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7th – 8th June, 2012
PROCEEDINGS OF THE 7th BUSINESS IN THE PARLIAMENT
CONFERENCE
Published by the Economy, Energy and Tourism Committee on behalf of The Scottish Parliament and The Scottish Government, September 2012
CONTENTS Page
Programme 1 List of delegates 4 Notes and background papers from the discussion sessions 14 Transcript of proceedings 28
1
PROGRAMME
“The importance of entrepreneurship and internationalisation to promote economic growth”
Thursday 7th June, 2012 6.00pm 6.00pm 7.30pm 10.00pm
Guests arrive Drinks reception – Hosted by Tricia Marwick MSP, Presiding Officer (Main Public Hall) Formal Dinner (Garden Lobby) Close
Friday 8th June, 2012 8.15am Arrival and registration with refreshments and a light breakfast
9.00am Welcome – Tricia Marwick MSP, Presiding Officer (Debating Chamber)
9.10am Views from the Committee – Murdo Fraser MSP, Convener of the Economy, Energy
and Tourism Committee
9.20am
Views from the business community – Sir Tom Hunter
9:45am 10.10am
Scottish Government view - The First Minister, The Rt. Hon Alex Salmond MSP Workshops (Committee Rooms)
12.20pm Question and answer session on Entrepreneurship and Internationalisation
(Debating Chamber)
Panel consisting of Fergus Ewing MSP, Minister for Energy, Enterprise and Tourism; Murdo Fraser MSP, Convener; Patrick Harvie MSP, Member; and John Park MSP, Member, Economy, Energy and Tourism Committee
1.15pm Closing speech – John Swinney MSP, Cabinet Secretary for Finance and Sustainable
Growth
1.30pm Closing Remarks – Tricia Marwick MSP, Presiding Officer
2
Workshops These workshops will look at entrepreneurialism, innovation and risk-taking within each of the subjects identified for the workshop. Each of the speakers will provide a brief insight into the subject matter from their perspective by telling their story. An open discussion for all delegates in the workshop will follow.
Workshop Speakers
1 – Starting a business Committee Room 1 CHAIR: John Swinney MSP, Cabinet Secretary for Finance, Employment and Sustainable Growth
Geoff Leask, Director, The Prince’s Scottish Youth Business Trust
Alison Grieve, Chief Executive, Safetray Products Ltd
Professor Sara Carter, Hunter Centre for Entrepreneurship
2 – Generating economic growth from the research base Committee Room 2 CHAIR: Michael Russell MSP, Cabinet Secretary for Education and Lifelong Learning
Dr Siobhan Jordan, Director, Interface
Professor Andy Porter, Institute of Medical Sciences
Ian Ritchie, Chairman of Iomart Group
3 – Business transitions: scaling-up, mergers, EBOs and MBOs, and succession planning (in family businesses) Committee Room 3 CHAIR: Fergus Ewing MSP, Minister for Energy, Enterprise and Tourism
Jim McColl, Clyde Blowers
Professor Colin Mason, Hunter Centre for Entrepreneurship
Dick Philbrick, Chairman, Clansman Dynamics
4 – Going international and taking the export challenge Committee Room 4 CHAIR: Murdo Fraser MSP, Convener, Economy, Energy and Tourism Committee
Malcolm Leask, Vice President Sales, UK and International, International Beverage
Malcolm Connolly, Cyberhawk Innovation
James Lang, Marketing Director, Scottish Leather Group
5 – New business models (e.g. co-operatives, social enterprises etc) and ways of working Committee Room 5 CHAIR: Fiona Hyslop MSP, Cabinet Secretary for Culture and External Affairs
Sera Miller Chairman (Scotland) at Marketing Industry Network and Chief Executive at Material_GROUP
Susan Aktemel, Director, Impact Arts
6 – How can larger, established companies help through development of supply-chains and B2B? Committee Room 6 CHAIR: Brian Adam MSP, Minister for Parliamentary Business and Chief Whip
Jason Martin, Round 3 Programme Director, ScottishPower Renewables
Steve Nicol, Chief Executive, Red Spider
3
4
LIST OF DELEGATES WHO REGISTERED TO ATTEND THE 7TH BUSINESS IN THE PARLIAMENT CONFERENCE AND DINNER
Conference dinner, 7 June
First Name Last Name MSP Organisation
Brian Adam MSP
Steve Aiken British Irish Chamber of Commerce
Robert Aitken MD Power Distribution Contracting
Charles Allen DHL
David Anderson South Ayrshire Council
John Anderson The Entrepreneurial Exchange
Kanika Bansal University of Edinburgh
Colin Beattie MSP
Graham Bell Graham Bell Associates Ltd
Robert Bell AVC Scotland
Glen Bennett EAE Ltd
David Birrell Edinburgh Chamber of Commerce
Graham Birse Edinburgh Chamber of Commerce
Gillian Black OPITO
David Blyth Amor Group
Blair Bowman World Whisky Day
Sarah Boyack MSP
Chic Brodie MSP
Joe Brown Scottish Government
Gavin Brown MSP
Anne Marie Cairns Optos
Aileen Campbell MSP
Mike Cantlay VisitScotland
Sara Carter Strathclyde Business School
Conrad Chin
Gary Corden AVC Scotland
Angela Constance MSP
Brian-Stewart Coxon
Maggie Craig Association of British Insurers
Martin Craig Siemans PLC
Bruce Crawford MSP
Michael Crow RBS
Prof. James Curran SEPA
Ewan Daniel EMEC
Colin Dalrymple STF Limited
Sarah Deas Co-operative Development Scotland
Roy Devon Scottish Parliament
Graeme Dey MSP
Gordon Deuchars GA Engineering
Colin Donald Sunday Herald
Bob Donnelly Return 2 Scene
5
Joyce Duncan Impact 21
Jim Duffy Entrepreneurial Spark
Andrew Dyce CBI Scotland
Campbell Evans Scotch Whisky Association
Fergus Ewing MSP
Ian Ewing
Linda Fabiani MSP
James Findlay James G Findlay Ltd
John Forteith Forteith Foodservice
Murdo Fraser MSP
Chris Gaffney Johnstons of Elgin
Norman Geddes Fraser Coogan Ltd
Archie Gibson Agrico UK Ltd.
Rob Gibson MSP
Fiona Godsman Scottish Institute for Enterprise
Mary Goodman Federation of Small Businesses
David Goutcher Polybius Games Ltd
Alison Grieve Safetray Products Ltd
Tracy Griffin Federation of Small Businesses
Rhoda Grant MSP
Zahir Haidar Computer Division
Linda Hanna Scottish Enterprise
Anne-Marie Hamill Escape Recruitment Services
Susan Harkins Edinburgh Chamber of Commerce
Richard Hartland Moray Council
Patrick Harvie MSP
Gordon Henderson Federation of Small Businesses
John Hughes Edinburgh Chamber of Commerce
Ken Hughes Scottish Parliament
Ewan Hunter Hunter Search
Martin Hunter MH Training and Recruitment
Sir Tom Hunter West Coast Capital
Lady Hunter
Sandra Hutton NMS Financial Renewables
Fiona Hyslop MSP
Duncan Irvine Barclays Corporate Banking
Stephen Imrie Scottish Parliament
Lorna Jack Law Society of Scotland
Bill Jamieson
Mark Jardine The People's Project
Craig Johnstone Giglets Ltd
Christine Jones AGCC
Siobhan Jordan Interface
John Kilgour Fife Group
Brian Keating URTV
Owen Kelly Scottish Financial Enterprise
John Kilgour Fife Group
6
Billy Kirkwood RDK/Robert Ryan
James Lang Scottish Leather Ltd
Malcolm Leask International Beverage Holdings
Geoff Leask PSYBT
Stephen Leckie Scottish Tourism Alliance
Darren Lester The CADCube
Kenneth Lewandowski Emblation Microwave
Hugh Lightbody CoSLA
Vikki Little Scottish Parliament
Richard Lockhart Adam and Company plc
David Lonsdale CBI Scotland
Susan Love Federation of Small Businesses
Kristina Macauley Global Identity Ltd
Anne MacColl Scottish Development International
Willie Mackie Clydesdale Bank
Ralph Macleod Galloway & MacLeod Ltd
Graham MacQueen MacQueen Bros Ltd
Jenny Marra MSP
Teresa Martin Scottish Government
Tricia Marwick MSP
John Mason Scottish Government
John Mason MSP
Jim Mather Gael Ltd.
Joan McAlpine MSP
Liam McArthur MSP
Lewis McDonald MSP
Patrick McDonald Superior Catering
Margaret McDougall MSP
Christina McKelvie MSP
Jamie McGrigor MSP
Brian McGuire Entrepreneurial Spark
Cathy McIssac Scottish Government
Arthur McIvor Scottish Parliament& Business Exchange
Fiona McLeod MSP
Glen McLennan Opus
Stuart McMillan MSP
Lauren McNicol CBI Scotland
Jim McPhie McPhie's Bakery
Ronnie Melrose IBM
Alan Merchant Contract Solutions Grampian Ltd.
Angel Mesado Govt. of Catalonia, UK Delegation
Caroline Millar The Hideaway Experience
Robert Miller McAdam King Business Psychology Ltd
Sera Miller Material Marketing and Communications
Nanette Milne MSP
Margaret Mitchell MSP
Martin Moran National Grid
7
Beatrice Morrice Scotch Whisky Association
Steve Nicol Red Spider
Robin Niven Loch Leven's Larder
Adrian Neville 1st Architects
Wendy Nisbet Kernis Communications
Danny O'Brien BAE Systems
John Park MSP
Roland Partridge EoSurgical
Siobhan Paterson Scotch Whisky Association
Dick Philbrick Clansman Dynamics
Prof. Andy Porter NovaBiotics Ltd
Peter Quinn ECCM
Ally Rae BP
Margaret M Rafferty Ceteris (Scotland) Ltd
Alistair Reid Abbey Tool and Gauge
Jim Reid Scottish Enterprise
Willie Rennie MSP
Andrew Richards Morrison Construction
David Richardson Federation of Small Businesses
David Ripley Oil & Gas UK
Kirsty Rimmer Scottish Parliament
Ian Ritchie Iomart plc
Belinda Roberts WeDO Scotland
Dennis Robertson MSP
Simon Robertson Joseph Robertson Ltd
Alastair Ross Pinsent Masons
Alan Russell Fife Chamber of Commerce
Michael Russell MSP
Saftar Sarwar Kingdom Capital Partners
Mary Scanlon MSP
John Scott MSP
Nicholas Scullion Scullion Law
Ian Shearer Scottish Retail Consortium
Ricky Singh Team Singh
Richard Simpson MSP
Ronnie Smith Business Enterprise Scotland
Elizabeth Smith MSP
Norman Springford Apex Hotels Ltd
Craig Spence Highlands & Islands Enterprise
Kevin Stewart MSP
Brian Stewart - Coxon
Dr George Stevenson GSS Developments Ltd
Paul Stevenson GSS Developments
John Swinney MSP
Stewart Stevenson MSP
George Taylor Taypack Ltd
John Taylor National Grid
8
Steve Taylor Ideeas Ltd
Diane Thomson Pfizer Ltd
Duncan Thorp Social Enterprise Scotland
Michael Urquhart Gordon & MacPhail/SCDI
David Valentine Business Gateway Scotland Board
Andrew Watson Scottish Power
David Watt Institute of Directors
Willie Watt Subsea 7
Maureen Watt MSP
Valerie Watts Aberdeen City Council
Petra Wetzel WEST Beer
Paul Wheelhouse MSP
Joyce White West Dunbartonshire Council
Keith Winter Fife Council
Tim Williams Millstream Associates Ltd
Scott Willow Goldstar Services
Andy Willox Federation of Small Businesses
John Wilson MSP
Leigh Wilson Jetlogic Ltd
Keith Winter Fife Council
Stewart Wood Medtronic
Becky Woodhouse Pure Spa
Conference, 8th June
First Name Last Name Organisation
Brian Adam MSP
Steve Aiken British Irish Chamber of Commerce
Robert Aitken MD Power Distribution Contracting
Susan Aktemel SPEAKER Impact Arts
Charles Allen DHL
David Anderson South Ayrshire Council
John Anderson The Entrepreneurial Exchange
Richard Baker MSP
Colin Beattie MSP
Graham Bell Graham Bell Associates Ltd
Gordon Bell STEP
Robert Bell AVC Scotland
Glen Bennett EAE Ltd
David Birrell Edinburgh Chamber of Commerce
Graham Birse Edinburgh Chamber of Commerce
Gillian Black OPITO
Bill Blair Edinburgh Bioquarter
David Blyth Amor Group
Colin Borland Federation of Small Businesses
Blair Bowman World Whisky Day
9
Sarah Boyack MSP
Stephen Boyd STUC
Chic Brodie MSP
Gavin Brown MSP
Keith Brown MSP
Joe Brown Scottish Government
Stephen Budd ClearReturns
Anne Marie Cairns Optos
Aileen Campbell MSP
Rona Campbell CBI Scotland
Mike Cantlay VisitScotland
Sara Carter SPEAKER Strathclyde Business School
Gary Corden AVC Scotland
Michael Connolly SPEAKER Cyberhawk Innovation
Maggie Craig Association of British Insurers
Martin Craig Siemens PLC
Michael Crow RBS Group
Prof. James Curran SEPA
Ewan Daniel AMEC Group
Colin Dalrymple STF Limited
Sarah Deas Co-operative Development Scotland
Graeme Dey MSP
Gordon Deuchars GA Engineering
Roy Devon Scottish Parliament
Colin Donald Sunday Herald
Bob Donnelly Return 2 Scene
Joyce Duncan Impact 21
Jim Duffy Entrepreneurial Spark
Andrew Dyce CBI Scotland
Charlotte Elmer Heineken UK
Campbell Evans Scotch Whisky Association
Fergus Ewing MSP
Ian Ewing Sovereign
James Findlay James G Findlay Ltd
John Forteith Forteith Foodservice
Murdo Fraser MSP
Chris Gaffney Johnstons of Elgin
Norman Geddes Frazer Coogans Ltd
Archie Gibson Agrico UK Ltd.
Rob Gibson MSP
Fiona Godsman Scottish Institute for Enterprise
Mary Goodman Federation of Small Businesses
Peter Gordon Barclays
Laura Gordon IoD
David Goutcher Polybius Games Ltd
Paul Grice Scottish Parliament
Alison Grieve SPEAKER Safetray Products Ltd
10
Tracy Griffin Federation of Small Businesses
Rhoda Grant MSP
Zahir Haidar Computer Division
Linda Hanna Scottish Enterprise
Dr Jim Hamill Energise 2.0
Anne-Marie Hamill Escape Recruitment Services
Bernie Hamilton Babcock
Joanna Hardy Scottish Parliament
Susan Harkins Edinburgh Chamber of Commerce
Richard Hartland Moray Council
Patrick Harvie
Ann Henderson STUC
Gordon Henderson Federation of Small Businesses
Sharon Hodgson East Ayrshire Council
John Hughes Edinburgh Chamber of Commerce
Ken Hughes Scottish Parliament
Ewan Hunter Hunter Search
Martin Hunter MH Training and Recruitment
Sir Tom Hunter West Coast Capital
Sandra Hutton NMS Financial Renewables
Duncan Irvine Barclays Corporate Banking
Stephen Imrie Scottish Parliament
Lorna Jack Law Society of Scotland
Bill Jamieson
Mark Jardine The People's Project
Craig Johnstone Giglets Ltd
Christine Jones AGCC
Siobhan Jordan SPEAKER Interface
John Kilgour Fife Group
Alan Kilpatrick Devro plc
Billy Kirkwood RDK/Robert Ryan
Brian Keating URTV
Fraser Kelly Social Enterprise Scotland
Owen Kelly Scottish Financial Enterprise
James Lang SPEAKER Scottish Leather Ltd
Malcolm Leask SPEAKER International Beverage Holdings
Geoff Leask SPEAKER PSYBT
Stephen Leckie Scottish Tourism Alliance
Darren Lester The CADCube
Kenneth Lewandowski Emblation Microwave
Hugh Lightbody Cola
Vikki Little Scottish Parliament
Richard Lockhart Adam and Company plc
Richard Lochhead MSP
David Lonsdale CBI Scotland
Susan Love Federation of Small Businesses
Kristina Macauley Global Identity Ltd
11
Roddy MacDonald Scottish Government
Anne MacColl Scottish Development International
Stuart Mackinnon FSB
Ralph MacLeod Galloway & MacLeod Ltd
Donald Macrae Lloyds Banking Group Scotland
Graham MacQueen MacQueen Bros Ltd
Jenny Mara
Teresa Martin Scottish Government
Jason Martin SPEAKER Scottish Power Renewables
Colin Mason SPEAKER University of Strathclyde
John Mason Scottish Government
John Mason MSP
Jim Mather Gael Ltd.
