At a time of huge political flux, there are certain fundamentals that Scottish businesses have taken for granted. Since the industrial revolution, one of those constants has been Glasgow’s place as an important driver for the Scottish economy. With a proven track record in financial and business services, as well as strong growth in sectors such as life sciences, the city is on course for a bright future.
However, if we’ve learned anything from recent years it is that the winds of change can quite quickly steer a ship off course, or indeed into the rocks if not careful. In such times Glasgow needs to have a fully functioning and well invested local economy – that much is obvious. But what more can it do to set itself apart from other comparable cities across the UK and indeed Europe to attract that investment of the future?
Investors like certainty – pure and simple. When people deposit savings into a bank they like to know that their money is safe there, just as they prefer a degree of certainty on what returns or interest they may accrue. Investors are no different.
So, with continued political uncertainty apparent in many different guises – from Brexit to Indyref2 – it is clear that there are challenges to overcome when courting international investment.
Against the backdrop of doom and gloom, there is an underlying strength in the Glasgow economy. Indeed, a recent analysis of the Glasgow economy published by Scottish Business UK showed a strong presence in public administration, particularly in health and education, a financial sector which is 50 per cent larger than the Scottish coverage and an economy which is more export-oriented than Scotland as a whole.
Scotland’s place in the UK is the fundamental pillar underpinning these strengths. According to our analysis, around 16 per cent of Scotland’s economic output is attributable to Scotland’s place in the Union. In reality this equates to around £3.3 billion gross value added (GVA) to the Glasgow economy and more than 67,000 jobs.
Indeed, this is where organisations like Scottish Business UK agree with the SNP’s Growth Commission in so much as more action is required to improve our home-grown economy.
However, the impacts of short-term radical constitutional change cannot be ignored and the uncertainty that goes hand in hand with those changes is likely to spook investors. This may not be music to the ears of some but the most likely and productive recipe for economic growth in Scotland is steady reform, building on the strong foundations that already exist.
Leaders in cities like Glasgow need to keep their eyes wide open to the future opportunities and if they can do that, then national policymakers need to do their part too. By offering stability to investors, not only to build the vital infrastructure but also to ensure that more businesses choose Glasgow as a home, we can attract the best and brightest who will drive the Scottish economy forward for years to come.
Struan Stevenson is chief executive of Scottish Business UK.