Manufacturing in Scotland: What do we still make?

Scotland’s shipyards may no longer echo with the sounds of construction and the car factories of yesteryear have ground to halt, but ‘Made in Scotland’ still applies to a multitude of products developed and created here.

Scotland was once home to the world’s most developed shipbuilding industry.

Govan, on the southern bank of the Clyde, had just under 20 yards with 70,000 employees just before the onset of the First World War.

But by the end of the 1950s, the industry began to decline in the face of competition from the Far East.

Strikes over workforce cutbacks, forced nationalisation and a re-emergence into the private market produced a smaller workforce in the 1990s, with defence contractor BAE Systems one of the few giants to remain in Glasgow’s shipyards.

A similar story is seen in Scotland’s once flourishing car production industry. As well as producing vital engineering components, Scotland was also the home of Hillman Imp car construction, as well as the birthplace of Robert William Thomson - the inventor of the pneumatic tyre. Despite no longer producing cars, the nation’s automotive efforts have had a lasting effect on the industry and political landscape of the west of Scotland.

Keith Bender, Sire Professor of Economics at the University of Aberdeen, said: “Scotland has followed the same arc as other developed countries, from agrarian and resource extraction-based economies to manufacturing, to the hollowing-out of these industries.

“Scotland has now moved beyond general manufacturing to think and do niche things that are highly profitable, such as whisky production or the gaming industry.”

The decline in the international value of Brent crude oil - one of Scotland’s main exports since the 1960s - has arguably shifted the focus towards Scotland’s other exports in recent times. Yet despite the uncertainty surrounding the natural resource economy and decline in the nation’s heavy industry output, faith in “Scotland plc” is still higher than expected in the eyes of the nation’s private sector. `

Accountancy firm Grant Thornton found that more than half – 56 per cent – of Scottish respondents to their survey believe their profits will increase this year. The figure is higher than the global average of 44 per cent, but below the 63 per cent of UK-wide respondents predicting a rise in ­profitability.

So what does Scotland continue to make that inspires such confidence?

Scotland’s diversification from heavy industry into service and tertiary-sectors has played a major role in the country’s continuing relevance in global markets.

Industries such as software and game development, handmade clothing and craft beer brewing have become selling points for Scottish businesses across the country - with Scotland’s third-largest city, Aberdeen, having the highest business birth rate outside of London, for example.

One of Scotland’s biggest growth areas is in software development, with the international gaming industry owing much to the design hubs of Dundee and Edinburgh. As the home of internationally-renowned gaming franchises such as Grand Theft Auto - with the newest title (GTA V) making Rockstar North nearly £512 million worldwide on launch day - Dundee in particular benefits from an established network of highly-skilled software development engineers.

Brian Baglow is leader of the Scottish Games Network, an umbrella organisation for the industry, and has extensive experience working as DMA Design (now Rockstar North’s) first PR manager.

He said: “The reason Scotland is so successful in gaming is down to the ‘virtuous circle’. We had several very successful companies here in the early days of the 90s. When people left, or the companies closed, they founded new studios, or they went to lecture on the very early courses at universities. This produced more graduates, who found jobs close at hand.

“The growing number of companies led to local enterprise organisations building up a level of expertise, which helped them advise those wishing to found their own companies - and that’s where we find ourselves today.”

Baglow refers to the fact that very little outsourcing of game development is done outwith Scotland, as most games are developed at studios in Dundee or the technology companies of Edinburgh.

He said: “The future is where it gets really interesting. All film and TV producers, musicians, authors and even performing artists are finding that digital devices are changing the way their work is produced, distributed, monetised and consumed. At some point they’re going to need someone with hardcore technical skills, who is also creative.

“This is where the games sector excels. There could be enormous growth when Scotland’s games sector starts to work with the rest of Scotland’s creative industries to help bring creative engineering skills to every kind of content and output.”

Successful Scottish exports are not just located on the mainland, however, as Harris Tweed has gone from near-extinction to rapid popularity in the boutiques of Yves Saint Laurent and Vivienne Westwood and the wardrobes of Madonna and former Dr Who Matt Smith.

The authentic textile is hand-woven at home by the islanders of Lewis, Harris, Uist and Barra, using pure virgin wool that has been dyed and spun in the Outer Hebrides. It’s a business that has seen production more than triple, from an all-time low of 450,000 metres produced in 2009 to 1.5 million in 2015, off the back of demand from the United States and Japan.

Production of the world’s only commercially-produced handwoven tweed has created employment for over 350 craftsmen, with Comhairle nan Eilean Siar to fund the acquisition of six new weaver’s looms to feed the Harris Tweed revival.

Scotland’s range of niche consumer goods also extends to the food and drink industry. As well as the well-established blended malt whiskies that are exported to markets as far away as China and Canada, there has been a marked increase in the number of craft beer breweries operating in Scotland, of which Aberdeenshire-based BrewDog is the archetypal success story.

The Aberdeenshire brewer, founded in 2007 by business partners James Watt and Martin Dickie, now runs more than 40 bars in the UK and overseas, and exports to 55 countries. The company has become known as one of Scotland’s greatest business success stories in recent years and was named as the fastest-growing food and drinks company in Britain for four years in a row between 2010 and 2014.

Now valued at £238m, the firm produces over 120,000 bottles of beer every month. It employs 400 people and ships to over 50 countries worldwide, and has recently opened BrewDog bars as far away as Tokyo and Hong Kong.

But with all three of these Scottish exports sharing phenomenal growth rates, it remains to be seen whether these industries can sustain their rapid development.

Professor Bender added: “The danger is that when an industry is tied to a particular resource, it can suffer. Would we expect to see a strong gaming industry in Dundee in 50 years? Probably not, in that these things are cyclical - right now, gaming on all platforms is looking promising.

“If you can sustain the flexible, highly-skilled and productive workforce needed, along with the appropriate infrastructure, then there’s no reason why the ‘virtuous circle’ cannot continue.”