Ian S McCall Scottish Government
Joan McAlpine MSP
Liam McArthur MSP
Jim McColl SPEAKER Clyde Blowers Capital
Patrick McDonald Superior Catering
Stuart McGoldrick Devro (Scotland) Ltd.
Jamie McGrigor MSP
Brian McGuire Entrepreneurial Spark
Cathy McIssac Scottish Government
Arthur McIvor Scottish Parliament& Business Exchange
Ruth McKay Federation of Small Businesses
Fiona McLeod MSP
Ashleigh McLennan SCDI
Glen McLellan Opus
Stuart McMillan
Lauren McNicol CBI Scotland
Jim McPhie McPhie's Bakery
Niall McShannon Clydesdale Community Initiatives
Ronnie Melrose IBM
Alan Merchant Contract Solutions Grampian Ltd.
Angel Mesado Govt. of Catalonia, UK Delegation
Caroline Millar The Hideaway Experience
Robert Miller McAdam King Business Psychology Ltd
Sera Miller SPEAKER Material Marketing and Communications
Tim Mouncer
Martin Moran National Grid
Beatrice Morrice Scotch Whisky Association
Steve Nicol SPEAKER Red Spider
Robin Niven Loch Leven's Larder
Adrian Neville 1st Architects
Wendy Nisbet Kernis Communications
Danny O'Brien BAE Systems
John Park MSP
Roland Partridge EoSurgical
12
Siobhan Paterson Scotch Whisky Association
Ed Payne Scottish Development International
Dick Philbrick SPEAKER Clansman Dynamics
Prof. Andy Porter SPEAKER NovaBiotics Ltd
Colin Quinn Be Positive Analysis Solutions
Ally Rae BP
Margaret M Rafferty Ceteris (Scotland) Ltd
Alistair Reid Abbey Tool and Gauge
Jim Reid Scottish Enterprise
Willie Rennie
David Richardson Federation of Small Businesses
David Ripley Oil & Gas UK
Ian Ritchie SPEAKER Iomart plc
Andrew Richards Morrison Construction
Dennis Robertson MSP
Simon Robertson Joseph Robertson Ltd
Alastair Ross Pinsent Masons
Gordon Ross Western Ferries (Clyde) Ltd
Malcolm Roughead VisitScotland
Alan Russell Fife Chamber of Commerce
Michael Russell MSP
Saftar Sarwar Kingdom Capital Partners
Nicholas Scullion Scullion Law
Ian Shearer Scottish Retail Consortium
Ricky Singh Team Singh
Richard Simpson
Ronnie Smith Business Enterprise Scotland
Norman Springford Apex Hotels Ltd
Craig Spence Highlands & Islands Enterprise
Jenny Stanning Oil & Gas UK
Kevin Stewart
Brian Stewart - Coxon
Dr George Stevenson GSS Developments Ltd
Paul Stevenson GSS Developments
Stuart Stevenson
George Taylor Taypack Ltd
John Taylor National Grid
George Taylor Taypack
Steve Taylor Ideeas Ltd
Alice Telfer ICAS
Leon Thompson EventScotland
Diane Thomson Pfizer Ltd
Duncan Thorp Social Enterprise Scotland
Michael Urquhart Gordon & MacPhail/SCDI
David Valentine Business Gateway Scotland Board
Mark Wallace intelligent Storage Solutions
Catherine Ward Federation of Small Businesses
13
Andrew Watson Scottish Power
David Watt Institute of Directors
Willie Watt Subsea 7
Maureen Watt
Petra Wetzel WEST Beer
Paul Wheelhouse MSP
Joyce White West Dunbartonshire Council
Tim Williams Millstream Associates Ltd
Scott Willow Goldstar Services
Andy Willox Federation of Small Businesses
John Wilson MSP
Leigh Wilson Jetlogic Ltd
Keith Winter Fife Council
James Withers Scotland Food & Drink
Jane Wood Scottish Business in the Community
Paul Wood West Highland Publishing Company Ltd
Steve Wood Medtronic
Becky Woodhouse Pure Spa
14
NOTES OF THE WORKSHOPS As part of this year’s Business in the Parliament Conference, six workshops were held for delegates. Each workshop was hosted by either a minister, or a member of the Parliament’s Economy, Energy and Tourism Committee. Notes of each session have been prepared by officials from the Scottish Government. Disclaimer The views expressed in these notes may not necessarily represent those of all the delegates that took part in each session, or the opinions of the Scottish Government or Scottish Parliament. WORKSHOP 1 Workshop Report- Starting a business. Speakers: Geoff Leask, Prince’s Scottish Youth Business Trust, Alison Grieve, Safetray Products Ltd and Professor Sara Carter, Hunter Centre for Entrepreneurship, University of Strathclyde. Host: John Swinney MSP, Cabinet Secretary for Finance, Employment and Sustainable Growth 1. The session began with 3 presentations from the three speakers. Points arising from these presentations included:
The challenges faced by young entrepreneurs including; access to finance, access to business networks and on-line activity.
Businesses complain about lack of support however this is unfounded, business support is readily available in Scotland and entrepreneurs are grateful for the support they receive.
Power of Intellectual Property – patents are complicated it would be good to see an SG backed patent insurance scheme similar to the one in Denmark.
See more Sweat Equity, larger businesses supporting financial “suppliers”.
Crowd funding – opportunity for start-ups to access capital, keen to hear what Harper & McLeod are doing.
There is a BA Business Enterprise degree through the University of Strathclyde through the Hunter Centre for Entrepreneurship. It is hoped that this course helps make a difference to the business birth rate.
2. The following points arose from the plenary session: Patent Insurance
The SG could provide money to protect an idea, sponsored by SG money, then the money can be paid back once successful and sales generated.
SIE help for students to identify ideas that can be turned into a business, they have a small patent fund (£16,000).
Should SG be doing more in this area. How to sell well
Is enough being done to support new businesses in selling? Inward Investment
A triple helix partnership between Investors, Government and Industry. Why could Scotland not be the first country to try this model to draw inward investment into the country and give a flat rate corporation tax of 10% to kick start projects of this sort.
15
Industry feedback
Some industry feed-back should be gathered as to what areas are well supported by SDI, SE, Business Gateway, PSYBT.
Capital/Funding/Tax Breaks
Could money be diverted for venture capital and more work with angels.
Introduce a Scottish Entrepreneurs Fund – bid for grants, run by entrepreneurs not led by SE.
Start-up Chile, good example – Chilean Government invested £5m.
Possibility of tax breaks if a company invests in Entrepreneurial Fund.
There is a lack of funding for local rural businesses. Younger Generation
Young people should be taught about business at a younger age.
Young people need to see more of the newer entrepreneurs.
Taking businesses to school to inspire children.
Give young people the opportunity to make choices. Awareness
Lack of awareness of what business support is available.
Since 2010 - awareness of the Business Gateway and its services has risen from 26-41%, seen as a “trusted” source of information to businesses.
3. The panel responded with the following points:
Patent insurance is a very good idea.
Majority of focus is on the younger generation as they are the new generation, however the biggest deterrent for entrepreneurs is wage uncertainty.
Patent insurance that is SG backed would mean it is not profit hungry, public sector should not run all initiatives.
Public sector has to be open to new products and businesses. 4. The Cabinet Secretary summed up the discussion with the following points:
Curriculum for Excellence is already giving children a much broader education.
Support is available, Business Gateway is the access point.
Accountants/lawyers should be assisting to provide some business advice.
Move on from the bank problems, get the banks on our side.
Banks are now lined up with growth potential companies through SE.
Patent insurance is a good idea.
16
WORKSHOP 2 Workshop Report- Generating Economic Growth from Scotland’s Research Base Speakers: Dr Siobhan Jordan, Interface, Professor Andy Porter, University of Aberdeen and Ian Ritchie, Iomart Group. Host: Michael Russell MSP, Cabinet Secretary for Education and Lifelong Learning The Cabinet Secretary opened the session by setting the scene on current research activity in Scotland. The free education system in Scotland, the success of our universities, and the funding package that was made available meant that the bulk of research within Scotland now takes place in our higher education institutions and research institutes rather than being driven by industry. There were strengths and weaknesses in this set up but more had to be done to involve Scotland’s SME base. The Cabinet Secretary then invited presentations from the following:
Dr Siobhan Jordan, Director of Interface
Professor Andy Porter, Chair in Molecular and Cell Biology, University of Aberdeen
Ian Ritchie, Chairman of Iomart Group The main points that arose during these presentations were:
Interface aims to encourage not just collaboration between one business and a university, but tries to encourage a group of businesses to collaborate together with academics over a shared problem for a shared solution. The advantage of this is that by pooling resources, more funding is available to find a solution and there is less duplication.
There is a strong pipeline of support now available that includes Interface, Innovation Vouchers, KTP, Horizon 2020.
Aberdeen has a growing reputation for drug discovery and is the largest centre for biologics drug discovery in the UK after Cambridge
If a Scottish business/HEI can be at the forefront of developing a drug, then the economic benefits for Scotland would be significant.
Drug IP patents are expensive for universities to maintain, taking often 12 years plus to see any value.
The current funding climate makes accessing funding very difficult, however there were signs of hope with venture capital companies Rock Spring and Morningside targeting Scotland
The Scottish Science Advisory Council is due to publish a report on Innovation soon Other points raised in the discussion session included: Entrepreneurial Interests from Young People
There was significant amount of discussion in this area and what could be done to achieve a step change so that this became engrained via our education system.
Suggestions included sending entrepreneurs to visit schools – either well known entrepreneurs or local success stories
Encourage wider dissemination of current good practice. A number of initiatives already exist such as Heriot Watt University teaching business skills through all of their courses and University of Aberdeen graduating a small group of students in ‘bio-business’. These were great examples but were on a small scale
Could Scottish Government push some of these initiatives out wider
Suggestion of a ‘robot wars’ type initiative – either school age or university age entrants working with Scottish businesses
Add entrepreneurial element into Curriculum for Excellence
17
Social Media
A greater use of social media to encourage ‘crowd funding’
Make use of social media to make public Scottish innovations and excellent research
Develop proposals for a Scottish version of The Apprentice. Possibly called ‘The Entrepreneur’, with Tom Hunter taking on the Alan Sugar role. This would show a different side of Scotland than that portrayed in shows such as ‘The Scheme’.
Europe
Many academics have a proven track record of attracting European funding – but if they work with Scotland’s SME base they can attract greater amounts of funding for collaborative projects and also pass on expertise of engaging with Europe to the SME base
Business Schools
Business Schools are not equipping graduates with entrepreneurial skills, many are unable to write a basic business plan
Often little collaboration within a university between the business school and the rest of the university
Other points
The SSAC Innovation report needs to become a living document so that it can be built on a progress can be monitored.
Academics often have an excellent network of contacts that could be utilised by businesses. Encourage academics to disseminate some of this
At present the Scottish Investment Bank does not invest in life sciences, could this be changed.
18
WORKSHOP 3 Workshop Report- Business Transitions: scaling up, mergers, EBOs and MBOs and succession planning (in family businesses). Speakers: Jim McColl, ClydeBlowers, Professor Colin Mason, Hunter Centre for Entrepreneurship and Dick Philbrick, Clansman Dynamics. Host: Fergus Ewing MSP, Minister for Energy, Enterprise and Tourism The workshop had an over-arching discussion point of: what in practice can all parts of the public sector do to help pursue business growth. Summary The three main issues emerging from the discussion and identified as needing addressed were:
Alignment between entrepreneurs/businesses and young people in secondary and further education
Mentoring for businesses (e.g. experienced entrepreneurs sitting on smaller companies’ board of management)
Gaps in the support available for businesses 1. The Minister for Energy, Enterprise and Tourism chaired the workshop. The session began with 3 presentations from Jim McColl of Clyde Blowers, Professor Colin Mason of The Hunter Centre for Entrepreneurship and Dick Philbrick of Clansman Dynamics. Points arising from these presentations included:
Scotland doesn’t have enough business HQ’s based here and we need to do something to attract businesses
A big percentage of SME’s in Scotland represent very small parts of the market they are in and they don’t analyse the market to find where and when opportunities are available. If they did this, there is potential for them to double in size
There is a lack of R&D within Scottish businesses
A lack of language skills in Scotland has an effect on exporting
Support should focus on commercialisation rather than just supplying technology 2. The following points arose from the plenary session:
A plea was made to the SG to raise the element of focussing on growth and start pulling stats/evidence together including looking at what happens to business sometime after start-up rather than just focus on start-ups
There is a need to focus on small businesses individually and what they can offer as many feel excluded as they don’t fit a certain criterion. Focus should be on the business not on the sector
There needs to be greater integration between colleges and employers as this will help address the skills gap that exists within many sectors. Not all colleges are open to this and it would be helpful if the SG could facilitate this integration
Business thinking should be developed at an earlier stage and young people should be encouraged to think earlier about what they want to do therefore, core competencies could then be developed. The application of business thinking is just as important as skills
Alumni from programmes such as the Scottish Enterprise rural leadership programme could help businesses in a mentor capacity, for example, sitting on the board of management
19
More collaboration between sectors (e.g. food & drink and tourism) would mean real wins for the Scottish economy
There are lessons to be learnt when Scottish businesses are selling themselves internationally and these lessons should be brought back to Scotland. For example, what is available to us and where can we find it?
There is a need to re-invent the sense of “community” within Scotland. For example, high-lighting local produce on restaurant menus
With regards to the construction industry, the current climate and procurement rules militate against small companies. Continuing budget cuts means that there is no room for R&D and there is a likelihood that R&D will only come from larger companies
There is need for a mechanism that can identify potentially high-growth companies. There are many resources available to leading business within an area but how can they utilise them effectively in going forward?
There is a gap in the Government support network for medium-sized businesses. There are many businesses trying to grow but don’t know how to as support such as Business Gateway and Small Business Bonus Scheme is less visible
Support made available by Scottish Enterprise could be more pro-active and businesses should note need to tailor its nature in order to receive support
Not all companies are suitable for growth as they are not set up in that way. However, they should still receive assistance and be allowed to remain individual
There is need for increased efficiency in identifying risk within the Scottish business environment
There is a lack of passion in Scotland along with a ‘need to succeed first time’ culture and this results in a huge loss in opportunity for certain sectors.
3. Senior officials from The Scottish Government and Scottish Enterprise responded with the
following points:
Lots of effort has gone into partnership recently, especially with colleges. This work is in transition at the moment and may help with the issue of integration between the business community and schools/colleges
A lot of work on support carried out by BIS is on a digital platform and this has caused difficulties for some people. The Scottish Government, Scottish Enterprise and Highlands and Islands Enterprise are focussing on their approach when people request assistance, such as the account-managed approach.
The Minister for Energy, Enterprise and Tourism has recently carried out work, looking at how the Government can help businesses who have short term problems such as cash flow.
Some banks have a mentoring scheme and they are represented on the boards of companies experiencing problems. However, this may be more beneficial to companies hoping to grow
Scottish Enterprise focuses on all companies not just those in key sectors
20
4. The Minister summed up the discussion with the following points:
Learning about business is a learning element that needs to be integrated into schools so children know what it is they want to do from an early age and can be prepared with the correct skills and thinking. Enhancing engagement between entrepreneurs and schools is an issue that needs to be unlocked.
He asked for a show of hands to express support for the idea of bringing the awareness of business into school and an overall majority expressed their support.
