved in trade and export promotion. Having a body that they can contact and that will refer them to the right person or institution is key to any public export promotion scheme.
12:30
Thank you, convener. I have two questions. The first is to Mr Stewart and Mr Murray about the debate that you had with Rob Gibson about the size of and knowledge in SDI. SDI will give evidence to the committee later in the inquiry so that is a question that we can ask. However, I suggest that SDI has not focused enough on Mongolia because it is an emergent trading nation as opposed to a long-established nation with a track record in particular areas. What do you think about that?
I would happily meet them on a one-to-one basis, as would other consuls general, especially those from emerging countries. Obviously, established countries have their own methods and their own way through.
We should bear it in mind that, of the 192 countries in the United Nations, 54 are represented in Scotland. More than 70 per cent of the world’s population is represented, so we are talking about a reasonable group of corps members who can speak on behalf of a large number of people. Obviously, China and India represent well over 50 per cent, but many smaller countries have now joined us. For example, Ghana joined two or three weeks ago. Ivory Coast and South Africa have also just joined. According to press reports, Libya claims to have a consul general in Glasgow—albeit that he is not a member of the corps as yet—although he seems to have been based in Glasgow for one obvious reason, so I do not know whether he will continue there. I have no knowledge of that country.
I apologise to Stuart McMillan for missing him out.
That concludes our questions. Our witnesses have shown us that there is a resource in Scotland called the consular corps of which we are perhaps not making as much use as we should. We will take forward that lesson during our inquiry. Thank you for giving up your time to come along this morning.
Meeting closed at 12:41.
I think that we probably do enough, in one way. However, the issue goes back to my basic point about co-ordination: we have to co-ordinate our inward and outward trade missions to a greater extent. As I said earlier, the SCDI and chambers of commerce do not co-ordinate their work well enough.
Wolfgang Mössinger’s point about language was important. I have heard people say, for example, “I can’t go to a trade fair in Mongolia because I can’t speak the language,” but you can always get an interpreter. I have found that the SCDI is extremely good at finding interpreters for you when you go on a trade mission—you pay for them, of course, which is fine.
We need to co-ordinate these events a bit better and not make them too multi-sector; we need to narrow them down. A recent tweed industry trade mission that I was involved in concentrated only on that particular sector, and people who came to that mission knew that they were going to hear about tweed—there was Harris tweed, a bit of Shetland tweed and so on—and that their dealings that day would be focused on one sector.
I am not suggesting that everything should be focused on one sector; I am simply saying that if the trade mission is about tweed there should not be someone there selling widgets or jewellery.
Scotland has too many organisations trying to do the same thing. That effort needs to be better co-ordinated.
Robyn M Murray (Consulate of Mongolia)
I am the honorary consul general for Mongolia in Scotland. I echo what my colleague has said and bring to the table a couple of examples regarding Scottish Enterprise.
The first example concerns a friend of mine who is well-experienced in cashmere and well-respected throughout the world—as Cameron Buchanan, who is also in the garment trade, will no doubt testify. In trying to set up a business in Scotland, my friend created his business plan as usual and, being based in Langholm, he took it to the people in Dumfries and Galloway, where I gather that moneys are still available following the foot-and-mouth outbreak. The people in Dumfries and Galloway said that it was the best business plan they had ever seen. However, when he went to the people in Galashiels, his business plan was ripped apart, because it was either not good enough or too good. The matter then went to Glasgow. The reply that he received was that Scottish Enterprise could not get involved in the business plan because the business could run out of funds before sales were made and
“the business has an extremely high degree of dependence on sales”.
That seems somewhat ironic to me.
As the chap was looking for only 15 per cent of the necessary capital, he decided that enough was enough. He went out to Mongolia and inner Mongolia, which is part of China, and he has now set up the warehouse distribution, the sales and marketing and the research and development for his cashmere business outwith Scotland. Therefore, Scotland and Langholm—a place that needs jobs—has lost at least 30 jobs. Knowing the entrepreneurial leadership of this chap, I consider that the company would have gone from strength to strength here. I am sure that Cameron Buchanan would concur with that. The warehousing is now based in England and the rest of the work is being carried out in Mongolia. It seems a great shame that Scotland has missed out. One reason for that is that Scottish Enterprise did not come up with the goods. To use the excuse that
“the business has an extremely high degree of dependence on sales”
shows a rather remarkable level of naivety.
After that, we proceeded to send a freedom of information request to the First Minister’s office to ask for a breakdown of Scottish Enterprise’s budget. We wanted to know how much of its budget was spent on salaries, consultants, its own assets and incurred expenses. We also asked how much was given in cash grants and loans to business as a discrete sum and as a percentage of Scottish Enterprise’s budget and so on. We were told that the Scottish Government did not have those figures and that we should inquire directly with Scottish Enterprise. When we did that, we were told that such figures were not available. If someone could tell us how we can get hold of those figures, we would be extremely grateful. We feel that Scottish Enterprise is letting Scottish businesses down and is giving Scottish enterprise a very bad name.
