How can Scotland attract more inward investment?

Stuart Lunn. Picture: Neil Hanna
Stuart Lunn. Picture: Neil Hanna
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We asked some of the country’s top dealmakers about Scotland’s prospects of picking up more inward investment.

Stuart Lunn Founder and chief executive, LendingCrowd

Scotland has enjoyed three consecutive years of record inward investment, but we cannot rest on our laurels.

With Brexit fast approaching, the private and public sectors need to work together more effectively to ensure that Scotland remains an attractive destination for foreign investors.

Given our world-class education system, it is also crucial that industry and academia forge closer ties, equipping the next generation with the skills they will need to succeed in the ever-changing world of work.

Innovation hubs such as The Data Lab and the Scottish Aquaculture Innovation Centre show what can be achieved when cutting-edge research meets the real needs of business.

Initiatives such as FinTech Scotland are also playing an increasingly important role in raising the profile of our thriving financial technology sector, both at home and abroad.

Scotland’s skilled workforce and diverse economy always does us proud – now is the time to work together and sell our story to the world.

Mark Gall Regional director of Corporate and Commercial Banking, Royal Bank of Scotland

Scotland has already demonstrated an outstanding ability to attract and drive sustained growth and inward investment.

More than 75 per cent of the world’s sub-sea engineering capability is harboured here in the north-east alone.

However, given growing political uncertainty for the UK as a whole, Scotland cannot guarantee that previous levels of attractiveness across all industries are sure to continue.

We must be looking towards the future and see where our learnings and skills from work in historical sectors can lead to growth and opportunities elsewhere.

Regeneration projects are vital in maintaining and creating new inward investment opportunities, supported by strong infrastructure programmes.

Look towards Marischal Square in Aberdeen and the V&A Dundee – they are bold projects delivered in close partnership between the public and private sectors, marking the rebirth of areas once lost as previous industries left two key Scottish cities.

We must work increasingly hard and work together to ensure the pipeline of talent, skills and experience is strong enough to drive business and economic growth in the future.

Bob Hair Wealth planning director and head of Edinburgh office, Cazenove Capital

Although Scotland has tremendous tradition for export, I believe that our most valuable exports have been people and ideas.

Helping Scotland to become the most entrepreneurial society in the world could help reverse that trend.

To do that we need to have the best eco-system for entrepreneurs.

Brad Feld, a technology entrepreneur who set up a completely new eco-system in Boulder, Colorado, believes there are four things essential to success in an eco-system: That it is led by entrepreneurs, for entrepreneurs; this is done with the support of government, a strong angel and venture capital network with a leading and supportive university.

Successful entrepreneurs create jobs, wealth and contributions to a growing economy.

If the public and private sector provide a supportive eco-system, then we will have an excellent platform to build great businesses and attract investment.

Michael Atkinson Operating and brand director, Inverleith

As a private equity fund based in Edinburgh, we invest in consumer brands across the sectors of health and wellness, lifestyle and heritage brands.

We look for businesses that have a product USP or strong defendable market position, the opportunity to become an internationally scalable brand and founders and management who are receptive to a collaborative investment approach with Inverleith.

To attract inward investment, Scotland needs to continue to create an environment and culture where such businesses can be initiated sustainably, can be built and allowed to flourish over time.

That environment needs to incentivise both businesses and potential investors, whether by offering grants, attractive tax benefits or other means.

Scotland also needs to ensure that it is constantly nurturing and attracting diverse expertise and skills to support and develop a wide range of businesses across different sectors.

Benny Higgins Chairman, Scottish National Investment Bank

The Scottish National Investment Bank will be an institution that will have an enduring impact on the Scottish economy. It will be an essential component of Scotland’s economic architecture.

The Scottish Government is committed to capitalising the Bank with £2 billion over 10 years.

This is a clear message that Scotland is a country ambitious in its growth aspirations, a country that is adaptable to change and a country that supports businesses across all stages of the business growth lifecycle.

The bank will be crucial as we compete in a global market to attract inward investors.

By providing a single point of access to investment, and adopting an alternative strategic focus and risk appetite, the bank can fuel the economy and catalyse additional private sector investment.

The plans for the bank are about being more ambitious for Scotland by supporting entrepreneurial dynamism and providing long-term patient capital.

Lyn Calder Corporate finance partner, Anderson Anderson & Brown

Scotland has historically been successful in attracting inward investment in the form of corporates choosing to locate here and this continues to be the case with the likes of Transiris Corporation expanding into Scotland.

While it is great to see new businesses reaching our shores, another key focus should be attracting new money into organisations that are already on the ground in Scotland.

New initiatives such as the Scottish European Growth Co-investment Programme, managed by Scottish Enterprise, are welcome in this regard.

Part of this fund’s aim is to attract non-Scottish private equity money to the country, with up to 50 per cent of the funding available for each transaction.

All too often we focus on the new rather than nurturing what we already have and there is a key role for our development agencies to promote home-grown businesses.

Jonathan Harris Editor, Young Company Finance

The underlying investment in early-stage Scottish companies by regular investors such as business angel groups and specialist venture capitals (VCs), has increased steadily over the past few years.

The big increases in investment have come as large one-off deals, often by global corporates, or VCs with a special sector interest such as life sciences.

Such deals have become a regular, if infrequent, part of overall investment at this end of the market.

Few of the investors in these large deals make more than a single investment in Scotland, so to increase the number it is crucial that young Scottish companies bring their credentials to the attention of their own market sector and to the global investment community.

Although the ‘golden triangle’ of London, Oxford and Cambridge takes over 80 per cent of early stage risk capital investment in the UK, there is plenty of scope for Scottish companies to attract a larger share.

David Lightbody Corporate partner, Brodies

A key element of Scotland’s attraction for investors is our enviable research and skills base.

Our educational and research institutions lead the field in some of the most innovative areas of tech, AI, finance, Big Data and biosciences, to name a few – and those are turning out future employees with world-class credentials at the cutting edge.

But the world is changing apace.

The challenge is to ensure that we are nurturing – and retaining – that highly-skilled talent pool in the areas that will be relevant and saleable to the global economy - not just today, but in 15 or 20 years’ time.

Industry must engage with academia on matters such as curriculum design, to ensure we remain at the forefront of innovation and produce the people who can sell Scottish business abroad.

The schoolchildren of today will be the entrepreneurs and businesspeople of tomorrow.

We need to be proactive in maintaining a talent pool that continues to be highly relevant.