The idea of working together as a ‘Team Scotland’ is something the Minister wants to build upon including the idea of mentoring for small businesses
He acknowledged that a gap does exist in support for those companies who are not start-up businesses or account-managed by Scottish Enterprise
Many conversations the Minister has previously had with the business community in Scotland has led to The Scottish Government’s consultation on Better Regulation
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WORKSHOP 4 Workshop Report- Going international and taking the export challenge Speakers: Malcolm Leask, International Beverage, Malcolm Connelly, Cyberhawk Innovation and James Lang, Scottish Leather Group. Host: Murdo Fraser MSP, Chair of the Economy, Energy and Tourism Committee INTRODUCTION The Group heard from three successful exporting companies from a variety of different sectors:
Inverhouse Distillers: exports Scotch Whisky to over to 90 countries with over 80% of revenues from international exports.
Cyberhawk Innovation; founded three years ago and now exporting their service to the Middle East, 80% success rate on winning contracts.
Scottish Leather Group: family business and increasingly employee owned. Core business is leather for the automotive and aviation industries (Volvo biggest customer). Won Queen’s Award for Exporting in 2012.
Each gave a summary of their own experience and thoughts of the learning, opportunities and challenges they had dealt with. KEY POINTS Through the discussion a number of key points came up from both the participants and audience. These are summarised below: Exporting helps diversification Exports allow for diversification this can help de-risk and drive efficiencies. For example one major reason for Cyberhawk to look at international markets was the very weather dependant nature of their product (this meant in winter there was a lull in Scottish work). Generating work in the Middle East allows them to have year round business. Scottish Leather diversified to providing leather for furniture, to providing leather for automotive and aviation industries they are now actively diversifying into other forms of transportation e.g. for the bus, coach, rail and marine industries. Know you market A key lesson was to do your market research and then develop a strategy to enter new markets. Planning as being essential. All three companies talked about the need to understand the market and plan how to best engage with the market. SDI were seen as very helpful in providing market intelligence and helping to develop an international Strategy. Using provenance (e.g. customer brands you have work with) can help attract new customers. The scale you enter a market needs to be commensurate with your capacity to deliver against orders/ contracts.. Innovation is absolutely critical Alongside diversification came the need to innovate. All saw innovation as key to their success and were continually innovating e.g. Inverhouse Distillers were pursuing over 100 new product developments. Countries have slightly different needs and the ability to change your produce to suit the market is important. Protection of Intellectual Property can be important in the market place while demonstrating environmental sustainable business practices is becoming more important to customers. Local knowledge critical Understanding the local market including legislation, customs etc.. was seen as very important. As was developing relationships and having a good cultural understanding of the country you are
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doing business in. Examples of inappropriate business behaviour (due to lack of awareness / cultural understanding) leading to a loss of business were given to emphasise the point. In some markets (e.g. Germany) being perceived as being local or having a local presence is important to accessing customers. Skills the area of skills was discussed and the relevance to the companies. Vocational expertise was seen as critical and young people understanding the world of work. For exporting sales and marketing skills were also seen as an area where Scotland could do better. Language skills can be an issue is some markets, however just as important was being aware of cultural differences. Exporting is a learning journey in itself, general view was that the act of exporting challenges you to continue to learn. Professional advice: This was seen as important by participants and a general view was that Scotland was pretty well served, although it could be expensive. Having in place firm written legal contracts was an area worth seeking good advice, as after the event it can be very costly if you get into a legal dispute. General view was the preference to have contracts under Scots law if possible. Need to be aware of, and fully recognise, the requirements of the UK bribery act. Web presence and social media All saw this as of growing importance. All also recognised they could be a lot better at personally and looked to younger members of staff to develop solutions. Some areas highlighted included:
Web presence and pricing strategy important if dealing in different markets. Tailoring your website to different countries is important e.g. using local language.
Evidence that a web presence has directly led to customer contact and customer orders (e.g. being high on a Google search)
None of the companies had blogs but all thought this, and other social media, as an area they should explore more.
Airlinks A mixed view. A frustration from some, particularly around Heathrow, while others felt for them the present routes e.g. to the Middle East, suited their needs. In general where Scotland has direct flights they are good, but Scotland could benefit from more direct flights
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WORKSHOP 5 Workshop Report- New business models (co-operatives, social enterprises etc) and ways of working. Speakers: Sera Miller, Material_Group and Susan Aktemel, Impact Arts Host: Aileen Campbell MSP, Minister for Children and Young People.
Summary Main points emerging from the plenary session:
Not enough support to establish Social Enterprises - Local Authorities are perceived as not having an understanding of what Social Enterprises are and the community benefits they can provide. LA representatives did not challenge this perception and indeed would like to see more local procurement.
Procurement- current process encourages scale and does not allow for Social Enterprise's to bid for part contracts. Keen to see comments fed into the Sustainable Procurement Bill perhaps by encouraging a % of contract clause to Social Enterprises? Also there is an opportunity for the sector to input to consultation on Community Empowerment and Renewal Bill in relation to delivery of public services.
Lack of general support particularly finance but no different than majority of small businesses. Business Gateway identified as best place for advice and support but not money!
Traditional Corporate Social Responsibility model was outdated. Need to think in new ways i.e. could larger organisations with Health and Safety/Occupational Health skills offer this expertise to other businesses.
A couple of successful entrepreneurs in attendance had difficulty identifying how they could give something back utilising the Social Enterprise model, Social Investment Scotland will follow these up separately.
Ensure that loss of industry examples from previous generations i.e. Inverclyde – lessons should be learnt from this and the experience built on for areas such as Moray etc.
Introduction The Minister welcomed the speakers and attendees to the workshop and encouraged everyone to participate in the discussion. The Minister then introduced Susan Aktemel Impact Arts followed by Sera Miller, Material_Group. Susan established Impact Arts http://www.impactarts.co.uk/ in 1994, as a social enterprise. It uses visual arts, music, drama, dance and technology to work in local communities with people of all ages. Using the arts as a tool for change – improving the environment, helping people get back into work or simply improve their quality of life was her main driver. It is a charitable business working in 12 Council areas with 42 full and part time staff working with in excess of 4,000 people a year. It takes a very corporate/business approach in how it delivers projects such as: Fab Pad, Creative Pathway, Eco Chic Fashion Freak, Craft Café, Urban Green and Young Gallery.
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The Future
To be the World’s leading community arts organisation.
To work with partners across the UK
Recently appointed new Chief Executive to take business forward
To be a viable business Sera Miller (CEO) of Material_Group- http://www.materialmc.com founded the business in 2003. It is an independently owned group of creative communication agencies based in Glasgow and employs 30 people specialising in building creative brand experiences across the PR, sponsorship, experiential, design & digital space, primarily working across sport, music & the arts. As a company, it aims to create an inspiring environment where employees feel valued and can thrive for the benefit of their own development, that of Material and of their client’s. The company has received several awards: Best small workplace in Scotland, 2011; and Best small place to work in UK, 2011. Currently it is working on events such as T in the park, Scotland Football games and the Scottish part of the current Olympic torch relay which she had to rush back to Glasgow. The shared responsibility approach has allowed company to punch above its weight with a management structure that is not top heavy. They are currently 2½ years into a 5 year plan and are speaking with Business Gateway, Scottish Development International and Skills Development Scotland. Looking at possible joint ventures for their work leading up to 20124. The Minister thanked both presenters for their overview of their business models. Key issues/comments from the open plenary session with the speakers: The Cooperative model for the bakery in Dunbar was touched on. This was the work of a group in the community with no support from the Local Authority. The support from Government was questioned and asked whether Local authorities could free up some trading opportunities for social enterprises. Recent research published by Scottish Government, 'Delivering Better Places' set out a five step process to achieving better places. The Christie Commission identified the need for creative and collaborative approaches to public services in Scottish places. There is a ladder of support mechanisms from start-up, but there will be those businesses that can’t get support - local authorities need to free up more trading opportunities. Sera Miller highlighted the importance of mentoring and have a Non Exec Director who has been with the business from the beginning available to offer advice and skills are important. It was noted that often Social Enterprises don’t know what skills they need to make the business a success, therefore, partnership working is critical. If traders were backing the Enterprise by coming together it was more likely to get bank funding. The Minister encouraged the group to feed comments into the consultation on Community Empowerment and Renewal Bill Choosing a particular structure/ business model is important when setting up. Others commented that there was difficulty accessing funding without track record difficult although the Triodos bank was identified as a potential avenue of finance. Both speakers commented that their overdraft was secured against their house and didn’t go looking for government money. Obviously now the conditions for starting a business had changed
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Benefits of community engagement for business do have an impact. Communities come together at a point of crisis; can there be greater engagement earlier? People now keen to consider ethical nature of suppliers so opportunities exist for different business models. Comments were made on whether larger companies could help smaller companies by subcontracting part of their work or help charitable organisations in a more tangible way. There are similar challenges for small companies and social enterprises. Both need to be viable. Critical that LA’s have a process to engage Social enterprise and understand community benefits. Local Authorities don’t seem to have a process for investing in social enterprises and it was felt that the language would need to be changed to measure community benefit/economic impact. Moray Economic Strategy – outlines the importance of local business and takes this into consideration in the procurement process. For example, procurement of rural bus services. Tender process for public sector procurement was highlighted as an issue. It was suggested that there should be a % community clause and skills legacy- best value? There is a lack of understanding of what social enterprises do and need to challenge Local Authorities through the Sustainable Procurement Bill.
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WORKSHOP 6 Workshop Report- How can larger, established companies help through development of supply chains and B2B? Speakers: Steve Nicol, Chief Executive of Red Spider, and Jason Martin, Round 3 Programme Director, Scottish Power Renewables. Host: Brian Adam MSP, Minister for Parliamentary Business and Chief Whip Mr Adam opened by reflecting on the potential for participants to learn from each other in a setting such as this, before introducing the two speakers, Each of the speakers emphasised the economic importance of the energy sector to Scotland, throughout the supply chain and support services. Throughout the discussions, several suggestions as to how larger firms could help smaller suppliers were made, including paying suppliers promptly. For example, Oil and Gas UK currently has a Supply Chain Code of Practice. However, it is not currently effective. More needs to be done to develop this scheme, and others like it, to make ‘having the badge’ necessary or desirable for all in the industry. Another suggestion related to ‘neutral funding’. Fulfilling a large order can strain the finances of an SME, and so customers should be prepared to allow invoicing of material on placement of an order. However, agreement on this point was not unanimous, with a larger firm questioning whether this transfer of risk was appropriate. Market power was discussed, and there was a suggestion that the notion of ‘fair trade’ could be expanded – market power should not be abused, and where SMEs take risks to produce innovative solutions, this should be rewarded. One area under discussion related to cultural differences between firms of different sizes, with a suggestion that larger firms could better recognise and understand the impact their ways of working can have on SMEs. One example given was where an SME had spent £20,000 on legal fees developing a master service agreement with a much larger customer, only for the customer to abandon that piece of work. The reported attitude of the larger firm was that this was not much money, so nothing to worry about. There was a suggestion that these sorts of expenses could be avoided by simplifying agreements significantly, or even by encouraging the development of industry standard terms and conditions. A general theme running throughout was that quality relationships built up over time give both parties in the supply chain confidence to increase activity with each other. Although there was the dilemma that this can restrict competition – in later discussion around the construction industry, concerns were raised that principal contractors often come with ‘ready-made’ supply chains, which are effectively closed to local SMEs. The group also discussed how government could help to support SMEs. There was a suggestion that the support ‘road-map’ could be simplified – there can appear to SMEs to be too many overlaps between Scottish Enterprise, SDI, SCDI, Chambers of Commerce, UKTI, local authorities, IoD and sector-specific bodies. The group also felt that major contracts (both public and private) could more often be broken down into smaller lots as a way of getting greater involvement from SMEs, and that there was perhaps some scope to look to what is done in other parts of Europe on this front. A contributor from the construction industry suggested that there was an increasing focus on cost to the exclusion of other factors, which resulted in prime contractors having to push this on down the supply chain. It was also suggested that longer-term framework agreements help to keep these firms competitive, and are therefore preferable to more ‘traditional’ one-off procurement exercises.
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One group member suggested that more industry standard benchmarks / could be created as a way of a small supplier being able to demonstrate competence and encourage confidence. The group went on to discuss skills. In particular, a clear opinion was expressed that the education system needs to be able to react to market circumstances, and to train people for the professions that are in short supply. It was also felt that there was a need for industry representatives to be able to get into schools, in order to start fostering interest early on. This is not always easy, however, because there is no ready-made network (for example of careers advisors) to tap into. The group were also of the clear opinion that capacity needed to be built amongst existing staff (relating back to the earlier point about long-term relationships between supplier and customer breeding confidence), to ensure quality of delivery, and that existing, skilled workers in sectors where jobs were being lost, should be targeted for retraining into growth industries. Finally, the Minister encouraged all those present to engage with the forthcoming consultation on the Sustainable Procurement Bill. Mr Adam MSP had to leave a few minutes before the end, so the Deputy Convener of the Finance Committee, John Mason MSP concluded events.
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TRANSCRIPT
Business in the Parliament
The importance of entrepreneurship and
internationalisation to promote economic growth
Friday 8 June 2012
[The Presiding Officer opened the meeting at 09:06]
Welcome
The Presiding Officer (Tricia Marwick): Good morning, ladies and gentlemen. I promise you that my speech will be shorter than Stephen Imrie’s list of housekeeping arrangements. As Presiding Officer, it is my pleasure to welcome you to the debating chamber of the Scottish Parliament for the seventh business in the Parliament conference.
I welcome back those of you who joined us for dinner last night. I hope that you enjoyed your evening, and it is good to see that you all made it in again this morning. I warmly welcome to the Scottish Parliament those of you who were unable to be with us last night.
Business in the Parliament is an annual conference that aims to connect Scotland’s business community with parliamentarians and ministers. It offers a unique opportunity for businesses from across the country to take part in debate and discussion with politicians and policy makers on a range of issues of importance to the Scottish economy.
My ambition for the Parliament is that it is responsive to developments and keeps pace with the issues of the day in the topicality and relevance of its discussions. A particular objective is to try to make it easier for key stakeholders—such as many of you who are here today—to engage with the work of the Parliament.
The business in the Parliament conference this year is themed on the importance of entrepreneurship and internationalisation to promote economic growth. Today’s plenary and breakout sessions will look at innovation and risk taking, and the role of entrepreneurs in growing the Scottish economy.
Scotland has a world-renowned tradition of innovators, creators, inventors and thinkers, from James Watt and Adam Smith, and my personal hero Mary Fairfax Somerville, who was the first person ever to be called a scientist—before Mary
Somerville, they were all men of science—to our growing international reputation for excellence in the field of life sciences.
Scotland also has a great tradition of entrepreneurship, with great innovators such as my fellow Fifer, Andrew Carnegie, who left Dunfermline as a boy and amassed his fortune through steel in the United States, and Thomas Blake Glover—the Scottish samurai—who founded Japan’s great Mitsubishi company.
Today, Scotland still has her entrepreneurs and her innovators: people with the confidence to strive beyond boundaries and with the aspiration to achieve great things. We will hear from some of those people today.
We will also examine the concept of internationalism. It is the role of Parliament and Government to bang the drum for Scotland overseas, to reach new client bases and attract business and investment. As Presiding Officer, I meet regularly with visiting parliamentarians and ambassadors from around the world. There is a common theme to a lot of those meetings: namely, the desire to do business with Scotland and a respect for the people of Scotland and their traditions.
While there is a clear role for Parliament and Government to lay the foundations that create opportunities for business, there is an onus on individual businesses and companies to take the brave decision sometimes to expand their operations beyond our borders. I hope that when you leave the Parliament today, you will have the confidence and the ideas to do just that.
The conference is very much an initiative between the Scottish Parliament and the Scottish Government. I am grateful to the members and the staff of the Economy, Energy and Tourism Committee, and to the Parliament’s events team and the Government’s team for their hard work in bringing this event to the chamber once again.
I also thank the ministers and their officials in the Scottish Government for their contribution to the event and to last night’s dinner. It is telling that there are five ministers and a committee convener taking part in today’s event, in addition to the First Minister. That sends a clear message about the importance that we as parliamentarians attach to businesses in Scotland, and particularly to this conference.
I urge you to grasp the opportunities that are presented to you today to engage with the highly important issues of the day and to bend a few lugs in the process. I wish you all a stimulating, productive and enjoyable day in the Scottish Parliament. Thank you very much. [Applause.]
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View from the Committee
The Presiding Officer (Tricia Marwick): I now ask the convener of the Economy, Energy and Tourism Committee, Murdo Fraser MSP, to present to us a view from the committee.