I also want to take up Kenneth Stewart’s point about the universities. We have been in discussions recently with the universities in Mongolia, where people are desperately keen to westernise their outlook on life, both commercially and socially. Having lived under the yoke of foreign invaders for the past so many hundred years, they seek a method of getting to grips with things, especially given all the mining and commercial activity that will happen there. The Open University is now actively engaging with the university in Ulan Bator to help to bring 20,000 students up to western standards. That project involves in excess of £15 million and is being done through Drumsheugh Gardens in Edinburgh. Again, that is another example of Scotland helping not only itself but foreign countries.
I just feel very frustrated that Scottish Enterprise is not punching its weight. As such, I feel that there should be a better form of leadership, as well as some sort of continuity as to who is who, so that we can move things forward.
Yes.
I am the honorary consul of Iceland, but I am also a businessman involved in the textile trade who travels all over the world on business.
I have two points to make. My principal interest is in trade missions and their lack of co-ordination, as Ken Stewart mentioned. Do you want me to carry on speaking about that just now?
Wolfgang Mössinger (Consulate General of the Federal Republic of Germany)
Good morning. I am the German consul general. I will reiterate the main ideas of my short written submission.
First, I expressed my appreciation for the work of the SDI office in Düsseldorf. I have personally witnessed one event in the Borders, at which somebody from SDI in Düsseldorf gave an excellent presentation about business opportunities in Germany. He actually spoke German, which is unusual in this country, and he helped companies to get over the initial hesitation to go to Germany. We often hear from company representatives who say, “But I can’t talk to them,” or, “I’m not very familiar with the country.”
In general, we do not have problems that need to be solved. German companies in Scotland enjoy absolutely equal status with home-grown companies and vice versa. One problem, however, is that most of the German companies that are active in Scotland are headquartered in England, in and around London, which means that the main decisions are not made here. That leads to the fact that the German-British Chamber of Industry & Commerce does not have many genuinely Scottish members. Lots of companies trade or are active in Scotland, but the German-British chamber in London, with its 800 or so member firms, does not include many member companies that are based and headquartered in Scotland. Unfortunately, that chamber is therefore not professionally represented in Scotland, so there is a kind of imbalance in the relationship between Scotland and Germany when it comes to supporting companies. We are grateful that SDI is much more active than the German-British Chamber of Industry & Commerce in that respect.
SDI covers a big area, including Switzerland and many other countries—everything east of the Rhine, as has been said. We have a bit of territory west of the Rhine, which it covers, too. However, SDI basically covers Germany and everywhere as far east as the border with Ukraine. That is a huge area to cover—it is a big task for SDI to fulfil, considering the number of people that it has.
That is a summary of what I wrote to the committee, and I will leave it at that. I am happy to answer any questions.
I suppose that the question is addressed to all of us.
To anyone who wishes to answer it.
I agree with Cameron Buchanan, but I think that there must also be co-ordination at a UK level. Trade missions to Mongolia, Inner Mongolia and various parts of China have been London-based, and Scotland has been excluded from them. If a Scottish co-ordinator were involved in the co-ordination that is being done around such visits, that would be helpful.
With regard to niche missions, we have whisky going one way, cashmere coming the other way and mining requirements going one way. We also have tourism and energy, which is going to be a rising star as far as Scottish export is concerned. We must concentrate on co-ordinating our efforts to ensure that the right hand knows what the left hand is doing. For example—I am not being political here—I fail to understand why, last year, two trade missions went to China within a month of each other. Perhaps someone can explain why that happened, but I find it difficult to comprehend.
11:45
I will briefly add to Robyn Murray’s remarks, convener, so that you understand. The Open University opportunity for Scotland, which SDI did not rate or did not consider, would have meant 20,000 students per annum. It was a dripping roast and had great potential; we felt that it was an opportunity missed by SDI.
We are a wee bit confused about how SDI operates: who is in charge, how economically and commercially aware its personnel are, and who briefs the staff. There is a tremendous role for an effective SDI that is properly run and managed. It would be a very good conduit for going forward.
I find it somewhat strange that, when we try to get information from the SDI, we are given a telephone number in Shanghai. In my opinion there should be someone in the organisation here who we can talk to directly who can point us in the correct direction and we should not have to make a phone call to Shanghai, which is extremely difficult to co-ordinate with the time difference.
There are.
In that case, has that route been used successfully?
I will refer to our system to represent a country of 7.6 million inhabitants, which is comparable to Scotland. Rob Gibson raised an important point. As has been said, having an office is expensive. Our approach was to identify first the key markets for Switzerland—existing key markets and those that were to be developed. In the most important markets, the Swiss equivalent of SDI opened offices. That is the public approach. However, many countries have bilateral chambers of commerce that are based on private initiatives. In such countries, our export promotion organisations conclude mandates with those private organisations, to co-ordinate public and private work. The Swiss system is the public-private partnership. I worked for seven years in that system, which works well. A small country cannot have offices everywhere, so it must concentrate on areas and work with private organisations that have the same interests.
