A MAJOR report published this week by research company Capital Economics has highlighted not only the strengths of the financial services sector in Scotland but also the considerable opportunities that lie ahead.
As a business group which commissioned this report we believe that, with the right approach, we have the potential, as part of our ambition for Scotland, to become one of the top five wealthiest countries in the world and to secure a place as one of the world’s top 30 financial services centres.
Rising long-term demand for financial services, including global growth in sectors such as asset management, in which Scotland is already strong, presents a fantastic economic opportunity. As an example, thanks to increased economic growth and more people entering retirement across the world, PricewaterhouseCoopers forecasts that global assets under management will rise to £60 trillion in 2020 – up from £37 trillion in 2012.
Whether independent or not, the report reinforces the merits of a single regulatory regime benefiting both Scotland and the rest of the UK. It also calls for a competitive tax regime and sensible immigration policies to retain talent in Scotland and attract individuals to work in the sector from elsewhere, as well as more company divisional or corporate headquarters to locate here. The tailored practical measures outlined in the report will ensure that Scotland’s financial services sector is able to build on its significant success to date.
There are, however, also increased challenges, and a policy response will be required to ensure that rather than being exposed to radical changes in the sector, Scotland becomes a source of innovation in the use of new technology in the sector. The flexibility to be able to adapt to change is therefore absolutely critical.
Scotland already has a successful financial services sector – overseeing 18 per cent of total funds under management in the UK, making us the fourth largest asset management centre in the EU. However, with a better approach to regulation, tax and immigration, Scotland is well set to become one of the top 30 financial services centres in the world.
• Graeme Blackett is lead author of N-56’s Scotland Means Business reports