09:12
Murdo Fraser (Mid Scotland and Fife) (Con): Good morning, ladies and gentlemen. I very much welcome this opportunity to speak to you on behalf of the Economy, Energy and Tourism Committee, which I have the pleasure of convening.
This is the first business in the Parliament conference at which I have had the opportunity to speak as the relatively newly appointed convener of the committee. As well as being the new convener, I have inherited a new role, in that I now seem to be Donald Trump’s favourite Scotsman. That used to be a position held by the First Minister, but they seem to have had something of a falling out recently—something to do with a wind turbine, I think.
It is clear that the conference has become a vital part of the Parliament’s and the Government’s engagement with the business community. I welcome the partnership working that has been evident already today, and which was evident last night, with all the main business organisations and the Scottish Trades Union Congress.
The theme of today’s conference is entrepreneurialism. The thesis was posed by Sir Tom Hunter himself some months back in a newspaper article that there is perhaps less evidence of entrepreneurial behaviour and sensible risk taking among the current and future generations of business people than was the case in the past. Despite our proud history as a nation of inventors and successful business people—and we dine out on that a lot—is it really the case today that we have the same good news story to tell as we once had?
I do not want to steal Sir Tom Hunter’s thunder, and I do not know what he is going to say, despite my best efforts to find out last night over dinner, but we should pause for a second and think about those issues.
How would we know if that is the case, and how would we measure the situation? We could look at the indicators such as the business birth rate more generally, the enthusiasm of the younger generation to start a business, whether established firms are keen to take the first step in internationalising their business, and what the situation is regarding the spin-offs from our universities and the commercialisation of intellectual property.
I know that there are many excellent examples in Scotland of people and businesses doing just
those things. Our workshop speakers this morning—indeed, all the delegates who are here today—are living embodiments of the type of entrepreneurial behaviour that we need to see more of.
However, if you visit any classroom in Scotland—as I do regularly—and ask young people what they want to be later in life, they will tell you that setting up their own business is not as high up the list as we would like it to be. Often, young people want to be a celebrity or to work in the media and sometimes they might even want to be a politician, but few of them want to start their own business.
That is why bodies such as the Prince’s Scottish Youth Business Trust, which is represented today, Sir Tom Hunter’s initiatives and public sector programmes that are aimed at inspiring young people to start their own businesses are so important. Despite those initiatives, in 2010, Scotland had 36 new business registrations per 10,000 of adult population, in comparison with a United Kingdom figure of 46. Even if we exclude London and the south-east from the statistics, the UK figure is 39 per 10,000, so we are still lagging behind.
If we look at internationalisation, as the committee has done recently, we find many examples of successfully exporting companies and a good track record on attracting inward investment. Only last week, I visited a chocolate maker in Perthshire, which is a small business with only four employees but is already winning contracts in Japan and the middle east. That is a great example of what can be done. However, sadly, even today, still too few companies make that first step into exports.
We have to ask how we can change that, what the public sector can do to help and how the Scottish Government will meet its challenging new target for exports. For me, it is important that we ensure that the public sector does not duplicate the services that others provide and focuses much more on helping, financing and mentoring small and medium-sized enterprises to take the lead. I do not want to embarrass the delegate who is here from a certain beer firm, but the public sector needs to focus on the Heineken effect by aiming to reach the parts of the business sector that business organisations and private sector providers of advice cannot reach.
Finally, I turn to investment in research and development and efforts to capitalise on intellectual property. In recent years, there has been a significant gap between business R and D expenditure averages in Scotland and those in the United Kingdom and European Union. Scottish business enterprise R and D expenditure was £620 million in 2010, which represents 0.52 per cent of Scottish gross domestic product. The
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comparable figure for the UK is 1.09 per cent, and for the EU it is 1.16 per cent, which is more than double the figure for Scotland. The Economy, Energy and Tourism Committee has been examining many of those issues, and I commend our reports to delegates. When we set our work programme in September, I am sure that those issues will have high priority.
To help us shape our decisions and in the spirit of partnership, I encourage all delegates to use the conference to raise their concerns and to give us their ideas about how we tackle the issue of entrepreneurialism and how we can all work together to try to achieve more of it. The great benefit of events such as this one is that you, the people in business, can speak directly to the politicians and challenge us. We are paid to be here, whereas for you it is a day out of the office that you have to justify. That is why the event must be worth while for you. I look forward to hearing the contributions, discussions and questions and I hope that you have an enjoyable and valuable day.
The Presiding Officer: Thank you very much, Murdo.
View from the Business Community
The Presiding Officer (Tricia Marwick): We will now hear a view from the business community. It gives me great pleasure to welcome our main speaker, Sir Tom Hunter.
09:18
Sir Tom Hunter (West Coast Capital): Presiding Officer, First Minister, ministers, MSPs, distinguished guests, good morning and thank you for the opportunity to address this noble Parliament. Never in my wildest dreams, when growing up in a wee village called New Cumnock in Ayrshire did I ever imagine standing here in such company and being asked to speak. It is quite a thing.
Speaking of wildest dreams, that reminds me of something. I do not know whether people have been following the US presidential election, but there is a character called Mitt Romney, who was the governor of Massachusetts and who is the Republican nominee for the presidency. I think that Mitt Romney looks like a president. He is 6ft 2in, he has a not bad head of hair and he holds himself quite well. I don’t know whether he is any good as a politician, but he looks the part. A bit like Clinton, he looks presidential.
This is a fantastic chamber, but Mitt Romney was standing in an auditorium—in Texas, I think—with the ticker tape coming down and you could see that he was pretty chuffed with himself. His statuesque wife, a beautiful blonde lady who is 6ft nothing in her stockinged soles, was standing down below him, and he was taking it all in. He looked down at his wife and he said, “Gee, honey, in your wildest dreams, did you ever think I’d be standing here looking to be President of the United States of America?” She looked back up at him and said, “Gee, honey, you were never in my wildest dreams.” With my wife sitting here, my first lesson is this: don’t take yourself too seriously and listen to your wife.
Where does Scotland find itself in this interdependent financial world? I will give some context. Europe is at a crossroads. Who knows which way it will turn? Will Greece exit? If so, what will the consequences be? Will Spain need a bail-out? If so, what will happen to Italy? In Spain, unemployment is running at 25 per cent; for 16 to 24-year-olds, it is an astonishing 52 per cent. Even Brazil and China, which were seen as the growth countries in the global economy, have had weak economic data over the past couple of weeks. In Germany, two-year bond yields went negative for the first time in history, which means that, in effect, investors are paying Berlin to lend it money. To quote Mark Schofield, the global head of risk at Citibank,
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“This week has been a real game-changer. There is no good news anywhere”,
so is it time to get back under the duvet? Does it all look a bit too scary out there? As you would imagine, I don’t see it that way, but we need to change. All of us—business, education, trade unions and the third sector—need to raise our game.
“Scotland invented the modern world.”
Those are not my words; they are the words of Professor Arthur Herman of Georgetown University. He said:
“When we gaze out on a contemporary world shaped by technology, capitalism and modern democracy, and struggle to find our place as individuals in it, we are in effect viewing the world as the Scots did.
The Scottish Enlightenment is inseparable from its legacy. The age of Adam Smith, David Hume, James Watt, Robert Adam and Robert Burns, when Glasgow, Aberdeen and Edinburgh were the triple wellsprings of the modern mind, is not just an episode in Scottish history. It marks a crucial turning point in America, in the development of the British Empire, and of Europe—not to mention the United Kingdom.”
I love that book, and I put it to you that only someone outside Scotland could have written with such clarity and claim that we Scots did, indeed, invent the modern world.
My challenge to everyone in the chamber this morning is that we need to raise our game and invent the new enlightenment. All of us—business, education, Government, trade unions and the third sector—need to come together to plan and execute our strategy and claim our rightful place in this world. Tinkering round the edges ain’t gonna do it. We need to think differently and we need to reinvent.
Let me set out some of the things that we all need to be doing. I will start with business. We must get our business birth rate up. Small businesses account for more than half the job creation in most of the G20 nations but, as we have heard, Scotland’s recent history is not good enough.
In 1998, I invested in the Hunter centre for entrepreneurship at the University of Strathclyde. I subsequently put more capital into enterprise education, to try to help change the culture. In 2003, Scotland had 36 new business registrations per 10,000 adults. You heard from Murdo Fraser that it is still the same today. The irony is that it is the Hunter centre that could tell me that I failed—I see that Colin Mason is here today. We are collectively complicit in doing what we have always done or, at minimum, doing new things that have moved the dial not one iota—or maybe just a wee bit.
Marginal growth cannot and will not secure our position as a leading small nation in the world. We have to think bigger and better, and think
ambitiously for our futures and those of our future generations. I have failed and we have collectively failed to move the dial. However, that will not stop us trying because, as a nation, we are stubborn.
There are some green shoots. Yesterday, with John Swinney, I was very proud to open Entrepreneurial Spark’s west coast hatchery in Ayrshire. That came from an idea from one of our saltire fellows, Jim Duffy—helped by Brian McGuire—who had first-hand experience of world-class encouragement for new business creation at Babson College in America. In essence, Jim and Brian provide a free desk and computer, free wi-fi and printing, and, most important, free mentoring by other entrepreneurs. In those places we are taking people who have an idea but who may be sitting in their bedroom, or using free wi-fi in a coffee shop, alone, feeling lonely and thinking that they are the only ones in the world who have ever faced that challenge. Guess what? They come into the hatchery and sit opposite someone who says, “I cannae pay the wages next week.” Someone else says, “Don’t worry, I couldnae pay them last week. Come and get a cup of coffee and I’ll tell you what I did.” The entrepreneurs are lifting each other. It is powerful and important and we want to see those things happening all over Scotland. Willie Haughey has a hatchery in Glasgow and we have one in Ayrshire. Other entrepreneurs should come and join us. We need 10,000ft2 and we want it for nothing. It will be the best investment that you ever make.
The hatchery is also an example of collaboration. We got all three Ayrshire councils to agree to divert a small proportion of their business gateway budgets to make it work. It was quick and painless, and I thank the three Ayrshire councils for their support. We will not let you down.
Small business accounts for more than half the job creation in most G20 countries, but it attracts only 6 per cent of the available finance, according to Ernst & Young. Do you know which country does it best? It is China. Talk about the reinvention of a nation! We all know that our banks are having to repair their balance sheets. Lending to small and growing businesses is a risky business, and banks have almost stopped doing it. How do we innovate and reinvent? How do we finance small businesses?
I recently travelled to Fraserburgh to meet two young entrepreneurs who started a business called BrewDog, which started from very humble beginnings in 2007 and is now Scotland’s largest independent brewery. They are building a brand-new brewery in Ellon, just outside Aberdeen. When I visited them a couple of weeks ago, they had products waiting to be shipped to Brazil, Chile and Scandinavia, as well as Tesco, Morrisons, Asda and Sainsbury’s. Their company goal is to break the rules, take risks, upset trends and unsettle institutions—just ask Diageo.
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Their approach to finance inspired me. They took an idea called crowdfunding, which was used by President Obama in the most recent presidential campaign, and called it equity for punks. As a result, more than 6,500 people invested and they raised £2.85 million. People from 27 countries invested—this is in Fraserburgh—and the smallest investment was 95 quid and the biggest £25,000. Most important was that they built a relationship with their customers who became shareholders that was so strong that, in April this year, 2,000 people turned up at the BrewDog annual general meeting in the Aberdeen exhibition and conference centre—2,000 folk from all round the world travelled to Aberdeen.
The scheme is fully Financial Services Authority-compliant and cost only around £150,000 to put together. Yesterday, E-spark announced crowdfunding with Harper Macleod so that small businesses can raise small amounts of money. Those guys are not staying under their duvet. They are not thinking, “It’s too hard. Let’s not go out today.” They innovate, innovate and innovate again.
Those are two small examples of Scots grasping the nettle and saying, “Our glass is half-full, not half-empty.” Today, we see before us an era of unparalleled possibilities that, if grasped, will allow us to lead the world and deliver a new enlightenment for Scotland. However, we need to reach for the stars, not for the ladder. In a world where our cumulative knowledge doubles every five years, we need to use that knowledge to overtake our competitors and, yes, give the world something back—a national philanthropy, if you like.
However, we need ambition—global ambition. We need our Kennedy moment. Could Scotland, with our exceptional research base, find a cure for cancer? Could we lead in growing our economy by restoring, not depleting, our planet’s reserves? Why not? Whatever we choose as our goal, it will be achieved through our pursuit of knowledge. Benjamin Franklin summed it up in this way:
“The progress of human knowledge will be rapid and discoveries made of which at present we have no conception.”
We cannot do what we have always done; it must be discovery first, and worry about it second.
When asked recently who he saw as his biggest competitor, Sergey Brin of Google paused before saying that the competitor he feared the most had probably not even started yet and was probably starting their business in a bedsit in China or a garage in America. Why should it not be in a bedsit in Scotland? Why not at E-spark? Why not?
I do not know where these great innovations will come from but, if Scotland is to be at the forefront, we must align our education system to prepare our next generation for an uncertain world. In 20 or so
years, we have moved from fixed-line telephony to mobile commerce and from high streets to click streets. The bedrock for those changes has been education and innovation.
How does Scotland deliver the next enlightenment and become an engine of economic growth? First, whatever our advances are and wherever our opportunities rest, they must be married to our oldest values, where we care for and look after our most vulnerable, where communities come together and where opportunity is shared by all and not squandered on the few.
Secondly, we must reinstil that most valuable of Scots ethics: a can-do attitude. “I firmly believe I can,” is 10 times more powerful than IQ. Trust me—I know my own IQ and it is working for me so far.
Thirdly—and I am really tired of saying this—we must align our education system with our employment markets. If we need welders, let us train welders. Let vocational education flourish. Why not reward schools, universities and further education colleges not according to their success rate in examinations but on the positive destinations of their pupils? Why not incentivise the best teachers to teach in our hardest schools?
I applaud our teachers. They might well be the closest thing we have to a silver bullet. However, that bullet comes in different sizes and shapes. Let us teach to the opportunities that prevail, not to a dogma that I still believe causes some areas of academia to turn their noses up at vocational education.
Education, education, education is the key to our future and the future of our children and generations to come. Let us model it on our future needs, not on historical norms in which the tattie picking still dictates our summer holidays. We need to innovate, imagine and deliver world-class teachers for world-class pupils and ensure that postcodes do not dictate the type of education that a child might or might not receive.
Let me give you one wee innovation that we could introduce tomorrow. Another fantastic Scots entrepreneur is Mick Jackson, who runs a social business. He went to schools, colleges, universities and businesses with a competition called micro-tyco; people organised themselves into groups and, in September, he gave each group £1 and asked them, “What can you turn that £1 into?” I held a dinner at our home for the winners—it was brilliant. The winner was a group from Deloitte, who were fantastic. They turned £1 into £19,500. I do not know how they managed that, but you should get them to do your audits. Second—and most inspiring—was a primary school from Aberdeen, which turned £1 into £9,000, and fourth was another Aberdeen primary school.
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What happens with micro-tyco is that people get together. The folk who keep being told, “Sit down and do as you’re told,” and who are the disruptive element in the class—I am looking at the First Minister when I say that—come into their own and the quiet wee boys at the back of the class begin to say, “I know what I’m doing—I can do this.” As a result, behaviours begin to change. Why do we not put that in every primary school in Scotland this September? Where is the education minister? Let us do it. We need to start thinking out of the box. Instead of allowing political point scoring to cause innovation to be delayed or deferred, we should all embrace change and collaborate as one for this great nation.
Fourthly, we need to focus on our competitive strengths. Curiously, it sometimes takes an outsider to point that out. Last month in Hong Kong, I met a fantastic gentleman, Sir Gordon Wu, who is one of Asia’s leading industrialists. He noted two things: first, of all the engineers he employs, those from the University of Strathclyde are, in his opinion, the best in the world; and secondly he, like many in this Parliament, believes that Scotland can lead the world in renewable energy. Can we lead economic development that restores not destroys our planet? That truly would be a world-class achievement to be proud of.
When I arrived in Beijing at a brand-new terminal that cost half the budget of terminal 5 and took half the time to build, it took me two and a half minutes to clear immigration. I was greeted with a smile—“Welcome to China. We’re pleased to see you.” What welcome do our visitors get at Heathrow?
