Embrace the opportunity Hong Kong gives small firms

Hong Kong presents an opportunity for Scotland to continue its claim to the title of the worlds inventor. Picture: Getty

It’s very encouraging to hear that Scotland had a record-breaking year in 2014, attracting over £433 million in foreign direct investment, with the help of development agency Scottish Development International (SDI).

We all like to believe that despite its relatively small population Scotland is an important and influential nation and one worth investing in. Like many, I enjoyed our First Minister’s performance on US TV’s Daily Show recently. Her confident assertion that “Scotland almost invented the modern world” built on our innovation was sarcastically rebuked by the excellent Jon Stewart: “Yes, any look at world history and Scotland is the first country mentioned.”

The reality is that Scotland performs well above average in the generation and citation of new research and the registration of new patents but tends to underperform in the application, commercialisation and ownership of these ideas. This means other countries often benefit economically and socially from ideas and innovations “Made in Scotland”. Clear examples of this can be seen in the low carbon sector, where early stage research in wind energy, geothermal energy and heat pumps was all developed in Scotland, but exploited more effectively outside our territory.

Meanwhile, the Scottish Government and its enterprise agencies are increasingly focusing activity on accessing international markets and the food and drink sector, in particular, is hugely dependent on exports. I recently attended an excellent conference held at RBS Gogarburn organised by the Asia Scotland Institute called the Century of Asia. In his keynote speech, Ken Barclay, Chairman of RBS Scotland, mused that if the 50 current Food & Drink exporters stopped exporting, Scotland’s export activity would almost cease. He was making the point that sector diversification is essential for Scotland’s sustainable economic security and growth. With China boasting three quarters of the globe’s population, an increasingly progressive low carbon policy framework, and hotly tipped for the title of world’s largest economy, Asia is not a bad place to prioritise for would-be exporters.

Yet it’s no wonder so few enterprises, and especially small and medium-sized enterprises (SMEs), successfully sell abroad: exporting is hard work. SMEs have limited time, resources and networks to dedicate to the significant task of exploiting international opportunities. What’s more, there is often a significant time lag between opportunity and financial reward, as well as the challenge of different cultural, business and legal practices.

However, recent research concludes the low carbon sector has significant export potential. Combined with Scotland’s established position as a leader in low carbon policy and innovation, this market presents a real opportunity for “Scotland plc”. The sector bucked the recession trend and continued to grow, with some excellent examples of innovative Scottish SMEs successfully exporting abroad (IES, Big Data and Smart Cities; Dryden Aqua, water and waste water treatment; and Star Renewable Energy, heat pumps and refrigeration).

In response to the challenges and opportunities facing Scottish SMEs in the low carbon sector, the Edinburgh Centre for Carbon Innovation launches its Scotland-Hong Kong Centre for Carbon Innovation this summer. The Centre will provide a clear pathway for innovative Scottish enterprises and other organisations to understand and accelerate their access and engagement with the market in Hong Kong, the Pearl River Delta and China. As a leading financial centre, Hong Kong has a strong global influence. With strong cultural and business links to Scotland, it represents a clear gateway for Scottish exporters. English is widely spoken and the problem of diminishing air quality is enough to convince citizens of the pressing need to develop new “clean” energy systems for transport, cooling and heating and lighting.

Hong Kong presents a real opportunity for Scotland to continue its claim to the title of the world’s inventor. By supporting enterprises and focusing on exporting low carbon products and services, our efforts will deliver sustainable economic impact in Scotland and a positive impact on the world’s social and environmental wellbeing.

• Ed Craig is Head of Enterprise & Innovation at Edinburgh Centre for Carbon Innovation.