Chamber and committees

I always think that there are two perspectives on economic success. There is the perspective that, if we just pick a couple of big winners, that drives national GDP growth, which looks really good but hides all the social challenges, such as the communities feeling left behind and the disenfranchisement. The other perspective is the ground-up approach, through which we want to ensure that all parts of Scotland are economically prosperous, which, inevitably, drives GDP growth.

GDP growth remains a useful indicator, but, if we are not comparing it with the other statistics at our disposal, we do not know whether it is just masking a lack of economic prosperity in communities. We have seen that in the past, when communities got left behind but the national figures still looked okay. The national figures would have been a lot better if we had not left communities behind, so I do not think that it is an either/or situation—it is a both/and situation. Those that focus only on national GDP figures, to the exclusion of other figures, do themselves a disservice. Those that look only at the local figures, without understanding how they are driving the national figures, also do themselves a disservice.

I will ask Aidan Grisewood to speak to the metrics. We have metrics on that.

I will happily do that. I assume that the enterprise agencies were also fulsome in expressing how much financial support they have given to defence companies in the past few years. If memory serves, Scottish Enterprise and Highlands and Islands Enterprise have given £45 million of financial support to companies in the defence sector.

The First Minister announced the policy a couple of weeks ago—it is only a few weeks ago; I do not know when you heard evidence from the enterprise agencies, but I imagine that it was quite soon after the announcement. The policy applies

“to new grants provided, or investments made, by Scottish Government”,

Scottish Enterprise, Highlands and Islands Enterprise, South of Scotland Enterprise and the Scottish National Investment Bank. It applies to named countries, which are determined by ministers in reference to objective international legal processes—specifically, where the International Court of Justice has indicated provisional measures under the United Nations Convention on the Prevention and Punishment of the Crime of Genocide or where the International Criminal Court has issued arrest warrants for related acts. Currently, those countries are Myanmar and Israel.

The policy as defined above will apply only to companies whose products or services are provided to specific, identified countries, either directly or through known indirect relationships, such as distributors, intermediaries or broader supply chains. The policy does not apply to companies whose goods and services end up in those countries without their knowledge. It applies to the full global footprint of a defence company and all associated activities.

That is the technical detail of the policy.

The policy does not apply to supply chain companies. Working for companies that have links to identified countries, where the subcontracted project is not intended for use in those countries, is not restricted. That is why it all comes back to the need for the company itself to declare that, to the best of its knowledge, Israel is not the intended destination.

I think that one of your colleagues did that, too.

I think that we are doing a really good job, from an economic perspective. We bring all the functions of different parts of Government under one umbrella of team Scotland when it comes to economic decisions, and that creates a tried and tested approach to collaboration.

We could always do better, however. Committee members have quite rightly asked questions on gender data, climate change, productivity and different sectors. The challenge for us is always to remain as focused as possible and to prioritise the areas that we think will make the biggest impact.

In a political world, there is always something new to get excited about. In this role, I have tried to keep going back to our core objectives and focus on them. That makes it much easier to drive collaboration. For example, skills is one of the areas that businesses always want to talk to me about. We can always do more on skills but the skills and education sector will be dealing with other objectives, not just the ones that the businesses that I represent have.

What we have seen with this particular audit is that the public sector is very involved, which is encouraging. We will take that point on board.

Yes. I have had a lot of conversations about the big asks from the business industry with Ben Macpherson’s predecessor, Graeme Dey, during the production of the workforce data audit, which I just talked about. I am looking forward to picking up those conversations with Ben Macpherson. So, yes, there is a big focus on flexibility. We have seen some evidence of it, for example, around the Clyde maritime cluster, where Glasgow College has been absolutely brilliant in supporting industry ambitions. However, it would be good to see that right across Scotland.

There are a lot of questions in there. Let me start with the high-level perspective, which is that the enterprise agencies have never been as strong as they are right now. I say that on the basis of hard, cold data and evidence.

If we look at Scottish Enterprise’s results during 2024-25, for example, we see that it delivered the highest-ever level of planned international sales, reaching an unprecedented £2.46 billion, which is a 20 per cent increase on the previous year. If we look at some of its other statistics, we see that it has achieved 15,000 new and safeguarded jobs, £442 million in business innovation investment, £1.16 billion in business capital expenditure—the second highest on record—and £367 million in growth funding leverage. That is just Scottish Enterprise. I will not go through the data for the other enterprise agencies and the bank, because that would take some time.

My point is that the figures, which we analyse closely, are extremely strong. That is what I want to see. I want to see what our investment in those enterprise agencies is delivering for Scottish business.

I will make a second point, because the convener asked about collaboration. The committee might recall that, about eight or nine years ago, there was extensive public discussion about whether the enterprise agencies and the skills landscape at that time—this was prior to the bank existing—should be brought into one loose organisation. The committee might recall the enormous backlash to that. That, I think, has delivered far more independent and results-oriented enterprise agencies than would otherwise be the case. Highlands and Islands Enterprise, in an area that I know closely, drove the push against any enforced collaboration from Government.

HIE is doing sterling work, and not just on delivering the economic outputs—I could go through the data on that. It is also being a leader in the Highlands and Islands economy by bringing together all the different elements that drive economic growth and prosperity in the region. In collaboration with partners, it has quantified the scale of investment over the next 10 years at £100 billion in life sciences, energy and so on.

I am particularly interested in your question, convener, because of your interest in local government reform. On a number of occasions, you have put to me questions about mayoral authorities and local government reform more generally. My argument is that, ultimately, it comes down to strong leadership. What you see in HIE and South of Scotland Enterprise, in particular, is strong regional leadership that is delivering what you want to see from the mayoral authority model. I have answered that in two ways. I have talked about Scottish Enterprise’s strong results and about local regional leadership.

I will make a final point, which is that there is still a need for collaboration. Since coming back into government, I have been driving collaboration around the particular outcomes that we want to see. We have taken the question of attracting investment and, every quarter, I get all the chief executives—from the enterprise agencies, the bank, the Crown Estate and the Scottish Futures Trust—in a room to go through the structures in which they operate together, as well as the investment approach that they take and where the collaboration is. In the past year, in particular, I have been driving that collaboration really intensely so that they can demonstrate that they are working together more closely.

On attracting investment, we should not forget the office for investment, which international investors often engage with at United Kingdom level. I am pleased to say that the drive for collaboration across the enterprise agencies has pushed me to take a proactive approach with the UK investment minister. I have not met the new one, but I had a very good working relationship with Poppy Gustafsson and the office for investment in relation to ensuring that, when a business is trying to engage with the public sector, it has one gateway and finds that everything flows from that, with a process that is as streamlined as possible.

That might come down to a question of presentation, because, by and large, my view is that the enterprise agencies are reporting on the same metrics. For example, you can see the figures on planned international sales for the different enterprise agencies. There are two caveats to that. First, SOSE is at a different point in its life cycle; it is relatively young and is still choosing where to focus its attention, but it already has impressive statistics. Secondly, coming as it did out of the Highlands and Islands Development Board, HIE has always had a big social focus; there is still funding that goes through HIE into local development officers, for example, to a much greater extent than you would ever see in Scottish Enterprise, for very obvious reasons. It is important that there is still some regional variation.

On the presentational point about bringing together key metrics such as planned international sales, investment and innovation, there are quite a number of overlaps in the metrics. I will ask Colin Cook to come in on that.