Last, but by no means least, what can our Government do? First, let me say that I will never tire of Kennedy’s great oratory, when he said,
“Ask not what your country can do for you, but what you can do for your country.”
Government can and will play a pivotal role in the development of our new enlightenment, so what are the steps?
First, we in Scotland need fiscal responsibility. Quite simply, we need to be responsible for what we raise in tax and what we spend in tax. I do not yet know whether we need independence. I am still waiting to hear both sides of the argument. Hopefully, we will not need to wait too long, but I know that we need to have that debate.
Secondly, I believe that the Government needs to drive economic renewal through infrastructure investment. We have never emerged from a recession in a way that has not been construction led. We need to drive stimulus into the economy, not squeeze it out of it. I believe that Government is a power for good and for positive change, but we need less red tape, not more. We need a framework that rewards innovation, invests in growth and highlights success. Moreover, I believe
that politicians of every hue have the maturity and decency to put party politics aside and do what is right for Scotland by coming together for our great nation. We need that to happen.
Thirdly, Government needs to deliver hope—hope for our people, hope for better times ahead. I recently sat with Scotland’s chief medical officer, Harry Burns, and asked him about some of the terrible health outcomes in some parts of Glasgow. What he told me shocked me. He told me that, when an individual feels hopeless about their life and feels that they have no control over what happens to them, they become stressed and that the chemical processes that are associated with that stress lead to greater risk of heart attack, cancer and stroke.
Harry Burns is not some fluffy do-gooder. He is a scientist. He has empirical evidence to back up his view. We need hope, and it is the Government’s responsibility to paint the picture that we can all get behind. Scotland should be a nation that has renewal at its core, innovation as its mantra and education as our bedrock—a nation where opportunity is favoured upon all, no matter what their postcode, colour or creed.
The beauty of Scotland is that we are small. We are nimble. We are a speedboat, if you like, compared to the supertankers of America, India and China. We can run rings around them, if we have the ambition, the drive and the determination to do so. Importantly, if we want to reach for those stars and deliver a new enlightenment, we know who all the players are and can quickly pull them together. Many are in this chamber today.
My final thought is this: if you want 1 per cent growth and are happy to be compared to our European counterparts, please think again. Ageing demographics, low business birth rate, unemployment growth will beat us down into a third world nation in no time at all. However, if we raise our game, reach for the stars and make ambition and innovation our mantras, we can and will make future Scots proud of what we have put in place.
When I first met my old friend and mentor, Vartan Gregorian, the president of the Carnegie Corporation of New York, he told me one thing and asked me another. First, he told me that my wealth was not in fact mine but was there to be reinvested for the common good. That was a bit of a shock after I had grafted for so long and, I thought, earned every penny, but—you know what?—I agree with him now. Secondly, he asked me, “Tom, what will be your legacy for future generations?” That is a question I ask you now. Scotland’s future is in all of our hands. We need to stand up and be counted and deliver for the future of this proud nation. If we do what we have always done, we will be defeated; if we innovate, experiment, aim high and aim long, I believe that
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we can reinvent the modern world. Together, we can do this. Scotland, let us get on with it. [Applause.]
The Presiding Officer: Thank you, Sir Tom—that was truly inspiring.
Scottish Government View
The Presiding Officer (Tricia Marwick): I do not envy anybody who has to follow that speech, but we have the First Minister of Scotland, Mr Alex Salmond.
09:46
The First Minister (Alex Salmond): If somebody has to follow Sir Tom’s speech, it should be that troublesome guy at the back of the class who got the chance to emerge to better things. I am grateful to the Parliament for hosting and organising today’s conference and to Murdo Fraser and Tricia Marwick for their opening remarks.
I will start with a word about Tom Hunter. Most of us will be familiar with the background of his inspirational example: he had a £5,000 loan from his dad and a £5,000 loan from his bank—the second was perhaps more difficult to get than the first—and he used them to establish Europe’s largest independent sports retailer. Tom, in his engaging and honest way, said that his investment in the analysis of entrepreneurship indicated failure, because the entrepreneurship centre that he established indicated that his efforts have not yet been successful. I want to say strongly that the act of becoming successful is in itself hugely important for Scotland.
Sir Tom referred to the Herman book on how Scots invented the modern world. That is absolutely true. Incidentally, the steam engine, telephone and television were all by and large invented as part of an industrial process. At school, I was sometimes told that Scots invented all those things, but nobody ever mentioned why Scotland had invented them. Was it because Scotland was naturally more inventive than any other country? We would like to think so, but is that the reason?
Because, like Tom, I was fascinated about these things, I had a good look at the issue later on in life, and I came to the conclusion that there were many reasons why Scots invented the modern world, but two above all. One was that we educated more people than any other country. Some countries not a million miles away seemed to have a policy of not educating people in case the masses got above themselves. In Scotland, for one reason or another, we decided that, whatever else happened to people, they should be educated. Of course, if you educate more of your people, you have more of a platform to produce scientists, innovators, great engineers and a range of success.
The second reason, and a subject that is not normally appreciated, was that, in the 19th century, Scotland had the most established and fluid capital market in the world. It was easier to
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get money for innovation in Scotland than it was anywhere else on earth. Some time ago, I wrote a pamphlet for the Royal Bank of Scotland about the Royal Bank in the city of Glasgow. There still exist in the Royal Bank records letters from the Glasgow representative office to the bank’s head office in Edinburgh. What struck me about that correspondence was that it was all retrospective. The Glasgow representative office used to say to head office what it had done and what it had lent, rather than asking permission to do it. Scotland had a well-performing capital market that meant that those educated and intelligent people had opportunity.
This is the point of hope that Tom Hunter asked for and which I want to highlight to him and others. When I spoke to audiences in the 1980s, I had a party piece; I would ask them to write down Scotland’s six best-known businesspeople. Invariably, the audiences around Scotland I was talking or lecturing to would come up with roughly the same six names, who were all men. I intend no disrespect to those people, but perhaps I can describe them as the sons or grandsons of those who established huge businesses in the late 19th or early 20th century. Their defining characteristic was that, whatever their great talents, they were probably less great than the people who had established the businesses they were running.
If I had stayed in economics instead of falling among thieves—by which I mean the House of Commons, not the Scottish Parliament—and had been giving the same lecture a few years later, I have no doubt that, had I asked the same question, the names on the sheet would have been Hunter, Souter, Murray, McColl, Farmer and Haughey. In other words, between the 1980s and 1990s, Scotland witnessed for the first time in several generations the emergence of a significant group of successful entrepreneurs whose defining characteristics included starting with next to nothing and being popular. Of course, they were probably popular because they had started with next to nothing and because they played a part in emulation, which is hugely important.
In a matter of a few generations from the 19th century, Scotland had almost totally lost the collective race memory of how the country had shaped and fashioned the modern world and had reached a point where its best-known businesspeople were the hereditary successors of those who had founded very large businesses, most of which, incidentally, were in decline and were about to be taken over. However, in a few years, a cadre of a different type of businessperson had been established. My point is that that was hugely important.
Tom Hunter mentioned BrewDog, crowdfinancing and the 2,000 people who attended a annual general meeting not to hang the board of directors or vote down emoluments but to
support the business and get their concessions on its products. The company is in my constituency and, two days ago, when I asked—as you do—a bunch of youngsters what they intended to do when they left school, someone said just about for the very first time, “I want to do what BrewDog’s doing.” That is the point of emulation and having role models. If you had asked kids in the 1960s who their role models were, they would have said Greig, McKinnon and Baxter, or Chalmers, McNeill and Murdoch; now they might say Tom Hunter, Brian Souter, David Murray, Tom Farmer or the others I mentioned. That is fundamentally important. Indeed, the next generation of people to be emulated are among us today and in the communities of Scotland.
The people here this morning range from Alison Grieve, who established her Safetray business only two years ago and is now exporting to Europe, North America and the Emirates, to Jim McColl, who famously started as an apprentice at Weir Pumps and is now chief executive of Clyde Blowers, which employs thousands of people across the planet. I am grateful, as is the Parliament, to all those who are contributing to today’s workshops, because they have a wealth of experience and insight and—crucially—provide something that we can emulate and learn from.
As Tom Hunter has said, this conference takes place in what the Chinese call interesting times. Of course, that is a curse, not a wish for someone to have good times. We are monitoring the huge potential impact of the euro zone crisis on the Scottish economy, the economy of these islands, the European economy, the world economy—indeed, all economies. Last week, the Scottish Government published some helpful suggestions. I hope that its plan for stabilising the euro zone will be adopted but, just in case it is not, we must look to ourselves and what we can do in any circumstances that befall us.
One helpful and hopeful sign—partly driven by necessity but nevertheless the correct conclusion—that has emerged in all policy makers over the past few months is the realisation that growth must have much more of an emphasis than it has had since 2008, when there was an understandable wish to consolidate balances that were hugely in the red. It is obvious from the past and the present, and it will always hold true, that we have to grow our way out of recession. That is now becoming accepted, even by those who come from different parts of the economic argument, and that must be a good thing.
Today’s conference is about business and the Government working together, but one of the first things that we have to do is make sure that the Government is working together. That is something that we have been trying to do, and I think that we have been successful. Within the powers that the Scottish Parliament and Scottish
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Government have, we have targeted growth and tried to maintain demand and confidence across the economy. That drive will continue.
I am grateful to John Swinney for yesterday’s demonstration that one of the essential precepts of taxation is the efficiency of collection. It might not be the most difficult job in the world to demonstrate that Her Majesty’s Revenue and Customs is not the most efficient tax collector on God’s earth. The demonstration that tax can be collected more cheaply, better and more efficiently is a great precept and we should take heart from that.
I will focus specifically on the two themes of today’s conference—internationalisation and entrepreneurship. Scotland has always been an open and international economy. To take just one example out of the many, when I visited the Tennent’s brewery two months ago, I was reminded that Tennent’s was the largest beer exporter in the world in the 19th century. Perhaps BrewDog has taken inspiration from that historical fact. Export capacity is still vital for prosperity, and I visited Tennent’s because it is revising its export programme.
As Murdo Fraser said, the Scottish Government has set a goal of increasing exports by 50 per cent by 2017. That is ambitious, but is it achievable? Well, when we are looking to find out whether things are achievable, we look at the immediate past. Two months ago, we announced that Scotland’s food and drink exports have increased by more than 50 per cent during the past four years. When you mention food and drink, people think that it is all about the whisky industry, but it is not. Food exports have been increasing almost as quickly as drink exports.
There are a number of reasons for that success and it is useful to look at them to inform how the target might be achieved across all sectors. Scottish food and drink are promoted tirelessly by Scottish Development International, and by Scottish ministers in key markets around the world. The sector has been united by Scotland Food and Drink to increase its presence and profile. It decided that, whatever competitive arguments each company might have, there was virtue in working together to sell their product and their image. Of course, and most important of all—because we cannot increase our exports without selling something of worth—we have fantastic quality products to sell. That means that when people get the opportunity to buy them, they buy them again.
Economics are different from sector to sector, but I believe that the success that we have seen in the food and drink sector can be repeated in other sectors. For example, our oil and gas supply chain now sells to more than 100 countries. We are increasingly adding our expertise to our world-
leading renewable energy sector. A couple of weeks ago, I launched an oil and gas energy strategy for the supply sector in Aberdeen. That set out a belief that the oil and gas supply chain could double its exports to £18 billion by 2020.
I understand that Malcolm Connolly from Cyberhawk Innovation will speak at one of this morning’s workshops. Cyberhawk is a good example of the range of opportunities in the oil and gas sector. It sells remotely operated aerial vehicles, or flying robots, which inspect oil and gas assets, and that is fundamentally cheaper than sending people up or down to do the same thing. They are also fantastic fun to operate. If you get the opportunity of a demonstration from Malcolm, say yes to it and your childhood dreams of having fantastic things under your control can be achieved. More important from Malcolm’s point of view, Cyberhawk offers the industry a cheap, effective, sophisticated, highly technical and successful way of committing to inspection.
World-class companies in a range of sectors are already selling Scottish goods around the world, many with support from Scottish Development International, which helped more than 1,300 Scottish companies last year. Today’s event provides a great opportunity to learn from our companies.
Our ambition to boost exports runs alongside our ambition to increase the number of businesses that are created in Scotland. We heard from Murdo Fraser and Tom Hunter the business start-up statistics, which have stubbornly refused to move over a substantial number of years.
I am familiar with the phrase “lies, damned lies and statistics”—after all, I am an economist—and such things are easily interchangeable. However, there is some recent science—perhaps it is a straw in the wind or one swallow in summer—that shows that new business registrations increased by almost 6 per cent in Scotland last year while they fell elsewhere in the UK. Perhaps there were technical reasons for that, but it is nonetheless another statistic to add to the mix.
It may be that Tom Hunter’s work in entrepreneurship—Entrepreneurial Spark, which is establishing a whole range of initiatives first in Glasgow, then in Ayrshire, and then across Scotland—is starting to have an effect. It may be that our social enterprises, which have had a highly successful time in hugely adverse circumstances over the past three years, are starting to make an impact as well.
I am extraordinarily positive about the changes that are taking place in the school curriculum. When we argue that schools must equip people for the future, we must first reckon what the schools have been doing over a long period of time and how that can be changed, and how we can rely on the professionalism of the teaching
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profession to help to produce the sort of young people that we want to emerge from the system.
Curriculum for excellence, which is already well established in primary schools, is making a fundamental difference to primary education. Whatever the issues around change—and change itself is a huge challenge for many people—curriculum for excellence will make a fundamental difference to the potential to increase the flexibility of what we are able to impart to youngsters going through secondary education, and the relevance that it has to their hopes and ambitions for the future.
Our universities are certainly performing as well as, if not better than, any other university system in Europe, and arguably rivalling the best on the planet.
The Scottish Science Advisory Committee is carrying out work and innovation to explore ways in which we can increase the economic benefits from the science and engineering base that still exists and flourishes in Scotland. We produce more notified papers—that is, papers that are notified for research—than any other country on the planet bar Switzerland. We would argue—as you would when you come second—that Switzerland has a certain inbuilt advantage in those matters because of its pharmaceutical links to the drug companies. However, as many businesses will tell you, there is a great advantage in being second in a league table, because you aspire soon to be first.
Interface, which is supported by public sector funding, has helped 1,200 companies. Its focus is on looking at research and making it more applicable to business techniques. If a business is looking for a better way to do something, Interface finds out what research has been done and is being done in our university system that might be applicable to taking the business forward.
There are developments such as ITREZ—the University of Strathclyde’s international technology and renewable energy zone—which will soon have 1,000 postgraduate engineers working on new energy machines that can determine energy production in a way that is compatible with the future of the planet. The marine engineering revolution of the 21st century is arriving in Glasgow, which dominated marine engineering in the 19th century.
Tom Hunter mentioned access to finance. We will be shortly be publishing an interesting survey on access to finance in Scotland. It is the only survey in these islands that actually asks those who are trying to borrow money how things are going, whereas the Bank of England surveys ask the lenders, which produces somewhat different results. The good news when that survey is published will be that things are not deteriorating from last year; the bad news is that last year was
not particularly good. However, we have to understand that, whatever encouragement we can give or pressure we can bring, the situation is as it is, so we have to innovate and find ways of mobilising the capital that is required to enable people to progress their business ambitions. That is why we tried to make things easier for small and new businesses.
The small business bonus scheme, which we in Scotland now take for granted, has been running for four years. It has benefited the smallest businesses in this country by £400 million. We devised the scheme because we realised that small businesses were the greatest engine of employment creation. In the way of the world, the small business bonus scheme became the way in which many small businesses survived the recession. However, the scheme is there, and we have the best platform—a platform on which our smallest businesses are free of the fixed-cost burden of business rates, in large measure. Some 80,000 small businesses benefit from the small business bonus scheme and I have every confidence that it will prove its worth as an employment creator as we, hopefully, move into better times.
That is why the Scottish Government established, with the support of major banks—Lloyds, RBS and the Clydesdale Bank—the Scottish Investment Bank. It sits alongside private sector partners and has supported 320 companies with early-stage equity investment, the majority of them in growth sectors, such as enabling technologies, life sciences and energy. Incidentally, more than a quarter of those companies are already exporting their products abroad.
