I am delighted to open this debate on behalf of the Economy, Energy and Tourism Committee. This is our second committee debate in the space of eight days. Last week I rather enjoyed hearing various members of other parties express their discomfort at having to vote for a motion in my name; I look forward to the horror that will hit them at 5 o’clock when they realise that they will have to have that experience two weeks in a row—I hope that it becomes a habit.
There can be no disagreement that helping Scottish business to boost exports should be a top priority for everyone who is concerned with Scotland’s economic performance. I think that our inquiry into internationalising Scottish business makes an important contribution to current thinking about the drivers and barriers that influence Scotland’s international trade.
I thank my fellow committee members, committee clerks and all those who gave evidence to the committee and assisted us with external visits; their help was invaluable to us in producing our report.
Before I turn to our conclusions, let me set the context for the inquiry. In 2010, the predecessor Economy, Energy and Tourism Committee held an inquiry to examine the work of Scottish Development International, which is the international arm of Scottish Enterprise and Highlands and Islands Enterprise. Members considered SDI’s dual role of encouraging inward investment and supporting exports from Scotland. The committee concluded that SDI’s primary focus should be on achieving
“a step change in the number of Scottish companies that see exports and international trade as a route to future success.”
The report prompted a review of SDI’s strategy and the publication, jointly by the Scottish Government, Scottish Enterprise, Highlands and Islands Enterprise and SDI, of “Scotland’s International Trade and Investment Strategy 2011-2015”. Five years on, it seemed appropriate to review progress.
Back in 2011, the Scottish Government set a target to increase exports by 50 per cent by 2017. That looked challenging but suitably ambitious, as part of the Government’s wider strategy to support business growth. Our committee was pleased to note that significant progress has been made towards the target. However, as we looked more closely at the facts and figures, the committee was concerned that Scotland’s exports remain concentrated heavily with a limited number of large firms. Around 100 companies account for 60 per cent of total exports. By contrast, only 16 per cent of all international exports are from small companies.
We wanted to explore the reasons why so many Scottish firms, particularly small and medium-sized enterprises, do not export. What is preventing them, and what more could be done to change that?
From salmon to whisky to universities, Scotland has real success stories overseas, but breaking into lucrative international markets can sometimes be time consuming, costly and difficult to do, especially for small businesses. That is when small businesses need support, which could come from a business gateway adviser, a local chamber of commerce or a specialist who works for SDI or its United Kingdom counterpart, UK Trade & Investment. Whatever the source, support needs to be easy to identify, easy to contact and easy to deal with. We were disappointed to find that all too often that has not been the experience of businesses across Scotland.
Although there is no doubt that all those organisations—and others—undertake much positive work to increase Scotland’s export performance, it became clear during our inquiry that the landscape of support remains cluttered, confusing and ultimately off-putting for many businesspeople.
Although plenty information is available about international opportunities and export-related issues, it seems only to add to the sense of confusion about where to go and who to speak to. As an example, the committee heard that trade missions were a key part of helping companies to break into overseas markets, but that more needed to be done to improve co-ordination, reduce duplication and eliminate unnecessary competition between organisers of trade missions.
Helpfully, the Scottish Government says that it agrees. Discussion on an appropriate platform for publication of trade missions online is apparently a key issue for the pithily titled international events community of practice that the SDI has recently established. I wish it well in its endeavours because issues such as these need to be tackled urgently. Above all else, that will require leadership.
We concluded that overall responsibility for co-ordination and leadership of export strategy and initiatives in Scotland should rest with SDI as the main public agency that is tasked with international support for business.
At this point, I must acknowledge that we found many positive examples of SDI’s work; its interventions and programmes are valued highly by many companies around Scotland. However, if Scotland is to make a step change in its international export performance, SDI can and must do more. We recommended that it should have within its operating plan a renewed emphasis on promoting internationalisation and supporting Scottish exporters, backed by more challenging targets.