Rob Gibson’s question is good. The German approach is that we do not carry the business community when it does not want to be carried. Our approach is demand led. Where there is enough demand, there will be a bilateral chamber of commerce, as there is in London. If there was enough demand in Scotland, there would be a bilateral German-Scottish one. There is a German-Irish one. In countries such as Brazil, China and the United States there are several regional chambers of commerce, not just a national one.
If companies from the other side—the partner country—are not yet strong enough to support a bilateral chamber of commerce, the Government gives support. I saw that in Russia after the fall of the wall, when the Soviet Union collapsed. Before the German-Russian chamber of commerce was introduced, we had several years of a German trade mission, which was financed mainly by the German business community but also by the Government.
We have a few other instruments, which are mainly based in Germany, that help German companies that want to go into markets where there is not yet a chamber to support them. There are also relevant websites. For example, our website has links that help other companies to explore the German market by providing information on whom to approach, on what to do, and on the main indicators for the specific sectors that they represent.
Our approach is that if companies are interested in working together, they will come together. They will get some initial support, and later they can use all the other tools that we provide. However, it is not our job to replace the business’s own initiative.
I am interested in finding out how you go about engaging businesses in Scotland. In other words, when you are aware—as you clearly are—of opportunities for Scottish businesses to operate in the countries with which you deal or that you represent, do you find that there is a clear line of communication? Cameron Buchanan expressed concern about a general lack of co-ordination, but in seeking to promote a market to Scottish businesses are you clear about how to identify and reach them in this country?
Yes. Approaches should be made not only to SDI but to chambers of commerce, particularly if you want to engage SMEs. After all, as far as SDI or the Swiss system is concerned, those are the businesses that we are talking about, because the big businesses have enough staff to be able to know the various markets.
It is important to go through business organisations and associations and focus on certain sectors. Such an efficient approach has, from my experience as consul-general, worked rather well in Scotland, where we have found business organisations to be open-minded and interested. We have also worked with trade promotion agencies. I see all this as matchmaking; we are simply bringing people and experts together and, as I said, my experience of matchmaking in Scotland has been good.
Eventually. When we were given the opportunity to tie up with Scottish companies, we thought that it was a great chance. It was virtually a blank cheque remit. It came from the Mongolian embassy in London, but we were given the chance to deliver it. We thought that we could work directly in Scotland to tie up with Scottish companies, and that that would be a shoehorn in for those companies, but it did not transpire in that way. However, we have since proved that there is willingness and interest.
To follow up on Rob Gibson’s question about the size that we think SDI should be, I do not think that the issue is about size—it is about the quality and knowledge of the staff in the organisation called SDI.
I like to think so. The trouble is that frustration builds up, and as soon as someone says, “Scottish Enterprise”, you think, “That’s another 11in cavity brick wall with nothing in the middle.” It can get very frustrating. The chap I mentioned earlier spent six months going backwards and forwards and eventually said, “I’ve had enough. I’ll just have to do it myself.” He got the private money that he wanted, as opposed to the 15 per cent he wanted from SDI, and went out to Mongolia. He returned a couple of weeks ago and will go back out again. That is the only way he can do it, because spending time going through all the paperwork and layers of government would just take it out of him. It is a frustrating exercise, as I found out to my cost. I used my contacts in Mongolia and inner China to try to effect trade as opposed to going through any recognised body.
I referred earlier to the arc of insolvency and the arc of prosperity. Those phrases were bandied around—they are not mine. The collapse of Scottish banks has had an effect on confidence. It has shaken foreign perceptions of Scotland as being forward looking, thrusting and entrepreneurial.
I think that the idea focuses on the USA, Canada and Australia and not on Hungary and Mongolia, which is why we cannot answer the question properly.
One particular possession of Scotland that could be used a lot more effectively by both Government and trading organisations is the Edinburgh festival—the world’s biggest cultural bash. I approached members of the present Government in Scotland about having a minister in residence in Edinburgh who could possibly act as a party giver and host for various events during those three weeks, but it did not seem to occur to them as a strategic input. The festival could be used as a remarkable attempt to get people involved in a diplomatic way. What are your views on that?
I had not thought about that particular aspect of the festival. A few practical details spring to mind, such as accommodation—Edinburgh is pretty full during August, and it would be extremely difficult to organise bringing a deputation from London or anywhere else, especially when people are often off on holiday. I am not trying to be negative, but I feel that practical difficulties could arise. However, if it could be well organised and properly structured, an open-door policy of some description should be encouraged. Anything that encourages people to come to Scotland and raises Scotland’s profile throughout the world is to be greatly welcomed.
I have a question. What representation will the Scottish Parliament have at St Andrews during the open golf championship?
I am sure that the Government, SDI, Scottish Enterprise and VisitScotland will all be present, but the Parliament will not be represented there.
But you are the member for the division.
I will be present, yes, but the representation will be from the Government rather than the Parliament.
I have crossed it—it is still working.
You could recommend co-ordination of all the bodies involved. There seems to be a lack of joined-up thinking as far as some of them are concerned. If you go to London, you may or may not be passed on to another body. In my experience, there is a lack of clarity.