However, more should and must be done. That is why I want to turn to the Prince’s Youth Business Trust. It is an organisation that will be known to many people here. It helps, in particular, disadvantaged young people who want to set up in business. Much of that help comes from the revolving loan fund that gives access to a loan of up to £5,000—a sum that was probably chosen because of Tom Hunter’s track record in business—to help young people with the cost of setting up their businesses. The success of that fund is clear from its record. It currently assists approximately 600 new businesses each year. Some of the businesses that have been supported are becoming some of the best-known businesses in Scotland. What is crucial about the fund is that the employment prospects of those who go through the fund, regardless of their business success, are dramatically improved.
I am, therefore, pleased to announce today that Scottish Enterprise, through the Scottish Investment Bank, which was set up for purposes such as this one, will allocate an additional £1 million of funding in 2012-13 to the Prince’s Trust
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Youth Business Scotland for that revolving loan fund. That investment will increase the number of loans that the fund is able to make. It will open it up to more young entrepreneurs. It will attract further private sector investment. It will boost the fund’s long-term sustainability. It will build on our work to tackle youth unemployment. It will provide access to finance to those who need it most: young people with dynamism and good ideas who would struggle to get loans from the private sector. Crucially, in terms of Government working with business, it does not try to reinvent the wheel; it takes an organisation that, manifestly, is doing good and productive work and boosts and helps its efforts instead of setting up a rival organisation so that Government can claim that any success was a result of the work of a Government initiative. It is a good example for each and all of those reasons.
Tom Hunter finished his speech on the case for optimism and positivity, so I will finish this one on that same basis.
I think that Scotland’s potential is enormous. We have the key ingredients to ensure success for ourselves and internationally. Whether we can reinvent the modern world, I do not know. However, we can certainly take a fair shot at it. That is certainly the case in key technologies. I do not know whether we can find the cure for cancer, but our life sciences are finding the cure for a range of the most serious diseases that afflict humankind. Can we change the energy configuration of the planet and be the lead country in that regard? I think that we possibly can.
A delegation from Germany has been visiting the Parliament over the past few days. As you would expect, we heard that people in Lower Saxony and elsewhere in Germany think that Scotland is a wonderful place. Members of the delegation told me yesterday that their vision of Scotland had been transformed by their two-day visit. I asked, “What transformed your image of Scotland? Were you disappointed that not everyone was wearing kilts or that there were not enough pipe bands?” They said, “No, we knew about all that; we love all that—that is fantastic. However, our image of Scotland is being transformed because we now understand more about your energy, your research and your scientific base.” As we spread that knowledge in alliance and co-operation and realise what the members of that delegation now realise—that Scotland is at the cutting edge of some of the most serious and key improvements and breakthroughs in the world—we will create a substantial base.
We have immense natural resources. We have that world-class research base and a worldwide innovation for innovation and creativity, which we have to enhance. Chinese Vice-Premier Li Keqiang ensured that his audience warmed to him
when he spoke in Edinburgh castle last year by saying, in his first words,
“It’s great to be in Scotland, land of invention.”
For the person who is about to become the Premier of the most populous country on earth and the coming world superpower to describe Scotland as the land of invention is an extremely substantial thing for us to build on.
However, as this conference will indicate, our most important asset is our people. Encouraging their ambition, enterprise and talent is the key to success. Nobody knows better how to do that—how to boost start-ups and exports—than those of you who are already in business and are already doing those things. That is why the conference today is important. It ensures that the perspective of business is shared with policy makers and, indeed, the third sector and gives us a shared understanding of the challenges and opportunities for Scotland’s economy. It epitomises the best in the collaborative approach of the Parliament and the Government, which we see as being essential to building that prosperity.
Everyone here from the Scottish Government and the Scottish Parliament looks forward to a productive day of discussions. We look forward to working with you to support new businesses, to create jobs and to boost sustainable economic growth.
The Presiding Officer: Many thanks for your thought-provoking speech, First Minister.
I ask delegates to make their way to the workshop sessions.
10:12
Meeting suspended.
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12:22
On resuming—
Question and Answer Session
The Presiding Officer (Tricia Marwick): Welcome back. I hope that you found the workshop sessions enjoyable and informative.
We now come to an open question-and-answer session, which is primarily on entrepreneurship and internationalism, although you should feel free to raise any other business-related issue with the panel.
Our panel members are Fergus Ewing MSP, who is the Minister for Energy, Enterprise and Tourism; Murdo Fraser MSP, who you heard from earlier and who is the convener of the Economy, Energy and Tourism Committee; and Murdo’s fellow committee members, John Park MSP and Patrick Harvie MSP.
I encourage everybody to keep their questions as brief as possible; I will try my best to ensure that the panel’s answers are as brief as possible to allow everybody the opportunity to ask what they want to ask.
If you want to ask a question, raise your hand. When I invite you to speak, please wait for the microphone that is nearest to you to turn red. If you can, it would also be helpful if you stood when speaking. When you are called to speak, please introduce yourself and say which organisation, if any, you represent.
I would like to see a lot of hands in the air. Who wants to start us off by asking the first question?
Brian Keating (URTV): I am involved in Machrihanish dunes golf resort, and I am also involved in a new initiative for community television around Scotland. My question relates to both. Over the years, a lot of money has been spent, extremely successfully, on promoting Scotland around the world through VisitScotland. When it comes to how we promote Scotland, what does the panel think about changing VisitScotland to movetoScotland, particularly in light of the London Olympics, the release of “Brave” and all the other things that are happening around the world? Are we going to start an experiment to bring in more entrepreneurs? That would be particularly relevant in depopulated areas such as Kintyre. As well as turning our own people into entrepreneurs, how do we bring in more entrepreneurs and get out the message that Scotland welcomes entrepreneurs and wants them to move here?
The Minister for Energy, Enterprise and Tourism (Fergus Ewing): I think that VisitScotland is doing a good job in promoting Scotland in a positive way. The winning years
include the year of creative Scotland this year, the year of natural Scotland next year and the year of the homecoming in 2014. For every taxpayer’s pound that is invested, VisitScotland expects to achieve a return of £15. During the year of natural Scotland next year, people in Scotland will be able to discover their own country. An awful lot of us do not know the attractions that there are on our own doorstep, so I hope that everyone follows the lead of Brian Keating and visits Machrihanish dunes.
As Brian Keating indicated, VisitScotland has done a deal with Disney Pixar on the film “Brave”, which will be premiered shortly. It is an animated story set in Scotland that is in the style of “Toy Story” or “Ratatouille”, and will feature Scottish actors such as Robbie Coltrane and Billy Connolly doing voice-overs. The film will be released in 36 different languages, so Disney Pixar will have to find Billy Connolly sound-alikes in 36 different languages, which will be a challenge. The film is all about Scotland, and the marketing budget for it is north of $100 million. More than a billion people will see the film this year, next year and every year for decades to come. I have a four-year-old daughter, so I know that you do not get to see “Toy Story” just once.
What a tremendous opportunity “Brave” represents. As I said, VisitScotland has done a deal with Disney Pixar, which involves putting in £7 million, on which we will get a 15:1 return. It is the first deal that Disney Pixar has done with a Government department in any country in the world. We have grabbed that opportunity and will make the most of it, using it to get people to take up Brian Keating’s suggestion and move to Scotland. I suspect that many of those people will be entrepreneurs.
The Presiding Officer: Would any other members of the panel like to comment? Please do not feel obliged to answer every question, because I want us to get in as many questions as we can.
Murdo Fraser (Mid Scotland and Fife) (Con): I am looking forward to seeing “Brave”. I have a four-year-old son, and I think that the film has great potential. Having said that, one of my kids’ favourite films is “Madagascar”, and I am not sure to what extent tourism to Madagascar went up after that film was released. However, I am assured by VisitScotland that it is putting a lot of effort into benefiting from “Brave”. There are great hopes there.
Recent statistics show that Scotland’s population today is the highest that it has been at any point in our history. Ten years ago, there was a lot of national angst about a declining population and people leaving. That is turning around. People are growing families and coming to live here. The population is increasing, but we need to do more.
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We need to attract entrepreneurs and we need inward investment.
Last weekend, I read a story in the press about how the Irish equivalent of Scottish Enterprise had managed to poach some jobs that were coming to Scotland. It had a scheme whereby it rewarded people for directing jobs into Ireland by giving them a cut of the investment. A chap in Ireland was paid more than £30,000 by the Government because he persuaded a business that had been going to locate in Scotland to locate in Ireland instead. We might need to look at such innovative approaches and see whether there are ways of incentivising people to bring more businesses to Scotland.
12:30
John Park (Mid Scotland and Fife) (Lab): On Brian Keating’s point, one of our big challenges, notwithstanding what Murdo Fraser said, is that there will be more people who are not of working age in the future. As a country, we need to think carefully about how we will provide to meet a clear and acute demographic challenge. Attracting people and high-quality employment into Scotland should be an ambition for all political parties and everyone in the chamber today. There is no doubt that we are an outward-looking country. If we can make Scotland an attractive place in which to live and work in the 21st century and bring people here, that will give us a much better chance of ensuring that people who are already in Scotland and want to grow businesses and make their careers here will be more likely to stay. I am very supportive of that approach.
My children are a little bit older now, so I do not know whether “Brave” will be on the agenda—I might be being brave if I suggested to them that we should go and see it. However, there is a real opportunity for us in ensuring that the jobs that come to Scotland—and the people who come here—are high quality and give us all something to be proud of.
Patrick Harvie (Glasgow) (Green): I will be brief.
A lot of sense has been spoken already, and I am sure that the Disney movie will be great fun and everybody will have a nice time watching it. However, we do not need to play up to a stereotype. There are aspects of real life in Scotland—things to do with our quality of life—that should sell themselves if we let them do so.
I do not agree with everything that the First Minister says, but he has spoken about the transformation in the way that someone perceived Scotland after learning something new that perhaps was not part of their preconception or stereotype of Scotland. The cartoon will be great and I am sure that it will be a lot of fun, but there is
a need not to play up to stereotypes and to talk about the reality of modern Scotland.
The Presiding Officer: I ask Stephen Leckie to stand up for the sake of the microphone.
Stephen Leckie (Scottish Tourism Alliance): I am delighted to stand up and show off my tweed suit. I am proud to be a Scotsman wearing my Ettrick tweed suit from Dumfries and Galloway—it is not one from up north, by the way. I am also proud to hold what is, I think, the only iPhone cover with “Brave” on it, which was removed from the iPhone of Disney’s head of public relations, with her reluctant permission. I hope that it is the start of the paraphernalia that will go out to sell Scotland to 200 million folk around the world.
This is about entrepreneurship and internationalisation, which is great. I say well done to VisitScotland—Malcolm Roughhead is sitting right behind me. This year, there is a new entrepreneurship category linked to tourism in VisitScotland’s successful awards. That is great and exciting. Where does the panel see tourism fitting with international trade? How important is tourism to Scotland’s economy as a key driver?
Murdo Fraser: You are absolutely right to say that the tourism industry is a hugely important industry to Scotland. It is one of the great strengths of the economy. As you will know, it is probably the number 1 employer in areas such as Perthshire, so it makes a huge economic contribution.
The Scottish Government set a very ambitious growth target some years ago. There are issues to do with whether we will meet that target, but at least we have a strategy. I know that you are working on a new strategy to take tourism forward, which the minister will announce very shortly, I think.
An interesting thing about the tourism industry is that, with the exception of large operators such as yourselves at Crieff Hydro, it is made up of small and medium-sized enterprises. Small—sometimes very small—microbusinesses very often pull together. The industry voice of the Scottish Tourism Alliance is extremely important in trying to pull us all together and ensuring that the grass roots work hard to deliver a quality product.
VisitScotland is great at getting people here. That is its job—it markets internationally—but people need to have a good-quality experience when they get here that will make them want to come back. That is all about continually improving standards, innovating and being entrepreneurial. Having awards for enterprise in tourism will be essential. We need very high standards, and we need to ensure that we are always trying to drive people up to achieve them.
Fergus Ewing: This year, for the first time in the history of the planet, 1 billion—1,000 million—
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people will be taking a holiday. The British Hospitality Association estimates that, within 15 years, there will be twice as many potential visitors. Not only is tourism hugely important to Scotland, as Stephen Leckie and Brian Keating have rightly pointed out, but it is going to grow massively. As soon as we move into economic recovery—which, I hope, will be in a couple of years’ time—the opportunities for Scotland will be immense, and I agree with Murdo Fraser that we must sell quality. That is our product. VisitScotland has been leading the way; in fact, many might not know that its quality assurance scheme is so highly regarded that it has been bought by other countries.
Our job—and my job, in particular—is to do practical things to make tourism grow. With regard to business tourism, for example, 3,000 or 4,000 conference delegates at a time come to Glasgow and Edinburgh from all over the world. Why can we not get them to travel on to Fife, Gleneagles or Turnberry for some golf or to go on a walking holiday? If some of the conferences that I have attended are anything to go by, delegates who come all the way to Scotland can certainly do with some fresh air after them, if you know what I mean. A few months ago, we set up a bid fund, from which we have spent £87,000, to secure several million pounds of extra spend from conferences.
Stephen Leckie was too modest to point out that he is the owner-manager of one of Scotland’s leading hotels, Crieff Hydro Hotel. Obviously, one of my duties is to advertise the industry, and we are working with him to promote high quality in Scotland. We all have a duty to raise our standards and ensure that Scottish tourism continues to grow—and growing it is, at a time when tourism in other countries is falling back. However, we cannot rest on our laurels. I am very interested to hear from the body of the kirk what more we can do to be even more successful.
The Presiding Officer: Does Patrick Harvie want to jump in with something new?
Patrick Harvie: There is a flipside to the minister’s positive comments about the growth of global tourism and the fact that this year, for the first time, 1 billion people will be taking a holiday and that, in 10 years or so, the market will double. If you are interested only in increasing the next season’s figures, what the minister says is probably right. However, it is the opposite of what Tom Hunter was telling us this morning about the need for an economy based on renewing the earth’s resources instead of one that continues to deplete them.
If we really want a tourism industry that will be viable in the long term and sustain jobs in a world after peak oil, I believe that we are failing to properly emphasise domestic tourism and surface-
based travel. We are very good at promoting the idea of global tourism but are not thinking about how that might transition to a low-carbon world. I see representatives of the oil industry smiling at that, but these are facts and they are as much to do with geology as they are to do with climate change. We simply have to adjust to that new way of living.
The Presiding Officer: Before we have the next question, I want to make two points. First, it will be helpful if, when a delegate asks a question, panel members indicate whether they want to answer it. Secondly, it will also be helpful if those who want to ask a question can put up their hands while the person before them is speaking. That will allow me to look around for the next questioner.
Billy Kirkwood (RDK/Robert Ryan): I own and operate a small house-building, construction and manufacturing company in Saltcoats in North Ayrshire. I have to say that I am interested in the fact that Mr Ewing’s ministerial title covers both energy and tourism, given the conflict that is happening between tourism and offshore wind energy projects off the north-east coast of Scotland.
The authority in North Ayrshire is trying to grow and develop tourism on the west coast as a way of driving social and economic growth, and the construction industry that I represent can go a long way towards helping that situation.
Obviously, the minister cannot comment on the forthcoming public planning inquiry into the proposed carbon-polluting coal-fired power station at Hunterston—a proposal that is of grave concern to me considering that I live only a stone’s throw away from the site. However, I would appreciate it if he could tell me what the plan B is to enable continued social and economic growth for our businesses and our country. If the plan for a coal-fired power station is thrown out, as I hope it will be, how will we secure the base-load electricity supply that we need to meet our country’s power requirements, given the tenure of Hunterston nuclear power station?
The Presiding Officer: I call John Park.
John Park: I was going to let the minister answer that specific point as it is within his remit, but I will comment briefly first.
The Economy, Energy and Tourism Committee is looking at the Government’s targets for renewables, and in that context it is important to recognise the apparent contradiction between tourism, given the potential impact on it, and offshore and onshore wind. Like me, many people quite like the idea of wind turbines and seeing renewable energy production, and it seems that there is not a direct negative impact on tourism. That is the evidence that we are getting just now, which is interesting.
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The key issue, and the factor that we really need to deal with in our inquiry, is that there are real sensitivities between what local communities want to happen and the objectives that almost all of us in the Scottish Parliament have signed up to with the renewables targets. We need to find a better way of reconciling community concerns with what I believe are laudable targets that will provide not just energy but high-quality employment for Scotland in the future.