That does not mean that SDI should do everything. We also expressed strong support for sectoral initiatives to increase exports, such as that led by Scotland Food & Drink, where industry leadership has been supported and facilitated by SDI and the Scottish Government.
James Withers of Scotland Food & Drink told us that his sector attached huge value to SDI resources, but it was industry’s responsibility
“to help it to deliver better”
by setting the framework so that there was
“industry leadership and public sector alignment.”—[Official Report, Economy, Energy and Tourism Committee, 18 March 2015; c 39.]
In the seven highest priority markets—France, Germany, North America, the middle east, China, Japan and Singapore—new food and drink trade specialists are being recruited to join the existing SDI field teams. I am told that, from the beginning of this month, 10 specialists are now in post around the world helping to promote Scottish producers. It is good news that the Scottish Government has accepted our recommendation that SDI should review the success of this initiative after its initial period of operation to see whether other key sectors might also benefit from a similar approach.
We were also struck by the potential for enhanced collaboration at the regional level. When committee members met representatives from Aberdeen and Grampian Chamber of Commerce, we were told about the north-east Scotland trade group, which involves Aberdeen City Council, Aberdeenshire Council, the chamber of commerce, SDI, Scottish Enterprise, UKTI, the University of Aberdeen, Robert Gordon University and Subsea UK. All are sharing information to reduce duplication and improve collaboration. We have recommended that the enterprise agencies should look at whether that model could be usefully replicated elsewhere in Scotland. Perhaps that is another task for the international events community of practice.
Let me say a little more about the priorities for action that the committee identified. First, in order to make it easier for businesses to find the basic information that they need when starting their export journey, we recommended that a business portal should be developed that would include signposts to export advice and assistance from public and private sector organisations.
The Scottish Government has decided that that belongs on the mygov.scot website. Members might think that I am a little sceptical, but I wonder about the likelihood of the owner of a small business finding what they need to know about exporting among all the other information that is contained on that site. Time will tell whether that is a wise decision.
In terms of business advice and support services, the committee identified a clear opportunity to better utilise the globalscot network. Globalscot is
“a diverse network of business leaders, entrepreneurs and executives with a connection to Scotland - and a strong desire to see Scottish businesses succeed locally and in the wider world”—
so says its website.
Perhaps surprisingly, 17 per cent of global Scots are based here at home in Scotland. That presents an opportunity, with a potential role for them to act in a mentoring capacity with companies at an early stage of their export journey. Those members who made the trip to the middle east met a number of global Scots based out there, and it was clear that they take a great deal of interest in helping Scottish exporters in that region. We think that more could be done, however.
We believe that using global Scots at home could help to augment the highly valued but more general business mentoring scheme that is already delivered by Scottish Chambers of Commerce. We asked SDI to review the means by which businesses can access the globalscot network and to increase the number of one-to-one engagements between global Scots and companies in order to maximise the benefits from the scheme.
We concluded that SDI’s new export support programme, which was set up in 2014 as the successor to smart exporter, has set a relatively modest target of support to companies. For that reason, we recommended a review after 18 months of operation, with a view to making targets for the remainder of the programme more challenging. We are told that SDI will consider those points. I hope that more challenging targets for support to Scottish exporters will be one recommendation that is accepted and pursued.
I confirm that the Economy, Energy and Tourism Committee believes that the expansion of support to companies that have export potential is of vital importance if Scotland’s international trade performance is to be improved significantly over the next decade.
Henry Ford once said:
“Coming together is a beginning; keeping together is progress; working together is success.”
It is that spirit of co-operation and collaboration, which will be reflected, I hope, in this afternoon’s debate, that needs to be grasped if we are going to improve export support services for Scottish businesses.
On behalf of the Economy, Energy and Tourism Committee, I am delighted to move,
That the Parliament notes the findings of the Economy, Energy and Tourism Committee’s 5th Report 2015 (Session 4), Internationalising Scottish Business (SP Paper 719).
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