Entrepreneurial experts should be represented on monitoring or support bodies such as SDI. Someone with a feel for commercial opportunities should be there to guide civil servants.
You should be more proactive and focus on SMEs and smaller countries. You do not have to help multinational companies, because they know what they want to do, have networks of offices and can use the services of PricewaterhouseCoopers and others. You should help small and medium-sized companies, because that is where your activity is really valuable.
Sometimes it is worth while to give such companies a guiding hand. You should not tell them what to do—they know what to do—but show them opportunities. You could point out to them that you are organising a mission to Hungary, for instance. A week beforehand, no one may have been thinking about Hungary, but 25 SMEs may take part in the mission and two or three of them may do some business or make an investment. You should focus on SMEs and particular sectors. In trade between Hungary and Scotland, you should focus on the food industry, the information technology sector, biotech and, perhaps, wine. Hungarian wine is really good.
If I may, I will decline to answer. First of all, I have no recommendations to make. We have few recommendations for ourselves for things that need to be improved. Secondly, I agree with what Reto Renggli said. As a professional consul, I would rather not give advice to my host Government.
If this committee is recommending to SDI how it might operate better in future, it is important to consider working with emergent countries and understanding that business is all about cash flow and that funding might not come from that particular nation but through the World Bank, the IMF or the UN.
There is a perfect example of a successful energy company, SgurrEnergy of Glasgow, which is backed by the Scottish Government, and is doing exceptionally well. Recently I asked Ian Irvine, SgurrEnergy’s managing director, if he had any cash flow problems in funding his initiatives. He said no, because in almost every instance the money comes from a large organisation such as the IMF or the World Bank.
Are the people at SDI aware that they could be channelling Scottish companies towards such opportunities? That is very important.
Thank you. I think that that concludes our questions. I thank you all for coming—[Interruption.]
I am sorry, Stuart; my apologies.
I agree that that is the case. Not many people know where Mongolia is, so it can be difficult, but I would have thought that, with a little bit of homework, SDI would have been able to focus on the mining aspects in particular. We are talking about the largest copper field in the world and, if it goes ahead, it will be like the middle east was 30 years ago once issues such as transport in China are sorted out. The Russians and the Chinese are desperately keen to get in there because of the copper, gold, silver and all the other natural resources.
Even a phone call to someone such as myself or Kenneth Stewart would have helped a great deal, and we would have said that we would be delighted to talk about Mongolia and give as much information as possible about what is needed and wanted and what sort of companies we are looking for. We could ask SDI about the companies it can help with and whether it knows about any mining companies, for example. The offshore technology will be the same as that used for mining—although the mining will be open cast—oil extraction and other similar industries. The thought processes that people will go through will be the same, so more interaction with Scottish Enterprise would be advisable.
To the best of my knowledge, the consular corps has been invited to only one meeting at Apex house in Haymarket in the past five, six, seven or eight years. That was for a general discussion with three members of Scottish Enterprise who gave a spiel. That was not adequate, especially as it was an open meeting. We would really like to have a one-to-one meeting with someone who can point us in the right direction or who will speak on our behalf to someone who will get back to us.
When I was at Apex house, I asked the speakers for information, but I regret to say that no information was received. That is another example of communication not getting through properly. I will not name names, but the people involved were at a reasonably high level. Perhaps they thought that they had better have a meeting with the consular corps just to tick more boxes. It was somewhat frustrating.
I am sure that SDI will pay attention to what has been said today. We can certainly put those points to SDI officials when they give evidence.
My second question is to Mr Mössinger regarding the German-British Chamber of Industry & Commerce. His written submission mentions that very few Scottish firms have joined that chamber, but he said earlier that, although there is no Scottish-German chamber of commerce, there is a German-Irish Chamber of Industry and Commerce and various such chambers in America. What might be the main obstacle preventing Scottish companies from taking part in the German-British Chamber of Industry & Commerce? Could Scottish companies establish a German-Scottish chamber?
We return to our inquiry into public sector support for exporters, international trade and the attraction of inward investment. I am pleased to welcome a panel of witnesses representing the consular corps in Scotland. Welcome to the meeting. We will have a round-table discussion, to give everyone the opportunity to contribute as they think appropriate. I invite each of the witnesses to introduce themselves and to make some opening remarks.
Kenneth H Stewart (Consulate of Mongolia)
Thank you, convener. I am the consular attaché for Mongolia.
I have submitted a letter to the committee, which I am sure members will have read. I would like to make a few brief points that will give members some background information about where we are coming from.
Our concern has been to try to have more trade missions from Scotland, especially Scots-sourced trade missions, as opposed to Scotland tagging on to London-based UKTI trade missions. We have received a letter of support on that from Dr Rabinder Buttar, who was Scottish businesswoman of the year and regularly goes on trade missions. She pointed out to me how successful the Scots are on trade missions and that she did not see why the Scottish Parliament or the Scottish Executive could not have more say on having more Scots-sourced trade missions.