Fergus Ewing: My views have a lot in common with the sentiments that John Park has just expressed, which are perfectly reasonable.
Let me answer the main question that Mr Kirkwood asked. Our plan B is part of our plan A. We recognise that there will continue to be a need for conventional thermal generation of electricity in Scotland. We have aspirational targets for producing the amount of electricity that we consume, but we will generate more than that and export it. We will continue to need to generate electricity from conventional sources. Our plan—the “Electricity Generation Policy Statement”—has been published and is available. It contains independent modelling that confirms that our target is ambitious but achievable. We envisage that we will require coal or gas generation to about 2.5GW for the foreseeable future.
We have also indicated that, provided that the safety case is made, we would not oppose the life extension of our two nuclear power stations in Scotland. It is useful to make that clear, because it is not something that we regularly read about in The Daily Telegraph, for example.
We also have extremely ambitious plans for renewable energy, which is attracting investment from four of the five biggest companies in that field in the world. At present there are 11,000 jobs in renewables. Just a couple of weeks ago, for the first time ever, ScottishPower Renewables generated electricity from a tidal device. We are leading the world. As Tom Hunter said, we are helping to invent a modern means of providing renewable energy from the excellent resources off our coasts, especially the marine resources of wave and tidal, and offshore wind.
That is creating jobs in Scotland, and those jobs are actually contributing to tourism. There is a visitor centre at Whitelees, and there have been 1 million visitors to the wind turbine centre there, which is the biggest in Europe. That includes schoolchildren, who learn about renewable energy.
I mentioned the business tourism conferences that we have won, and one of them will see 3,000 delegates come to Glasgow for a renewables conference.
In addition, over the next 50 years, we will see investment in our grid that is worth £7,000 million.
All that work is being done in rural Scotland, highland Scotland and the islands. The guys and the women who are involved in the work to build the turbines and construct the grid need somewhere to stay, and I have met the owners of many rural hotels that are full up in the shoulder season because of the construction work that is going on, and which will go on virtually in perpetuity because of that investment of £7,000 million.
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We work closely with our colleagues in the Westminster Government, who share our objective of a balanced energy policy with a mix of different forms of energy: conventional coal, gas, nuclear and renewables.
As I said, our plan B is our plan A. We think that it will deliver and is delivering massive economic opportunities for Scotland, especially in the construction sector, into which more firms are moving to take advantage of the opportunities that are now available because we set ambitious targets. As the First Minister said, those targets have helped to reshape Scotland’s image throughout the world as a country that is leading the way in the green energy revolution while staying at the forefront of the oil and gas sector, which has a future for 50 or 100 years to come.
Murdo Fraser: The Economy, Energy and Tourism Committee is looking at all those issues. I am pleased that the minister confirmed, as he has done before, that we should have a balanced energy policy. Even if we meet our target of meeting 100 per cent of Scotland’s demand by renewables by 2020, most of that will come from wind. Of course, that needs to be backed up and we need to have a plan B, because we must have conventional generation for when the wind does not blow.
I will probably disagree with some others on the panel, because I think that nuclear power should have a future in Scotland. It is important in providing base-load. We have a strong tradition in Scotland of having an engineering base that supports nuclear. The very least that we should do is extend the life of our existing plants. We should remember that nuclear is a low-carbon source of electricity, so that is therefore entirely in line with our environmental objectives.
The Presiding Officer: Does Patrick Harvie want to speak?
Patrick Harvie: After that last line, how could I not? If we were talking only about replacing existing industrial-scale electrical generation with wind, the issue about back-up in the short-to-medium term would be clear. However, we should be thinking about building the foundations of an energy system into the 2020s, the 2030s and beyond, with much more redundant generation
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capacity and much more connectivity—not only connectivity with down south so that we can trade electricity between Scotland and the rest of the Great Britain electricity market, but direct connectivity across to northern Europe, so that we can trade electricity highly efficiently when different intermittent sources are balanced against one another. Smart grids and storage are other methods of balancing intermittent generation with intermittent demand. We cannot build that today, but we must lay the foundations of an energy system for decades to come.
As we lay those foundations, we are missing an opportunity, because a greater proportion of the renewable electricity generation that we are putting in place could be in local ownership. The large multinationals and the big energy companies have an important role to play, but if a larger proportion of the industry was owned by local businesses or in the community or public sectors, that would help to ensure that profits were more equitably shared. That would change public attitudes more than anything and would certainly do more good than Mr Trump can do harm in the debate on Scotland’s renewables opportunities.
The Presiding Officer: I have no wish to direct delegates on what questions they should ask, but in the next 25 minutes I encourage questions on entrepreneurship and internationalism. The next question is from the young gentleman with the stripy tie.
Blair Bowman (World Whisky Day): This year I successfully launched the first ever world whisky day, which was a day of global celebration of whisky, which is a very Scottish product.
I am a full-time student in Aberdeen, studying Spanish and Chinese. How will you inspire the next generation of entrepreneurs? A lot of my peers have no interest in setting up a business and they have no idea that they can do that. Many of them want to go to university, get good grades, graduate and get a good job, but if they cannot get a job when they graduate, why do they not create their own job?
There is not enough awareness that anybody can set up a company. I realised that I could do it and I did it, but a lot of my peers do not think that they can do it. How will you inspire the next Sir Tom Hunters and Alan Sugars?
Murdo Fraser: You did not invite me to your whisky day—I would have come along, it sounds great. Perhaps you will invite me next year.
You made a really good point—youth unemployment, particularly graduate unemployment, is a big issue. People come out of university having spent a long time studying and they struggle to get jobs. There is a huge resource there in terms of trying to help people to set up their own businesses. The opportunities are there.
Three essential things are needed. First, as Sir Tom Hunter mentioned earlier, we need to look at the education system. How do we ensure that people are not just being educated to go and get a university degree and then look for a job? People need to be aware of the prospect of starting their own business and what that involves.
Secondly, we need the right help and advice for young people. The PSYBT is represented here today—it does a great job providing support, advice and soft loans for young start-ups. We need to do more of that.
Thirdly—again, this was mentioned earlier—we need role models. People need to see successful entrepreneurs—people in business who started from nothing or from very little and who built a global brand. Whoever they might be—Tom Hunter, Richard Branson or Alan Sugar—when people see those success stories, that is what they aspire to.
John Park: Blair Bowman made an excellent point about how to inspire the next generation of entrepreneurs. People in Scotland have an issue when it comes to confidence. We are good at putting people on pedestals, but we are equally good at knocking them off when they get a bit too big for their boots. We need to ensure that people feel that they can do things and that confidence is not mistaken for arrogance. We need to create a culture that recognises people who are confident enough to take what are sometimes difficult decisions about their own careers, particularly if they are starting out.
There needs to be a more honest discussion about leadership in that context, because leadership should not be just about the qualifications that people get—an MBA or whatever. Leadership needs to be more about looking at leaders—not just in business but in our communities and in the trade union movement. We have many leaders in Scotland and a culture of leadership that we can be proud of. We need to look at that and try to capture that much more effectively. That is not something that we can do overnight.
We need to be honest about people’s possible career opportunities—about the paths that people can choose to go down. There seems to have been a headlong rush towards sending everyone into higher education over the past 10 to 15 years. Perhaps that is not the route that a lot of people necessarily need to go down. We need to look at where the opportunities are for young people. We need to look at their abilities, what they want to do and what they are interested in. We need to try to find a system—particularly of advice and guidance—that supports them so that they can make decisions about what they want to do in their careers much earlier in their adult lives.
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We need a mentoring programme for entrepreneurs and we need a programme that recognises that for some a vocational route might be a better opportunity than going into higher education—that is where we need to be. The next few years will be difficult for a lot of younger people. However, I have no doubt that there will still be opportunities and we need to be much more confident in supporting people to make those choices.
Fergus Ewing: To answer Blair Bowman, we need to inspire young people to go into business and perhaps to create their own businesses. Incidentally, the international whisky day is a terrific idea. When I heard about it, I wished that I had thought of it—I am sure that a lot of other people did, too. You are an example to others.
The key to inspiring young people to go into business is to improve the alignment between business and schools. We need to make it easier for business people such as the delegates here today to go into schools and explain to young people what they do and what their job means. After all, how can 10 to 15-year-olds know what it is like to be an actuary or an engineer unless there is one in the family? We need to be better at getting the message into schools. That was the main focus of the workshop that I was involved in earlier this morning. That is the fundamental thing.
I do not want to decry the efforts of those of you who already do that, but I hear that it is much easier to do it in the USA than it is in Scotland. There is a contradiction, because we have massive skills shortages for all sorts of important jobs, especially in engineering—although that is not unique to Scotland—but, at the same time, as Tom Hunter pointed out, Gordon Wu in Hong Kong says that University of Strathclyde graduates and engineers are the best in the world. We have high-quality people in our universities and colleges to do the training, but not enough children are being inspired at an early age to make the relevant choices, or at least not to drop those topics. That means that certain opportunities and doors are closed by the time that many children are 12 or 13, which is a big shame.
One thing to work on, which I took from the workshop, is to do better at getting a message across in schools. However, we can succeed at that only with your help. It will be you—I include the questioner—who will generate success, with a system that we help to create to make it easy for you, as an inspiration to young people throughout Scotland.
The Presiding Officer: The next question is from the gentleman two from the back with the light blue shirt on and the nice tie.
Martin Hunter (MH Training and Recruitment): Thank you.
Is there nothing more we can do to kick-start funding for entrepreneurs? Tom Hunter, whom we heard from this morning, got £5,000 from his dad. We perhaps need to kick-start things in that way. A suggestion that was made in the workshop that I was at was that our Parliament should start a programme called “The Entrepreneur”, with Tom Hunter, in competition with Alan Sugar and “The Apprentice”.
Patrick Harvie: Funding is important, as are mentoring and peer support, which have also been mentioned. I want to raise the issue of microfinance models such as the Grameen model, which Glasgow Caledonian University is trying to develop for Scotland. That is relevant in developing countries, but it has been shown to be relevant in developed countries, too. Sometimes, the young people who are furthest from the job market or who do not respond well to academic education have qualities that can be brought out in other ways, which can be creative or entrepreneurial. I am keen for us to support that approach.
There is an issue about the balance between bigness and smallness. Sir Tom Hunter mentioned that small and medium-sized enterprises are a big proportion of our economy and he said how important that is. However, as is easy for us all to do, he segued that into talking about what happens if we get the next competitor to Google. Successful small businesses are not a failure simply because they do not grow into world beaters. Young people who have an entrepreneurial attitude to life but who do not become the next Hunter or Sugar are not failures because they have not become world beaters or big beasts in the jungle. We need to think about the small and the medium as innately important, rather than only ever as a route to becoming the next big beast.
We need a balance in the support that we give to large and small businesses. Often, it is easier for a big business to get millions of pounds from the private sector or from Government than it is for a small business to get a few thousand pounds.
Fergus Ewing: The key thing is to encourage young people to want to go into business. We then have the duty to assist them with appropriate funding. I agree that we always need to do more and be ready to accept that what we do is never good enough, but I will talk about two things that we do at the moment. First, the business gateway service assisted more than 11,000 people in business last year, which is quite a good effort. The service is run by the local authorities, which do a pretty good job. We are working on making that service better, along with the Federation of Small Businesses, which is represented here, and other organisations. The business gateway provides a lot of help to young people and others
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to get started in business. Giving advice is a key part of that.
13:00
Secondly, the First Minister announced today additional funding for the Prince’s Scottish Youth Business Trust. Many of you will know Mark Strudwick of the PSYBT. Meeting him was one of the most inspirational experiences that I have had—and I meet a great many people in my job—because he explained to me what the trust does in Scotland. With up to £5,000 of grants it helps 600 businesses a year, which is almost as many as the number of young people in England who are assisted by the equivalent of the trust there. In other words, the trust is so successful that almost as many young people in Scotland as in the whole of England are assisted each year by the PSYBT. How does it achieve that success? The PSYBT operates with a system of volunteers and every young person who is helped is interviewed by a panel of mentors—some of you may sit on those panels—composed of people in business who give freely of their experience to young people. As the First Minister said, just the experience of going through that process helps to educate and inform young people about business.
There are terrific success stories in Government and in Scotland, but the PSYBT is entirely independent of Government. We give it money because it does what it does better than anyone else could, and I suspect that it does it better because of what you do in contributing freely of your time to help young people to get started in business. I hope that the extra £1 million that was announced today will help the trust to achieve great things along the lines of what the questioner is seeking.
John Park: As I mentioned in the workshop that I took part in, we could use the capacity that we have in our large organisations to support the supply chain in lots of ways. I mentioned that in the context of skills—it is not necessarily about money and it is not just about people giving up their time, as the minister says. We have some big global players that could mentor and support people in that way. That is important.
The other issue is that we should not think just about the private sector; we should think about different business models and social entrepreneurs. We, in the Scottish Parliament, could drive that directly.
The Presiding Officer: I call the gentleman at the back with the glasses, the blue shirt and the equally nice tie.
Ewan Hunter (Hunter Search): My name is Ewan Hunter. I am the director of a recruitment business called Hunter Search Recruitment and the chairman of another business called Recruitwork. I want to make a proactive
suggestion that ties in with what Sir Tom Hunter said about the Government’s role being to have the vision and paint the big picture, including what other people and businesses can do.
Perhaps there is a role for Government to direct some of the existing funds into a small but fairly nimble unit headed by an entrepreneurship tsar, or whatever you wanted to call them. That small unit would not be teachers and would not be part of the normal formal education system as it stands, but it would go into every school in Scotland independently and provide inspiration. The unit would co-ordinate local entrepreneurs, taking that responsibility away from headteachers, some of whom do it brilliantly while others do not do it quite so well. It would work in partnership with those entrepreneurs to ensure that there was consistency in getting that inspiration, message and opportunity out to every child in Scotland. Perhaps there could be a short session in each school to say what it was about and—following the lead of our young friend, Blair Bowman—what it takes to set up a company. Nobody told me that at school, but it is not difficult to do. Perhaps there is space in the system for that.
The Presiding Officer: Minister, I lob that one to you.
Fergus Ewing: Is that the minister with the nice tie, Presiding Officer?
That is a good idea. We are looking for a mechanism—a lever—through which to achieve what we all recognise is necessary: we must improve the way in which we communicate with and inspire young people about setting up business and participating successfully in business. I do not think that we have cracked that yet. We need a mechanism through which to do that, and the suggestion that has been made is one that we should take away and think about, along with others. Working with our colleagues across all parties, we should, in fairly short order, come up with a scheme whereby Government and the public sector will make it easy for you to do what you want to do and what you are good at doing, which is inspiring young people to set up their own businesses or to pursue rewarding careers in business.
The Presiding Officer: The young man with no tie.
Craig Johnstone (Giglets Ltd): I am the managing director of a company called Giglets Ltd, based in East Ayrshire.
I want to pick up on Mr Ewing’s comment about entrepreneurship and a mechanism for that in schools. My company is quite unique in that it started as a school project, in sixth year at school, in 2007. We were involved in Young Enterprise Scotland, which was a fantastic mechanism to make the business happen. I have a 14-year-old
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sister, who is at the Grange academy in Kilmarnock. Young Enterprise Scotland is not actively happening there. How can we ensure that something like YES happens throughout Scotland? It is important to note that although my involvement in YES gave me an opportunity to build a sustainable and scalable business, it also give me continuity. It passed me on to business gateway, which passed me on to PSYBT. I got to university and got to engage with the Scottish Institute for Enterprise, whose chief executive Fiona Godsman is here today.
Getting YES or something like it into schools is hugely important. YES gave me inspiration. The way forward would be to ensure that every kid has that as an equal opportunity.
Murdo Fraser: Craig Johnstone has outlined a tremendous success story. Many members of Parliament here today will be familiar with Young Enterprise Scotland and will see the work that is done in schools. Craig is right, though—it is not universal. Some youngsters are fortunate to go to schools where they have access to those schemes, but some are not. I see the Cabinet Secretary for Education and Lifelong Learning sitting in the front row, listening intently. I am sure that he will take that away and consider how we can ensure that all youngsters in Scottish schools have access to those programmes.
