The former boss of Scottish Enterprise has added another jewel to the nation's IT crown, writes Bill Magee
CRAWFORD Beveridge may not have exactly experienced a feeling of deja vu during his latest trip back home to Scotland, but certainly a strong sense of irony was not lost on the technology veteran during a visit to Silicon Glen.
As a climax to the visit Beveridge and executive colleagues from computer networking giant Sun Microsystems enjoyed a banquet in the Great Hall of Edinburgh Castle, hosted by the First Minister Alex Salmond who finished off the evening by showing them Scotland's Crown Jewels.
Earlier in the day, Beveridge had been accompanied by Alain Andreoli, Sun's global sales and services president, to open its much-prized European briefing centre at Linlithgow, which will be bolted onto the company's 20-year-old operation in Scotland.
The only other centre of its kind is at the company's Silicon Valley headquarters in California. In Scotland, Sun remains a survivor of a depleted Silicon Glen – the Central Belt corridor between Glasgow and Edinburgh – which during its halcyon days was often described as housing Scottish electronics' own much-prized crown jewels.
But Beveridge prefers to look to the future and says there is much to crow about among those in the sector that are now undertaking higher value work. He repeats the oft-quoted concern that the country still tends to live off its stereotypical images whilst its innovative technology is overlooked. "People know about our whisky and golf but they don't know so much about how Scotland has some interesting technology here along with expertise in our universities," he says. "It is crucial to keep putting out the message that Scotland represents a place where business can do business, to get people comfortable about the place."
Landing the European briefing centre for Scotland is undoubtedly a feather in Beveridge's cap, but he is typically modest about the development. "It was a team working for me that carried out an evaluation of various sites and I was delighted when they chose here. I give Hugh Aitken, who runs the Linlithgow operation, full credit for looking at the effects of globalisation and working out the best way forward for the site. He's the architect of moving it away from a manufacturing plant into a more integrated operation, one where the great relationships Sun enjoys with universities have not been lost.
"The end product is that Sun, along with IBM and some others, are the survivors in a quite different Silicon Glen, because they've adapted to changing global economic times."
A lot has changed since the 1980s, when Scotland accounted for one-fifth of the UK's total inward investment projects, and into the Nineties by which time Beveridge had become first chief executive of the country's economic development agency, Scottish Enterprise.
He nurtured the organisation through its early years, developing programmes such as commercialisation of university research and the business birth-rate strategy. The former remains a work-in-progress while the latter proved largely unsuccessful in that it fell short of its targets. However, it has evolved into more clearly focused thinking about how to stimulate those Scottish companies with the potential for growth. As for the electronics sector, Beveridge has remained a vital link between Sun's Santa Clara headquarters and its operations in West Lothian which typifies the current SE policy of driving the country up the value chain.
Beveridge's return to California in 2000 coincided with a downturn in electronics and in the availability of footloose electronics plants. The Glen began shrinking as inward investment dried up and assembly work moved to cheaper locations. In recent years 15,000 jobs have gone, the equivalent of to up to a quarter of its peak, as the multi-nationals, such as Hyundai, Compaq, Chunghwa, NEC and Motorola, upped sticks.
Beveridge, who had stints at Hewlett-Packard, Digital Equipment Corp and Analog Devices, has witnessed at first hand the changes that have taken place over the last 25 years and was to become a key interface for the industry and government. He joined Sun for the first time in 1985 until 1991 when he chose to take up the Scottish Office's invitation to head up the newly-formed Scottish Enterprise which was born out of the ashes of the Scottish Development Agency.
It was a period of mixed fortunes, with Beveridge setting about establishing SE's credentials for continuing to bring in big job-creating multinationals while being at the forefront of changing an economy that needed radical surgery.
Exactly how much he achieved is difficult to judge. He was credited with building policies around ideas – such as commercialisation – that are still doing the rounds, but by the time the big inward investments dried up Beveridge had returned to California and the private sector with a key position at Sun, leaving his successors at SE to pick up the baton for developing Scotland's economy.
He now has one of the biggest jobs, and certainly one of the biggest titles in the company as executive vice-president and chairman for Sun's operations in Europe, the Middle East and Africa (EMEA) plus APAC (Asia, Pacific and Africa) and the Americas. His principle role is to work with governments on emerging technology policy.
The Scot still finds time to be a member of the international board of advisers to Scottish Enterprise, and although his home is on the west coast of the US he has just bought a property in Edinburgh. The rumour mill has it that he is being lined up as the next chairman of Scottish Enterprise when Sir John Ward steps down in the spring.
In the meantime, Beveridge makes no apologies for lobbying strongly for Linlithgow to be the site for the new briefing centre, where it joins the assembly and testing operations and a software solutions centre. This latest addition will help anchor Sun to the site as it will attract senior international decision makers to view the latest technology without the need to travel to California.
More than 400 executives, academics and policy makers from all over the world, representing both the private and public sectors, are expected to pass through the European hub at Linlithgow in its first year.
"From now on they will not have to travel out to California to see, touch and interact with the very latest technology developed by Sun," he promises. "At Linlithgow they will be able to experience, first hand, the most recent innovations in software to the most advanced server and storage products and how they can be applied to their business."
However, if Beveridge thought that moving back into private industry would provide a soft landing, he could not have been more mistaken. Sun's profits fell 73% in the most recent business quarter, as slumping sales to big American companies, spending cuts and reorganisation charges weighed heavily on the IT multinational's results. It earned $88m in the quarter, compared with $320m in the same period a year ago.
Since May, the company has instigated plans to lay off between 1,500 and 2,500 workers in a bid to lower its costs over the coming year. It has also revealed plans to expand its stock buyback programme by $1bn, a sign that Sun believes its shares, which have fallen by 50% over the last nine months, are undervalued and poised to rebound.
This belief is supported by a contrasting picture of the company's operations outside the US. Beveridge points to Sun EMEA, which has enjoyed 11 consecutive quarters of year-on-year growth, and contributes more than one third of the company's total revenues, totalling more than $5bn. Europe alone has had seven straight quarters of growth.
"The fastest growth has been in the emerging territories like India and Latin America and some parts of Asia, with the next best here in Europe," he reveals. "The most difficult area Sun has encountered has been in the States, as you would expect, as our business profile there is to the banks and big finance houses and we all know what a state they are in at the moment."
Additional reporting by Terry Murden