My main concern is Mongolia, of course. We have seen opportunities there that the Scottish Government and the Scottish Executive have missed. The population of Mongolia was around 4 million, but after the break-up of the Soviet Union its population dropped by 1.2 million within two years as the technocrats from Russia returned home. That meant that there was a great lack of expertise and professionalism in Mongolia. A gap was created, and opportunities were created for those with the presence of mind to take advantage of them.
Mongolia is backed by the World Bank and the International Monetary Fund, which are considering large projects that can bring benefits to it. Funding is available for the right initiatives. The country has perhaps the richest untapped sources of minerals in the world. It has everything from copper and gold to coal and oil, and also timber and forestry, so there is vast potential in what are frontier times for Mongolia. Over the next few years, opportunities will be offered to contractors and enterprising nations to take advantage of that.
Through the embassy in London, we received a letter that highlighted Dornogobi province, which has all the minerals to which I have referred. People there were looking to tie up with Scottish companies to see whether they would work on joint ventures. Their unsophisticated way of doing things included a suggestion of a twinning arrangement, although the kind of twinning that we around this table would accept was not meant; rather, they were looking for a consensus of minds where there were joint venture opportunities.
The consulate in Scotland was invited to approach Scottish companies and give them the opportunity to get on board at the start—not in a tender situation, but in an appointment situation—to consider the range of opportunities and see whether they would be interested in them. We wrote to the Minister for Enterprise, Energy and Tourism to offer that, and received a letter back from him. I will sum up the reply. He said that the second function of Scottish Development International is
“to help Scottish companies do more business overseas”,
but that
“The SDI office in China has no explicit remit to cover Mongolia ... Mongolia’s economic situation and industrial structure might only provide limited opportunities for Scottish companies in the immediate future. Therefore, we are doubtful that a twin link between a Scottish region and Dornogobi is worth pursuing.”
We did not ask for such a twin link; we just asked for an opportunity to give background information and find areas of mutual opportunity.
We wrote back, stating:
“we are disappointed that our point of contact appears to be based in China.”
At the end of the letter, there was a Chinese telephone number, which, as far as we were concerned, was as much good as a chocolate fireguard. We decided to go on our own and approach the university-linked companies and other enterprising companies in Scotland. We wrote:
“The object of the exercise was to meet up, explore common ground and opportunities for Scottish companies and then to form a tight strategic alliance to deliver business for Scotland ... Sadly, it appears however, that despite UKTI enthusiasm for such an initiative, there does not appear to be the same level of understanding within the Scottish Parliament and its officials. Consequently, we will pursue this opportunity ourselves through the Scottish Universities and their spin-off companies, concentrating on education, solar, geothermal and targeted mining opportunities. In so doing, we will create the required platform of interest and advancement, without Scottish governmental inclusion.”
That was disappointing for us. However, we made those approaches and, I am delighted to say, the response from the university-linked companies and from industry in general was tremendous.
Following the demise of the Soviet Union, America started to invest heavily in Mongolia and English became the second language in the country. Mongolia is strategically placed between Russia and China, and the USA obviously had geopolitical aspirations in that area. The important thing was that the USA started to throw money at Mongolia, as did the World Bank and the IMF. They saw the opportunity in Mongolia, but we obviously had problems. We recognised a lack of political overview or direction from SDI, and we were confused. SDI seems to be an amorphous organisation—we do not know to whom it is responsible, who its chief executive is or what its remit is.
We were further confused about SDI’s role. I sit on the cross-party group on Palestine, among whose members there is a unanimous feeling that Scotland should be careful in initiating business with Israel and Palestine during the delicate and sensitive United Nations negotiations that are going on around potential war crimes and all sorts of acts. Notwithstanding that, SDI ran a trade mission to Israel, which created a great PR opportunity for Israel. We were concerned about SDI’s remit.
SDI responded to us, saying that the Scottish Government and SDI are interested in engaging in dialogue with any two nations that can lead to solutions, but that was too open-ended for us. There must be excepted nations that Scotland should be careful about doing business with. Are there no sensitive global hot spots when dealing with potential rogue nations? Dealing with them does give them credence. Trade networking and Scottish Government-backed recognition at this time are a political PR coup for Israel. Does Scotland not recognise and support the UN resolutions and the overwhelming global support for bringing Israel into international alignment? Are there no political checks and balances, and is no advice on such matters given to non-governmental organisations such as SDI?
Thank you, Mr Stewart. Do you want to add anything, Mr Murray?
11:15
Cameron Buchanan (Consulate of Iceland)
I understand that you want a short introductory statement from us before we move to questions. Is that right?
Yes, carry on.
As the committee knows, Iceland was in the arc of prosperity but is now in the arc of insolvency, so it is necessary for it to have trade missions. Icelanders are very keen on trade missions, because that is the right way to go about restoring their balance sheet and their credibility. Iceland is very close to Scotland geographically, ethnically and in how its people think, and it is keen to receive trade missions. It has been in the papers that I have tried, without great success, to get a trade mission to Iceland. The Icelanders’ only requirement is that any such mission must be fairly high powered. In other words, they would like a minister or a senior official to be in charge of it.
