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Enterprise and Culture Committee, 28 Jun 2005

28 Jun 2005 · S2 · Enterprise and Culture Committee

Item of business

Business Growth Inquiry

Alan Wilson (Scottish Council for Development and Industry): Watch on SPTV

Thank you for the invitation to the committee. I apologise for producing a written submission that is 21 pages long—I did not notice until afterwards that it should have been six pages long. Members may divide the report by three and regard it as three separate reports. Perhaps then they will forgive meI do not intend to make a long introductory statement. We undertook a Scottish business growth survey in 1994 and I am happy to give the clerk a copy of the report on the survey. Some of the principles that we considered in 1994 are similar to those that the committee is addressing. Two points came out of the survey: if a company wants to grow it must make a positive decision to do so; and if a company is to grow satisfactorily it must attract new blood and new management. I whisper that, because some people think that I have been at SCDI for far too long and that it might be time for SCDI to grow. Positive decisions and new blood are the two factors that enable companies to take off.The second point that I want to make by way of introduction concerns business rates. In October 2003, we responded to a challenge that Andy Kerr set. He said, "Prove to us that if we freeze or cut business rates, the money won't be squandered, but will be invested in capital, research and development and employment terms." Of course, doing that is difficult; indeed, picking one taxation mechanism and saying what its impacts are can be almost impossible. Anyway, we tackled the impossible and surveyed our members. I have a short report here that summarises 100 responses that indicate that moneys were put back into investment, employment and research and development after the business poundage rate freeze in 2003. I raise that issue because I read in the press recently that the same old challenge was coming from the Scottish Executive. I would like to leave the report with the clerk, if he wants to look at it.Thirdly, I read John McGlynn's interesting evidence to the committee last week. Members will recall that he talked about the Scotland House concept, and I would like to put a little flesh on what he said. As members know, Brussels has a thriving, multisector Scotland House, which brings together the private sector and the public sector in partnership. The building has been there for a considerable time. John McGlynn told the committee about the Scotland House in Tallinn, which is in its infancy and is driven by the private sector. He also touched on other possible Scotland Houses in Lithuania and Delhi. I know that Scotland Houses in Shanghai, New York, Dubai and Prague are also being talked about, and there are bound to be others.Such operations are driven by the private sector, but we should ask where the public sector fits in, if at all. Where does Scottish Development International fit in? I imagine that it is not too worried about what is happening in Tallinn, as it is not there. I would be interested to see what happens in Shanghai and Delhi specifically, if proposals go ahead. Perhaps the focus should be on SDI becoming a partner with the private sector in those and other locations.John McGlynn also mentioned in his evidence that there is doubt about the future of horizontal or mixed-group trade missions, which SCDI has organised for more than 40 years. If that is the case, we have won a stay of execution for one year—we bid for and received funding from UK Trade and Investment via Scottish Enterprise for one year only. I hasten to add that SCDI does not receive the funding—the companies that participate in the trade missions get it. We are worried about the long term, however, from April next year. We will certainly explore the possibility of continuing the programme, which, as I say, we have undertaken for more than 40 years with travel subsidy grants via the SDI system for company participants.That concludes my opening remarks. I thank the convener for coming to Stirling a few weeks ago to address the SCDI's executive committee on the same subject that we are discussing today. I am conscious that we have yet to give the convener a written report about that, but it is sitting on our desks and will be with him soon. The Scottish Council for Development and Industry has also offered to organise meetings between committee members and our members throughout Scotland—I think that Aberdeen and Inverness have specifically been suggested—and that offer is still on the table, if any member wants to take it up. The issue is important and complex and I do not have a magic wand in my pocket, but we are happy to take questions and we will do our best to answer them.

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Enterprise and Culture Committee, 28 Jun 2005

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