David Watt: 2015 economy navigated storms from all directions

David Watt, executive director of the IoD in Scotland
David Watt, executive director of the IoD in Scotland
Share this article
Have your say

At the end of 2014, the forecasts for the future year were at best, pessimistic.

I was rather more upbeat, perhaps because my foresights come from speaking to people, as opposed to just analysing numbers. Thankfully, the gloomy predictions did not come to pass after all. We seemed to get past some pretty cataclysmic events and still see growth in our economy even although it has slowed towards the end of the year. My optimism was, thankfully, justified.

Economically speaking, of course we have had some really big challenges in 2015 – the Greek crisis (crises); the dramatic fall in oil prices; the rise of global terrorism; the mass migration of displaced people from the war-torn Middle East; the rapid slow of the BRIC countries’ growth trends and to top it all, a fractious looking US presidential race. All factors which could have completely blown our global economic progress dramatically off-line. While this hasn’t happened, there definitely has been a slowing and the promise shown in previous years has not been delivered at the pace some had hoped for.

In Scotland too we have had some gloomy economic events – the stubborn rate of unemployment north of the Border; the closure of the last vestiges of our steel industry; the rapid downsizing of much of the North Sea developments of the last 30 years; as well as on-going exporting challenges; lack of growth in retail sales and to top it all of the closure of the Forth Bridge which will have a significant end of year impact for many.

And yet, I speak to so many people in the service industries which rely on a growing economy and they are so upbeat and busy that it is hard to recognise the gloom which could have descended.

From a freelance photographer to a recruitment agency to a marketing consultancy, they are busier than ever and yet logic tells you if we were in trouble these areas would traditionally be the first to get cut.

Certainly many in more traditional industries are cautious and indeed many quite worried about the Chinese steel impact and the slowdown in aspects of manufacturing. Several assessments of business confidence recently have also indicated some worries over growth and a less positive view of the future.

Despite all this I keep seeing good signs and hearing good things in Scotland where I do feel an air of optimism around which I am not sure exists in many parts of the UK outside London. I suspect it is something to do with the referendum – while clearly stating that we would stay in the union – bringing about some kind of internal awareness of our great heritage and brand as a country while bring global attention to our small nation.

Recent inward investment figures seem to reflect this positive image of Scotland and the dynamism around in many areas is greater than I have seen for many years.

I never really expected to see our rather staid, traditional capital city become a birthplace for fantastic technological start-ups and world-leading innovation being converted into global brands. Many believe it is now emerging as the largest technology hub outside London. The most famous are obviously Skyscanner and FanDuel but I get a bit annoyed when they are constantly quoted as if they were our only successes. Their growth has been phenomenal and is enormously welcome, but there are dozens of success stories to tell.

As I move around Scotland I see superb businesses – some new, some older – who are doing just great things now and for the future.

The almost constant expansion of Wood Group is astonishing and their worldwide footprint grows even in a declining oil market; the innovative and ever-entertaining BrewDog who have elevated craft beer to a new level; the food and drink industry as a whole is booming while interesting companies like Metis Partners and Jumpstart have created a significant niche in the IP and R&D spaces.

I could go on and on but these examples underpinned by a world-class set of universities lead me to be optimistic about Scotland for 2016 and beyond. We need to be realistic and improve our future thinking but we are in a good place.

People constantly ask me: “What will Scotland’s next big industry be?” It has taken me some time to realise that that there won’t be one but a serious of growing small and medium-sized businesses some of which will grow in value and impact (if not thousands of employees). Certainly industries like tourism, retail and engineering will remain crucial to our economy alongside food and drink, and the newer ones of creative media and bio-sciences but at the core of them all will be the application of technology.

We need to plan better for the future and I would like to see the government set up a “Future Unit” both at Scottish and UK levels to plan beyond elections and politics and ensure that we are building on reality and utilising all our best brains to grow an economy for future generations. That’s top of my wish list for 2016!

• David Watt is executive director of the IoD in Scotland