I have led trade missions to Japan, Korea and Sweden on behalf of what was the Board of Trade, but which is now UKTI. Those missions always had on them an official or a minister from the Government—it might have been a low-ranking person in the Board of Trade. The problem with the trade missions that are being launched in Scotland is that there seems to be a lack of co-ordination. Iceland is extremely keen—I will not say that it has insisted—that a trade mission be led by someone such as the First Minister, because that would make it high powered and would ensure, in a small country such as Iceland, that it got huge press, television and radio coverage. That would not happen if it were led just by the consul or another business person. Trade missions are important to Iceland.
A more general point is that, as a businessman, I find the number of organisations that are involved in promoting international trade muddling. There are too many organisations in Scotland that are trying to do the same thing, and they do not appear to be co-ordinated. Six months after hearing of an SCDI mission to X, we hear that SDI or the UK branch, UKTI, is to run the same mission to the same place. The chart in the committee’s papers lists Scottish Development International, VisitScotland, Scottish Government initiatives, Scottish Chambers International and the Scottish Council for Development and Industry. I submit that there are too many international trade organisations. I think that SCDI and SDI should be put together. People do not understand the present set-up. Scotland is a small country that can be compared to Austria or Iceland, for example. Austria, which I know well, has two organisations for external missions. Iceland, which has a smaller population of 300,000, has one. It is a trade organisation that is co-ordinated to promote trade bilaterally.
When we have trade missions, they should be publicised and should have some momentum. We should not have too many of them, nor should they be too multisectored. As someone who has led trade missions, part of the commentary that I have received is that they need to be a bit more specific. They should not be too wide or too generalised. We do not want to have just three people from three companies in three different sectors—widgets, textiles, which is my area, and jewellery, say—on the same mission. There should be four or five textile companies, four or five jewellery companies or four or five widget companies. We need a more concentrated approach. It is difficult to get people to visit a trade mission—or to hold it, unless it is a scatter mission—if there is no concentration. Very often, trade missions are too multisectored. SDI might say that a mission was extremely successful because there were 19 companies on it, but those 19 companies might have been promoting 15 different items, whether in the hotel business or whatever. From my experience of leading trade missions, I have found that that approach is not terribly successful.
Péter Horváth (Embassy of the Republic of Hungary)
I am the economic investment and trade commissioner for Hungary. I have just arrived from London—I thank you for your invitation. I have written a letter to the committee that I hope will be of help to you.
When we talk about two medium-sized countries like Scotland and Hungary, we have to put a couple of things in focus. Obviously, multinational companies generate most of our exports and imports, so if we want to help our companies to generate more exports or imports through foreign trade, we must focus on small and medium-sized enterprises.
Scotland and Hungary are partners on the one hand and competitors on the other. We would like to generate more trade and consider how we can generate exports. We can do that by leading trade missions and opening offices in each other’s countries. We have a consul general here in Scotland; we do not have our own office, but we have a part-time consul working for us. Because of his good work and our efforts, we are able to lead many missions to each other’s countries. We arrange trade opportunities and seminars in Scotland, and exhibitions are also a part of the job.
It is difficult to convince companies to focus on small or medium-sized countries, because companies—especially SMEs—often want to focus on big markets where demand is enormous. It is difficult to convince companies on our side, and perhaps on your side too, to visit each other’s countries.
My colleague Reto Renggli mentioned trade statistics. I wanted to check out the statistics for trade between Scotland and Hungary, but they are not easy to find. We use UKTI to get statistics, but the data do not represent reality, because most of the trade that is conducted between our two countries is carried out by intermediaries.
I will point out one more thing about representation in each country. SDI in Budapest works through UKTI, which focuses on income. In practical terms, when a Scottish delegation visits Hungary, it asks the local Budapest UKTI office for help with providing water, arranging meetings, office-based communications and so on.
My agency, the Hungarian Investment and Trade Development Agency, or ITD, has a limited budget, but if we help our companies we generate trade; from that trade we increase our gross domestic product; from that higher GDP we increase tax revenue; and from that higher tax revenue we might end up with a better budget. We ask for money for certain services, but not basic services. That might be something to look into.
11:30
Thank you all for those opening remarks, which highlight some contrasting views on the relationship between the public sector agencies in Scotland and your consulates and Governments. I have a general related question. Do you think that Scotland does enough to identify opportunities for direct investment by Scottish companies in the countries that you represent and to identify opportunities for trade with and export to your countries? Does Scotland do enough to identify opportunities for companies from your countries to invest directly in Scotland? Can and should Scotland do more?
I will start this time. Of course you can always do more. It depends on the input that you are prepared to make in, for example, an office in Düsseldorf. The more people you have there, the more opportunities would arise, because those people would travel around, visit companies, answer questions and do research on the internet and in various publications to find opportunities. If you have a small office in Düsseldorf and you cover a big area, the main things that you can do are react to requests and be proactive in spreading information. You cannot expect a few people who cover a dozen countries and huge territory to see everything.