The Presiding Officer: Minister, would you like to tell the cabinet secretary what he should be doing about education?
Fergus Ewing: I might just resist that invitation, Presiding Officer.
To be serious, Craig Johnstone makes an excellent point. I am pleased to hear that he has enjoyed a positive experience as a result of the attempts to help him in his business. I congratulate Giglets Ltd.
In providing that mechanism to improve how we help young people to understand business and therefore become interested and inspired to take up business, we need to involve our business representative bodies. Without buttering them up unduly, they are doing a huge amount of work. I know that the Confederation of British Industry, the Institute of Directors and the Federation of Small Businesses are all here in strength, listening to what you say. They are already leading and co-ordinating a lot of that work. Rather than having a Government scheme, the best mechanism that we can come up with to improve our act is to work ever more closely with the business organisations that I have mentioned. I should say that the Scottish Council for Development and Industry is here, too. If there are others, forgive me for not name-checking you.
Business organisations have the people, the members, the local connections and the
connections with schools. Only by harnessing that enthusiasm and drive can we ensure that we help young people in the best possible way. That should be an essential part of any initiative that we come up with to help to improve our ability to communicate effectively with young people.
The Presiding Officer: We have time for one more question—from three rows back, with the white shirt and the very nice tie.
Andy Willox (Federation of Small Businesses): So many good ideas are coming out today. I sincerely hope that at least some of them materialise.
I say to Ewan Hunter and the other gentleman that we deal all the time with barriers to growth for small businesses, and we work hard towards different things. However, there are two issues that we have noticed recently, both of which have come up today. The first is that when schoolchildren are asked what they want to do with their lives, business is not mentioned or is very low down their list of priorities. At our fringe event, pupils mentioned that parents are sometimes a big barrier to children getting into business because they do not seem to think that it is a safe thing for their children to do.
An initiative that the FSB has developed over the past year is real-life entrepreneurs and—meaning no disrespect to any of the visitors here—some of the young people that have been listed today, such as Brewdog and Alison Grieve, who was at our workshop, are the ones that the young people in schools relate to. They see that it has been done recently—in real life—and, obviously, it is seen throughout the schools, as has just been said. There are always local entrepreneurs who have done well and who they can relate to locally.
How do we roll out what we call the real-life entrepreneurs? How do we roll out the people who have just started and made a success for themselves, who have jumped and rolled over the top of the barriers that people see in young peoples’ localities and communities?
The Presiding Officer: We will take a quick run through the panel, starting with John Park.
John Park: The minister touched on that. We need young people to have all the information so that they are able to make choices. In my opinion there is bit of a disconnect. Young people spend a lot of time in the education system, but perhaps they do not get that external influence if they do not get it from their parents or the organisations that the minister has mentioned.
I went into schools with private sector companies to speak to pupils, particularly in areas where there are big, industrial opportunities and where there might be careers. We need to have a much more coherent approach to that. Of course,
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the curriculum for excellence is coming on stream and that will start providing many people going through the system with the life skills and other skills that they need to make choices. The advice and guidance that they get are really important, as is their parents’ influence. Just for the record, neither of my daughters will be going into politics.
Murdo Fraser: We have talked about role models and the need for entrepreneurs—particularly young entrepreneurs—to be seen to be relating to young people. That is hugely important, whether it is done in school or in some other way, and it is an issue that we need to think about.
There is another issue. In my experience, entrepreneurs, particularly ones who are getting a business off the ground, are very busy. They are probably focused on growing their business and employing people and will not necessarily have huge amounts of time to give up. We need to think about how we can make it easier for entrepreneurs to come together and give up that time.
I was very taken with what Sir Tom Hunter said. He made a lot of money, then—having done that—thought that it was time to start putting something back because he had reached a stage in his career where he was very successful and comfortable. However, many entrepreneurs on their way up do not have that time available. We need to think, with the education authorities, about how we fit all that together.
Patrick Harvie: Several questions have touched on the promotion of role models and young people’s expectations, and on the expectations that their parents and we, as a society, have of them. In many ways that relates to pretty much every behaviour change that politicians talk about. We talk about healthy eating, antisocial behaviour and trying to change it, and environmentally responsible behaviours. Behaviour and social change do not happen because of a strategy document or even just by providing information. They happen because of how people relate to one another—through learned behaviour. We all learn how to behave through the people whom we see around us and the relationships that we have in our community. We need to try to harness that.
A young person need not see a business role model just as somebody whom they have never heard of landing in their school one day and giving a lecture; they could be thinking about the wee shop that they get their lunch from every day or about the fact that many more schools are being encouraged to buy local food. In that way, they are learning about the businesses that supply the products that they eat for their lunch every day. If we thinking about what exists in every community—things that people already have
relationships with—the idea of starting or running a business is not scary and alien, but is normal and just around the corner. People learn to change their behaviour because of the people whom they know and the community that they feel a part of.
13:15
Fergus Ewing: When I was a boy at school, I learned virtually nothing about business, so obviously I became a solicitor. To be serious, however, the answer is that we need to work more closely with education colleagues throughout Scotland, especially at local level. To be fair to them, Keith Winter, who is here from Fife Council, took part in a workshop discussion earlier and explained to the business people in the group all the good things that Fife Council has already done to achieve the objectives. We should not assume that good things are not happening. However, there was a suggestion that things are patchy and that some parts of Scotland do better than others.
It is not a matter of conflict or of people being in the wrong or the right; it is a question of it being ultimately our responsibility, as Government ministers, to deliver and to make sure that every part of Scotland, every education authority, every school and every college is agreed on and acts on delivery of the agenda for better communication for our young people. I am extremely heartened that, across the panel, there seems to be absolutely no disagreement about that, which is extremely encouraging in terms of achievement of the objectives.
The Presiding Officer: Thank you very much. I thank everybody who asked a question. I am sure that you will join me in thanking the panel members for their contributions. [Applause.]
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Closing Speech
The Presiding Officer (Tricia Marwick): John Swinney MSP, the Cabinet Secretary for Finance, Employment and Sustainable Growth, has been with us throughout the day. I invite him to give his closing speech.
13:17
The Cabinet Secretary for Finance, Employment and Sustainable Growth (John Swinney): I begin by thanking you, Presiding Officer, for convening our proceedings today and for providing the platform and forum for us to have this the dialogue, which ensures that we as a Parliament are able to engage fully and effectively with the business community.
Today’s event is the high profile part of parliamentary engagement between members of Parliament and the business community. Of course, many other discussions go on daily between members of Parliament—in particular, ministers—and the business community, which gives us the opportunity to hear the views of business and to reflect on them, in terms of our priorities.
We were very grateful to have our proceedings kicked off by Sir Tom Hunter, and I will draw on a number of the points that he made to set the scene for our discussions. In essence, he encouraged us—in that age-old Scottish way—to debate whether we are looking at the glass half full or half empty. There is the odd day in this chamber when I think that some people are looking at a half-empty glass that I think is more than half full, but that is the nature of parliamentary debate. That way of thinking about the circumstances that we face is very relevant to the points about the economy that Sir Tom made. Yes—very significant threats to economic prosperity are clearly emerging from the volatility and uncertainty in the euro zone but, equally, countless economic and business opportunities exist here for Scottish businesses in terms of international activity, which should give us great encouragement. We either look at the economy as a glass that is half empty because we are concerned about the inevitable difficulties that we face regarding the euro zone, or we look at the many great opportunities to strengthen and improve our economic performance that exist in Scotland today.
The second very important contribution that Sir Tom made to our discussions was to chart, through his experience of creating a successful enterprise, how he has tried to encourage greater focus on entrepreneurship through the establishment of the Hunter Foundation, the Hunter centre for entrepreneurship at the University of Strathclyde, and Entrepreneurial
Spark—the launch of whose facilities in Ayrshire I had the privilege of attending yesterday. It is not every day that I come back from an event feeling as hyper as I felt when I came back from yesterday’s event. If you are ever feeling a bit on the dour side, I encourage you to go to Dundonald and spend 15 minutes sitting in among what is going on there. It was enthralling and inspiring to watch what is happening and to be part of it.
There is an important point about all of that. The Government puts in place a range of business development solutions and approaches to try to encourage greater levels of entrepreneurship and greater levels of economic activity. However, we do not take the view that we have all the answers and can design all the provision. There is an invitation to the business community to contribute ideas, thoughts, proposals and solutions that you consider to be of assistance in that process.
Few of my parliamentary colleagues will consider me to be much of a man for quoting Mao Zedong. He said, “Let a thousand flowers bloom and a thousand ideas contend”, and our thinking in this area is very much along those lines. There is an invitation to the business community to reinforce the approaches that Sir Tom has taken over many years and for which we are grateful.
The final point of Sir Tom’s contribution was important. He summed up better than I could, in a few words, something that I have been banging on about for years. He said that we are a speedboat against a number of supertankers. That rather sums up Scotland today. Frequently, we are presented with a particular problem and are able to bring together all the players to resolve that difficulty and deliver a better outcome. At the dinner last night, I cited the experience of the food and drinks sector. Richard Lochhead has given extraordinary leadership, has got everybody focused in the same direction, has got industry motivated behind a strong and clear strategy and has put in place the infrastructure to deliver a strong result. What has happened because of that? Scottish food and drink exports have exceeded £4 billion for the first time. We should not be surprised by that. It has happened because we have behaved like a speedboat, and not like a supertanker. That invitation to find fast solutions to the challenges that we face is part of the Government’s thinking in this area and demonstrates how we try to deploy our energies.
Also at dinner last night, I talked about the point of this occasion, which delegates will have seen at each of the events today. Members of our staff have been taking extensive notes on all the points that were made. I have not heard the feedback from all the workshops, but during the one that I was at, it was suggested that the Government should take a greater role in supporting business start-ups by, for example, supporting a patents insurance scheme; by ensuring that people have
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greater experience of selling products; by establishing a Scottish entrepreneurs fund; or by exploring other funding models. Those are just a few of the suggestions that I heard. Many more will have been made in other workshops, and ministers will be considering all of them. If we determine that what we are doing can be enhanced, it will be enhanced.
One of the major points that has been kicking around in this question-and-answer session and which was also part of what Sir Tom had to say to us is the need to ensure that we align education with the needs of the economy. That might sound like a statement of the bleeding obvious, but ministers are aware that we need to ensure that that is more a reality than a hope.
Many of the reforms that the Cabinet Secretary for Education and Lifelong Learning—who has been here all day and was with us last night—is taking forward are designed to ensure that our entire education proposition, from primary school to secondary school through to the further and higher education sectors and our numerous training and skills development interventions, is focused on meeting the needs of our economy. That runs through all our actions, and I give the commitment that the Government will intensify its efforts to make sure that that vision is realised.
There has been a great deal of talk about motivating young people to be more aware of and interested in entrepreneurship through the education system. One of the purposes of curriculum for excellence is to do exactly that. It is not to put business studies into a compartment in which only some people are involved; it is to expose all the children in our education system to a broad curriculum that enables them to acquire skills and become confident and articulate individuals who can present their own ideas and aspirations within the working environment, particularly within the business community.
It is tremendously encouraging to see emerging ventures. I told the group that I met this morning that I was at an event in Parliament a few weeks ago at which I had to sit down with the managing director of a fair trade organisation and the chief executive of a fair trade cafe. Neither was older than eight years of age, but they were very forceful and powerful in what they had to say for themselves. I cannot imagine that they will forget giving me a good lecture—which was well expressed and firmly based—about how to manage finances and keep costs under control. They are an indication of the fact that our schools are responding to the challenge of ensuring that a broad curriculum is delivered to young people within Scotland.
Much of that fits into the matters of business development and encouragement of entrepreneurship and the whole business
development process. Once companies have started up, we have to get them to grow and internationalise; they have to be able to play on the world stage. Yesterday, we heard the wonderful news that Alexander Dennis Limited, one of our major manufacturing companies, put the boot on the other foot and acquired a company in Australia. Headquartered in Falkirk, it will now become perhaps the largest bus manufacturer in the world. That is putting the boot on the other foot. It is a tremendous investment by those who lead the company.
We have to get the pathway of business support absolutely correct. One of the contributors at the workshop that I was in made the important observation that all the support is there if people know how to tap into it. We might have to look at how we make the available support approachable and accessible so that people can do that. Craig Johnstone has just illustrated the importance of that pathway. If there is youth enterprise in the schools, a person can have a business idea before they are 17 and be running the business before they have left school by tapping into PSYBT, business gateway and—hopefully—Scottish Development International
I have experience in my constituency of start-up companies that within a couple of years have been exporting more than 50 per cent of their products. Why? It is because they have got on and done it. Why has it happened to one company but not to the next company? The answer is not terribly sophisticated; it is just that one company has had courage, leadership, determination, aspiration and ambition. We have to ensure that those qualities are more widely shared across the business community.
Sir Tom Hunter said that we should innovate and innovate and innovate. He is absolutely correct. There is all sorts of innovation in the key sectors on which the Government is focusing its activities. I do not say that to be in any way complacent, but to indicate that there is progress, which must go on all the time. In energy, the wave and tidal devices about which people were sceptical a couple of years ago are generating electricity in the Pentland Firth and the waters around the Orkney Islands. In life sciences, I am pretty certain that the Scottish centre for regenerative medicine will find cures for some of the most intractable diseases that afflict our population.
The tourism sector is maybe not everybody’s choice, but there is innovation in my constituency in that regard. For example, you can go to a fixed-platform bungee jump over the River Garry at Tummel Bridge. That is not my cup of tea, but it is there for you all to take part in. You cannot get a booking for love or money, because it is so successful.
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In the creative industries, the digital design studio, which is a joint venture between Glasgow School of Art, Arup Acoustics and others, is doing some tremendous mapping work. It works, too, with Historic Scotland—the Cabinet Secretary for Culture and External Affairs is here today—on world-leading digitisation of some of the great artefacts of the world.
Our universities are at the heart of the innovation process, working with spin-out companies in food and drink, for example. We are constantly finding new products and new ways of promoting them as part of our export activities. In financial services—another of the seven key sectors of the economy—we can see the fruits of that innovation work emerging. There is a focus on innovation and I can assure you that the Government is providing, and will continue to provide, intensive motivation for that process.
I will close where I started—on judging whether the glass is half full or half empty. You might have gathered that I am a bit of a glass-half-full type. I think that there is a lot to be positive and optimistic about in Scotland. We have the capability—I want to make it clear to you that there is capability within the Government to get it all joined up and working effectively for the interests of our citizens. We are actively pursuing that dialogue and partnership with our colleagues in the business community; the trade union community, whom we see on a regular basis; and the third sector, with whom we work. The First Minister made a point about the blossoming growth of social enterprise in Scotland, which is another great feather in our cap.
We invite you to continue to work with us. There is a host of specifics from today that we will look at and we will absorb them into the Government’s programme, if we can.
I express thanks on behalf of the Parliament and the Government—we put this event together as a joint venture—to Sir Tom Hunter for an absolutely outstanding and inspiring contribution to our day today, to each of the speakers who contributed to the groups, to our parliamentary and Government staff, who have worked so hard to put this event together, and to every one of you who has given up valuable time to enhance public policy in Scotland by your constructive contributions to the day.
The Presiding Officer: Thank you very much indeed, cabinet secretary.
As the Presiding Officer of the Scottish Parliament, I can say that it has been an enormous privilege and honour to host the business in the Parliament event. I look forward to next year’s event.
I thank all the speakers and all those who contributed. In particular, I thank Tom Hunter. I
thought that his speech was absolutely inspirational.
Thank you very much indeed to the First Minister, the cabinet secretary and, indeed, all the ministers and MSPs who have been here today. I hope that delegates got the opportunity to bend a few lugs and to ensure that you got your points across.
Let me finish with a quote, because we have had lots of quotes today. While I might have been surprised at the cabinet secretary quoting Chairman Mao, let me now quote Lenin.
John Park: John Lennon?
The Presiding Officer: Not John. [Laughter.] Let me quote Lenin:
“You can’t make an omelette without breaking a few eggs.”
I invite all of you to stay engaged with your MSPs and to continue to tell us exactly what you think, whether you think it will work or not. As the cabinet secretary made very clear, we need ideas to be able to drive Scotland forward and I know that sitting in this chamber are the very people who will do that.
Thank you once again and have a safe journey home. [Applause.]
Meeting closed at 13:34.
