As I return to Japan this week to build on our existing ties, I am privileged to be the first Scottish Government minister to visit South Korea to promote Scottish business in this important market.
Our relationship with South Korea is much newer than that with Japan and is a sign of Scotland’s ambition when it comes to attracting new business and to promoting our own industries overseas. Our engagement with South Korea shows the results that can be achieved.
Japanese and Korean interest in Scotland is based on Scottish strengths. Scotland’s international standing and global leadership in fields such as life sciences and marine renewables is attracting significant investment from Japanese and Korean businesses.
Earlier this year, Samsung Heavy Industries announced a £100 million investment to manufacture turbines at Fife Energy Park, creating 500 jobs, Doosan has been working in Scotland since 2006. Mitsubishi and Kawasaki Heavy Industries are among 65 Japanese companies working, investing and testing in Scotland, resulting in more than 4,000 jobs. Japanese firms invested heavily abroad in 2011, spending a record $80 billion, and Japanese firms have around 60 trillion yen of cash ready for investment.
And this investment is not just one way. In recent years, we have seen many excellent examples of Scottish companies, universities and organisations successfully pursuing the development of collaborations in trade, investment and education. Many Scottish companies are already doing business in Japan and Korea and this visit will facilitate useful introductions and business opportunities.
Scottish food and drink companies currently operating in Korea include Marine Harvest, Wester Ross Fisheries, Edrington Korea, Glenfiddich, Glenlivet, Walkers and Galloway. In Japan, financial services, electronics and textiles are represented by famous Scottish names including Aberdeen Asset Management, Wolfson Microelectronics and Mackintosh. Of course there are many more.
Both countries represent significant markets for Scottish manufacturers and producers. South Korea recovered faster from the financial crisis than any other rich country – GDP grew by 6 per cent in 2010 and is expected to grow by 4 per cent this year. Japan has now overtaken Germany as the world’s largest importer of Harris tweed. Food and drink exports to Japan grew by 25 per cent in 2011.
With a strategic focus throughout 2012 on Scotland’s food and drink exports, Asia holds many opportunities for us. During my visit I will host events to promote Scottish food and drink to key premium outlets in Japan, including noted chefs from restaurants such as globally renowned Nobu and key Japanese hotels.
Our support for food and drink exports in Japan and Korea follows recent actions to promote food and drink exports in the Middle East and in China.
We are finding opportunities for Scotland in unexpected places. As acknowledged in the Scottish Government’s State of the Economy assessment, international markets will offer Scotland a vital source of opportunity for growth and jobs in the years ahead.
Central to our refreshed government economic strategy is an ambitious target to increase our exports by 50 per cent by 2017. That is why we are working with our Enterprise Agencies and with Scottish Development International to encourage more growth companies to become active exporters in new and established international markets.
It is Scotland’s energy, literally and metaphorically, that is opening doors across the globe. Just last month, I was pleased to welcome a deal between Orkney-based European Marine Energy Centre (EMEC) and the Ocean Energy Association of Japan (OEAJ) to develop Japan’s first marine energy test centre. One year after the terrible events at Fukushima and the devastation visited along Japan’s eastern coastline, the country is anxious to explore alternatives to its nuclear industry. Japan recognises our position at the vanguard of the marine renewables industry and I look forward to meeting with OEAJ representatives during my visit.
Asia is a growing market for Scotland, but it is not our only one. Last week Fergus Ewing and Fiona Hyslop visited Canada and the US as part of Scotland Week. Fergus opened new SDI offices in Calgary and US offices for Scotland’s Renewable Resources, one of the largest solar photovoltaic (PV) installers for commercial rooftops in the UK and an excellent example of an innovative and ambitious Scottish company moving into overseas markets. In Houston and in Canada, the energy minister met with senior oil and gas industry figures. More than 5,000 jobs are supported by Canadian companies located in Scotland. There are particularly strong links to the oil and gas industry – 30 per cent of the oil and gas produced in the North Sea is recovered by Canadian companies based around Aberdeen.
We continue to punch above our weight as a location for foreign direct investment (FDI). The 2011 Ernst & Young UK Attractiveness Survey report concluded that Scotland was the leading location for FDI in the UK in terms of employment generation.
It is vital that we sustain and seek to build upon the international opportunities for Scottish businesses. The globalised economy means that a stronger export and inward investment performance is essential if Scotland is to continue on a sustainable, balanced path of growth and economic success. We know that to succeed we have to focus on where we can offer a competitive advantage based on the strengths of our workforce, our internationally renowned universities and our technology.
It is that discussion I will return to throughout my meetings in Japan. And a conversation I look forward to developing with major South Korean businesses.
• John Swinney is Finance Secretary