A Scottish Parliament report published today warns that Scotland’s performance in export markets and attracting inward investment is becoming increasingly patchy, and not enough businesses are seeking advice from public sector bodies.
The Economy, Energy and Tourism Committee’s international trade inquiry report said there is a need for the country’s trade and investment policy to focus more on increasing the number of firms, especially smaller ones, which are prepared to grow their business in export markets.
The report is calling for Scottish Development International (SDI) to update its strategy and services to focus more on increasing the number of firms that see exports as a route to success.
Committee Convener Iain Smith MSP said: “Scotland is slowly coming out of recession, but is lagging behind some other economies, such as Asia, so now is a good time to tap into growing overseas markets. Our report is particularly timely given the increasing constraints on public finances.
"While Scotland has a good track record in export markets across a number of sectors, such as oil and gas and whisky, overall performance is inconsistent. We have to make a step change in our performance and increase the number of firms that see exports as a route to future growth."
Figures from Ernst & Young show that the volume of manufactured exports has fallen 30 per cent in the last decade and Her Majesty’s Customs and Excise statistics reveal that only 5 per cent of UK exporters are based in Scotland, comparing poorly to the fact that around 8 per cent of all VAT-registered firms in the UK are located here.
Key findings and conclusions of the report
- Public and private sector initiatives supporting international trade and inward investment should be better joined-up and co-ordinated. SDI should take the lead in working with other bodies, such as the Scottish Council for Development and Industry and Scottish Chambers of Commerce. However, SDI should follow the ‘Heineken Model’ and seek to provide principally those types of services that others do not. It has to focus its efforts and scarce resources where it can make the most impact.
- Scotland needs a bigger global footprint and SDI should provide more help and advice on the ground across a wider set of countries to Scottish companies and to inward investors. SDI and the Scottish Government should establish a bigger network of "trade counsellors" overseas. Given constraints on public budgets, the core principle behind the expansion of SDI’s overseas network should be a ‘maximum coverage for minimum overheads’ approach.
- The Scottish Government should take action to improve the economic advantages that Scotland offers to attract new talent and business, for example, a skilled workforce, education and transport infrastructure.
The international trade inquiry looked at the strategy and support measures that are in place from a range of public sector organisations, such as Scottish Development International, to boost exports and attract inward investment. It also examined whether initiatives provide value for money.
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