We Germans still have a lot to do to discover more opportunities for German companies in Scotland. The problem is that most companies look at the United Kingdom as a whole and then start conquering the market, as it were, from the main population centre—London. Of course, there are considerable exceptions to that rule, such as the companies that are active in all kinds of green energy production, which see the potential in Scotland. We have a few companies here in Scotland that are active in marine technology, wind energy technology and so on and which trade here. Those companies have discovered that potential on their own; they do not need anybody to guide them or tell them that there is wind in Scotland and water around Scotland that could be explored.
Within the EU and the common legal framework that it represents, the typical trade mission and the typical economic attaché’s job in embassies is not required. We do not need to open any doors to anybody from a legal perspective, advise on legal issues or explain what the market is like. Within the EU, that is absolutely not necessary any more—at least in my experience. For our companies, the language problem does not arise. However, it does arise the other way round. At several meetings and in face-to-face conversations, I have noticed that there is a reluctance to explore markets in countries whose language you do not speak. I have noticed that smaller companies might say, “It might be good to go to that trade fair, but I couldn’t talk to anybody.” I always say that Germans usually speak English quite well and ask why they do not find somebody who can speak German well enough to represent them at those fairs. That obstacle needs to be overcome. However, there are a few good examples: at the meeting in the Borders there were a few companies that are already active in the German market, which told their peers that their fears were not really justified.
I just want to stress that not all witnesses have to answer every question if they do not have anything particular to add, but feel free to do so if you do.
I would like to start off with the point that a country of 5 million people with a Government that is attempting to promote business abroad finds itself with exports to Asia amounting to about 9 per cent of its total exports at present. Mr Murray has talked about how Mongolia is a small part of that. What size ought SDI to be, given that you have heard from countries such as Germany and Switzerland that chambers of commerce and so on are very important for making contacts? The answer to that question is not clear yet; we have to solve how SDI as the Government body, and the business organisations themselves, make direct links.
I think that you have made that point. Others in Europe have said that the whole of Europe east of Germany is dealt with from Düsseldorf. Of course, there is not so much of a time difference problem there. This is a small country and SDI is in strategic places. Would the person in Shanghai not have an answer for you?
We tried to get hold of the person in Shanghai and failed.
So you are saying that the organisation has failed you.
They would not be anonymous if I had the author.
We are talking about foreign representation and foreign offices of investment and trade development agencies. Opening an office is expensive. I understand that having an office in Düsseldorf or Shanghai costs a lot, but employing a part-time consultant does not cost a lot and makes a considerable difference. Opening an office requires—I do not know—about £100,000 annually. That depends on whether a secretary, a car and a flat are needed and on the cost of insurance, for example. A part-time consultant costs peanuts and makes a difference because they mean that the country is represented and that someone takes care of the business. If someone is present, that generates interest—the gentleman will go to exhibitions. As is obvious, I cannot come from London to the BioDundee and all-energy conferences or all exhibitions, but when important exhibitions take place at which it is worth while to be represented, I ask Ian Traill to check them out and to make business contacts. That helps.
Many of my colleagues have talked about the language barrier. We cannot have a language barrier between Scotland and Hungary because the University of Glasgow has a centre for Russian, central and east European studies. Anyone who would like to learn Hungarian can go there. Richard Berry is the centre’s director.
You say that you have an agent in Scotland. Does he work for you part time or full time?
I can only agree, although I happened to meet the British ambassador from Berlin at the SDI office in Glasgow a few weeks ago, which shows that he is interested in what German companies do in Scotland and what Scottish companies can do in Germany. SDI had prepared the visit for him, and the schedule, and it was a positive experience.
12:00
I do not think that there is a need for embassies in the EU to support businesses in the classical old fashioned way any more. Because there are more embassies and consulates in the world than trade missions or trade offices, we can observe what is going on. For example, the green energy revolution that is well ahead in Scotland is still not very well known in Germany and in that respect we can all do the same job. SDI can advertise for Scotland; the British embassy can advertise for the UK and Scotland in particular; and we can interest German businesses in what is going on. Indeed, that is what we do. However, that is about it; the rest is up to the companies themselves.
The situation is completely different in third world countries. As I said before, initial support will always be necessary if the other side does not have enough capacity to support, say, a local chamber of commerce.
I echo Cameron Buchanan’s comments. However, I get a bit worried about the downgrading of embassies throughout the world, especially with all the cuts. Very often, larger countries have to look after other countries’ interests. That does not work very well, particularly with trade missions to countries that are not properly represented by a British embassy.
If I understand you rightly, in the case that you described, the place that you went in the public sector to find those contacts was SDI.
I have a couple of specific questions, the first of which is for Mr Murray and Mr Stewart. Are there obvious opportunities in Mongolia on which Scottish companies or sectors are missing out?
