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Welcoming world is our business

  • Date: Monday 14th June 2021
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Doing business in Scotland during the pandemic has proven to be an attractive investment opportunity for foreign investors.

We’re bucking a sharp downward trend seen across the rest of the UK and Europe according to a study from accountancy and consultancy firm EY.

Scotland saw the number of foreign direct investment (FDI) projects rise from 101 to 107 in 2020.

While a six per cent rise may sound modest, compare that with the 12 per cent drop experienced by the UK as a whole or the 13 per cent decline across Europe.

For those not familiar with FDI, it’s when an investor, or group of investors, from one country plough cash into a business or corporation in another country - with the intention of establishing control and a long-term relationship there.

Clearly Scottish is an attractive proposition, in fact it’s the second most attractive investment location after London.

 Edinburgh was ranked first out of the top ten cities outside of London for FDI, with Glasgow and Aberdeen both ranking within the top 10.

The last year has been a challenging environment for all businesses globally, so this impressive record for Scottish FDI should not be underestimated. The numbers are even more encouraging when you look at the detail; new projects have risen by a third; Scotland is attracting a diverse sector spread of FDI, with digital tech leading the way; twice as many investors cited Scotland as the UK’s leading FDI destination. This bodes well for Scotland winning a healthy proportion of future investments over the next year.

In the last week alone I’ve spotted further encouraging examples of FDI.

Scottish vegan cheesemaker, Sheese, has been bought by an international dairy producer in a multi-million pound deal. The Canadian firm Saputo paid £109 million for Bute Island Foods, which manufactures the Sheese product. The company has pledged to invest £3 million over five years in community activities on Bute.

The risks of FDI are always that the share of the company you give up gives the investor a degree of control, but if it can help businesses grow, boost job prospects locally and also pay shareholder dividends, then it can work out well for everyone.

There was good FDI news for Glasgow too last week. Australian fintech firm BlackArrow Financial Solutions, which develops technology to help people realise their financial goals, will relocate their global headquarters to the city. It’s yet another move towards post Covid prosperity and the  investment is a positive sign of international confidence in Scotland.

The increase in foreign direct investment is underpinned strategically, through the Scottish Government and Scottish Enterprise, which is Scotland’s national economic development agency. It says global companies were attracted to Scotland by the quality of the country’s workforce as well as a “competitive cost base, world-class universities and supportive business environment.”

In October last year, the Scottish Government unveiled its inward investment strategy that seeks to entice 50 leading global companies to Scotland, with particular focus on priority sectors such as digital services, health technology and the space sector. This shows that attracting cash injections from big businesses abroad is high on the list of priorities for the First Minister, who has spoken out about the risks of Brexit making the UK less attractive to foreign interests.

Business leaders already operating in Scotland, have warned the Scottish Government that they need to keep their eye on the ball in order to maintain this positive direction of travel. The French-owned biotech firm, Valneva, recently expanded its operations in Livingston bringing around 180 new jobs. The company wants to see a focus on what incentives the Scottish Government can offer to show Scotland is ‘open for business’.

Hopefully these latest statistics show we’re moving in the right direction and hopefully this is the start of a wave of new investment.

 

SIDE

The construction sector is set for a major boom, with £33billion of infrastructure investment and capital spending planned in Scotland to help ensure a strong rebound from the pandemic.

Ambitious plans for Scotland over the next five years will see huge sums directed towards regional growth, the National Islands Plan, decarbonising heat in buildings and delivery of more social homes.

These major plans will also help create thousands of jobs in the industry which is welcome news, but there’s one issue. A skills shortage is currently sweeping through the UK construction sector, meaning there’s a lack of qualified workers available to fill roles.

A report which issued last week by recruitment firm Hays Scotland revealed permanent job registrations in the construction and property sector in Scotland have increased by 59 per cent in the last 12 weeks, compared to the prior 12-week period.

However there are skills shortages across a broad spectrum of roles such as time-served joiners, quantity surveyors, electricians and skilled trades. Civil engineers and landscape architects are also in demand following the investment in civil infrastructure projects.

This isn’t an isolated issue affecting construction either. Recent reports show hospitality venues are also still struggling to fill thousands of job vacancies - with waiting staff and chefs in particular demand as Covid-19 restrictions continue to ease.

Skilled workers are also needed in IT and computing, which has been a long-term trend in Scotland.

As we rebuild from the pandemic, the focus should be on making more apprenticeships available, so that we don’t continue to experience skills and labour shortages of this kind here in Scotland.

 

LAUGH

We’ve all seen the Duke of Wellington as we’re walking down Queen Street in Glasgow, but one place I didn’t expect to bump into him was the pictures!

The iconic Glasgow statue has been celebrated in a new graffiti mural in Glasgow, which depicts him relaxing in a reclining chair at the cinema with a tub of popcorn in hand.

It’s a brilliant piece of work by street artist Conzo, which was commissioned to celebrate the opening of the new Glasgow Vue St Enoch venue.

I’ve had a chuckle many a time when I’ve passed the famous statue, complete with his obligatory cone which I’m pleased to see features in the mural.

It’s a great celebration of Scottish talent, featuring several Scottish film icons as well as having been created by a Glaswegian artist.

 

 

WEEP

There are concerns that some town centres in Scotland could be left without a single bank in years to come amid further branch closures as a result of the pandemic.

According to new figures from the Office of National Statistics, the number of banks in Renfrewshire in particular has plummeted by around 70 per cent in the last 10 years, with data indicating there were around 35 branches open in the region a decade ago.

While digital banking is of course a fantastic thing, many people – particularly those who are elderly or vulnerable – still heavily rely on a visit to their local branch to access or transfer cash.

We must protect the presence of physical banks, as closures have a negative impact on not just individuals, but also local businesses and jobs.

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