Back in 1577, Queen Elizabeth of England made an investment in a single “fixed asset” – namely the Golden Hind, Sir Francis Drake’s flagship.
Today, we’d call Drake a pirate, but back then there were more romantic names for his kind – privateers, buccaneers or corsairs. Drake’s mission was to carry out “research and development” by sailing around South America, but he encountered “business competition” from the Spanish fleet.
Drake sailed back into Plymouth with booty worth nearly £500 million in today’s money, giving Good Queen Bess a return of £47 for every £1 she invested.
Fast-forward nearly 500 years and Scotland has an opportunity to launch its own fleet of manufacturing corsairs, who will help the Scottish Government by creating jobs and paying tax.
Just as Drake needed investment to kit out his small fleet, so entrepreneurs need to finance the equipment, machinery and plant that will help their manufacturing corsairs to grow. Today’s start-ups can’t get hire-purchase agreements as they don’t have the financial track record for lenders.
Instead, the Scottish Government should create a finance scheme under which it will provide guarantees to the banks covering 90 per cent of the cost of the research equipment, and 3D printers, for example, needed by our new manufacturing corsairs. This scheme would give Scotland’s armada a competitive advantage as it navigates the uncharted waters of export markets.
Back on dry land, as a producer of micro-compressors, I know that it’s extremely hard to find modern premises for small manufacturers – existing facilities are geared towards the low-value manufacturing of the past and not the hi-tech industries of Scotland’s future.
What our country needs is world-class infrastructure – the Scottish Government must invest in building modern industrial parks in all our nation’s major towns and cities.
Drake sailed more than 40,000 miles in a ship that was barely 100 feet long – think how much more Scottish entrepreneurs could achieve with the right tools.
• Olly Dmitriev is the founder and managing director of Edinburgh-based Vert Rotors