Cameron Buchanan talked about the sectoral approach to trade missions. We have received about 40 items of written evidence. Like you, some people said that sectoral trade missions are the way to go. Others have been critical of sectoral approaches. One person said that, in their experience, 10 or 12 people from the same sector go on a mission and there might be only three or four potential buyers there, so the 12 people end up swarming round those three or four buyers to make a sale. His view was that that did not look or feel right—everyone lost out. Others spoke strongly in favour of sectoral trade missions, as you did. In your experience, is there some middle ground that would make the ideal trade mission, or do such missions always have to be either sectoral or general? What do you recommend?
In the past couple of years, we have seen the eclipse of Scottish banking as a multinational business run from Scotland. Has that had an impact on the representation of Scotland abroad in other trading areas, or was the banking system so much a concern of itself that its remarkable change has not had a knock-on effect?
I can answer that quickly by saying that the Icelandic banks have had rather more problems than the Scottish banks.
That is especially the case if you consider the nature of the Scot abroad, who is well respected and well thought of. A Scottish person or company is perhaps given more credence than an English-based company, because of the nature of the country that we live in and the type of people that we are.
I might be saying something politically incorrect, but in Germany the collapse of the banks has not been perceived as a particularly Scottish problem; it has been perceived as a British problem, and as representative of an Anglo-Saxon approach to business and regulation. From that point of view, I do not think that Scotland has suffered more than the UK as a whole. I do not think that an ordinary German would understand that the S in RBS stands for Scotland—although they can now see it everywhere at Frankfurt airport, because RBS is the main advertiser there. I do not think that there is a particular problem that makes the situation worse for Scotland than it is for the UK as a whole.
12:15
The other organisation that I want to ask about—and which Mr Renggli was positive about—is the globalscot network that was set up by Scottish Enterprise. It involves asking people in different parts of the world who are more or less notable and have a Scottish connection to subscribe to a network. I think that it has been positive for Mr Renggli; what are other people’s thoughts about it?
All I can say is that a piece of information that always feeds back from UKTI trade missions is that it is a distinct advantage to be a Scot.
I cannot say anything about the globalscot network—I have no experience of it.
I am not in a position to judge globalscot as an organisation, but for me it is about networking, which is human and depends on the individual. The network organised a conference in Switzerland last December, involving SDI, to present Scotland and different markets in Scotland, and I was surprised by how many global Scots are sitting in highly important positions in Switzerland. You have board members of ABB and of big banks. The network should not be underestimated, although a network is always what its members make out of it. From my personal experience—which is limited—I was very impressed.
It would be worth encouraging that.
Sorry—I was using the word “parliament” in a general sense. I apologise.
There will probably be more movers and shakers at St Andrews than there will be at the festival.
I have two quick comments to make. First, when I give a presentation about tourism and culture, I always tell the delegates first to visit Hungary as tourists and then to return as investors. There is a connection between tourism and culture and business. The beautiful Hungarian town of Pécs is this year’s cultural capital of Europe, and you are welcome to visit it.
My second comment relates to Scottish engineering and transport. I recall that the architect of the first bridge in Budapest, the chain bridge, was Adam Clark, a Scotsman. We still remember that, although the bridge was constructed in the 1830s.
This morning’s discussion concerns support from public sector agencies for exporters. This morning we have heard differences of opinion on how the system works. We have heard from Kenneth Stewart that we are working in a cluttered landscape. What key recommendation could we make to the Government to improve public sector support for exporters?
The simple answer is no.
I go back to what I said before. Scottish Enterprise made the point that the company to which I referred
“has an extremely high degree of dependence on sales.”
To me, that shows a lack of understanding of the commercial world.
I put the same question to the other witnesses. What recommendations should we make to Government to improve its support for exporters?
I think that the main obstacle is that Scottish companies do not see the advantage of paying the membership fee because they might not need the services that the chamber provides. I cannot judge whether or not that is right because I do not know what their needs are. The main service that the chamber of commerce could provide to Scottish firms is knowledge of the German market. Chamber members can tap into all of its networks, knowledge, market research and whatever. Of course, lots of that networking happens through events and if people in Glasgow or Aberdeen constantly receive invitations to events in and around London, they might wonder what advantage they gain from paying a membership fee to an organisation that constantly invites them to London. That might be one of the main obstacles that stops Scottish firms joining the chamber in London.
On why there is no German-Scottish chamber, I think that there would need to be a big number of German companies to start that up. If two or three dozen Scottish companies that have dealings in Germany decided that they wanted a closer network among themselves to talk about their issues with Germany, they would not necessarily decide to set up a German-Scottish chamber of commerce as a first step. They would need a big number of German companies that wanted to join. As I said, the London bubble is sucking in time, capacity and interest.
The problem is that big German companies, which usually carry the chamber of commerce with their big membership fees, hardly ever conceive of marketing campaigns that are specific to Scotland and are not UK wide. They do not seek trading and business partners specifically in Scotland. Big motor companies such as Mercedes-Benz, BMW and others have their central offices in London. They have regional offices all over the UK, but they do not see the need to take a specific Scottish-German approach to their business. Retailers such as Aldi and Lidl are organised on a UK-wide basis, so they see no need to support a specific Scottish approach to their business. Those are the main obstacles that prevent the establishment of a German-Scottish institution.