Ivan McKee: selling Scotland to the world as a place to invest

I was delighted to be appointed minister for trade, investment and innovation this summer. The creation of a specific Scottish Government ministerial portfolio focussed on international trade, reflecting both the current environment and the government's priorities, has been widely welcomed.

The Queensferry Crossing. Picture: Transport Scotland

Whatever happens with Brexit, Scotland needs to accelerate its focus on increasing exports and attracting inward investment. Those deals are critical to our future prosperity. Building innovative businesses is key to that success.

I join a strong team of ministers in the new finance and economy portfolio. Our focus is to ensure that Scotland’s economy, and our inclusive growth agenda, is centre stage across government. Our immediate priority is to engage with businesses – listening to their challenges and understanding how government can provide effective support.

Over the summer, I met dozens of businesses across many sectors and from all parts of Scotland, including highly innovative life sciences start-ups in Dundee, successful exporters in food and textiles in the Highlands and rapidly-growing manufacturing businesses in Fife.

This article appeared in Deals 2018. A digital version can be found here.

I’ve witnessed the great work our universities do to attract inward investment and to support innovation, including through our eight sector-focussed innovation centres. I’ve seen how the Scottish Government’s £48 million investment in our new National Manufacturing Institute for Scotland is being applied, building on the success of our Advanced Forming Research Centre and putting Scotland at the forefront of Industry 4.0.

It’s satisfying to know that my experience of building exporting businesses before coming into politics is being put to good use.

Scotland’s track record on trade is solid – the latest information reporting a 53 per cent increase in international exports over ten years. Scotland’s 2,350 foreign-owned companies are a major contributor to our economy, delivering a combined turnover of £86 billion and employing more than 300,000 staff. And we remain competitive in attracting foreign direct investment (FDI).

The 2018 Ernst & Young Attractiveness Survey reported a 7 per cent annual increase in new FDI projects in Scotland and the highest number of jobs created for a decade. We have consolidated our position as the UK’s most popular inward investment location outside of London, and Edinburgh, Glasgow and Aberdeen all feature in the top-tenUK cities for attracting FDI. The quality of that FDI is also noteworthy – Scotland secured 24 per cent of all UK research and development projects in 2017 and digital projects grew by 56 per cent to become the second-largest sector behind business services.

Scottish Development International is extremely effective in attracting international companies and high-value projects to Scotland, and in anchoring investors for the long term.

I’ve visited the Scottish Government’s innovation and investment hub in Dublin which – along with our hubs in Paris, Berlin, Brussels and London – is on the front line of our export and inward investment drive.

The Scottish Government has increased its investment in the economy this year by 64 per cent, as part of a £2.4bn investment in enterprise and skills. We have the most competitive business rates system in the UK and provide sectoral and business growth support through our enterprise agencies. The consolidation and expansion of government support for business investment through the new Scottish National Investment Bank further demonstrates our determination to put our money where our mouth is.

We have strong foundations to build upon, but there is still much work to do.

Scotland has huge economic potential across many sectors where we can boast truly world-class capabilities and we are well placed to take advantage of the opportunities that emerge.

Our ‘Scotland is Now’, campaign, launched in April and putting Scotland in the international spotlight, showcases our world-leading assets to a global audience. It harnesses the collective efforts of Scottish Government, VisitScotland, Scottish Development International and Universities Scotland to promote the country under a single, unified national brand.

‘Scotland is Now’ is designed to put the country at the top of everyone’s list of places to live, work, study, invest and visit – a destination of choice for tourism and a vehicle for showing that our exports, such as food and drink, oil and gas, manufacturing and financial services, are of the highest calibre.

In many ways, Scotland is an optimally sized country, with an accessible, agile government able to bring together key players and decision makers in order to respond to challenges and seize opportunities. We have seen this deployed to good effect to safeguard and create jobs in steel, shipbuilding and aluminium smelting in recent years. This close co-operation between government and business is something we intend to build on.

Scotland’s public finances continue to improve and our economy is growing twice as fast as the UK as a whole. These trends – along with recent labour market, productivity and GDP data – show we are on the right track. And we will continue to use our devolved powers to best effect, which the forthcoming Export Action Plan I intend to bring forward will demonstrate. However, actions on population growth, participation in the labour market and productivity are also essential and require Westminster to play its part too, or to give the Scottish Parliament the tools to deliver them.

This is a government committed to growing the economy in a sustainable and inclusive way. Scotland has huge economic potential and the Scottish Government is determined to work alongside business to unlock it.

Ivan McKee is minister for trade, investment and innovation.