Meeting of the Parliament 10 September 2015 [Draft]
I welcome this short Economy, Energy and Tourism Committee debate on internationalising Scottish business and I commend Murdo Fraser, the committee convener, for the way in which he led the inquiry.
We cannot be complacent, and I will talk about the conclusions that the committee arrived at, but we are having this debate the day after it was announced that Scotland exported £14 billion of food and drink in 2013. As Jackie Baillie said, we shipped £27.9 billion of goods and services overseas, which she translated into a GDP figure without including the impact of exports to south of the border.
As I said during last week’s debate on the programme for government, if there is one subject about which I am particularly passionate, it is Scotland’s place on the international stage. Consequently, I am passionate about Scotland’s strategy for trade and investment around the globe. My interest was perhaps stimulated when I was a young manager responsible for the international distribution of NCR products from the company’s Dundee manufacturing plants. The thrill of shipping four class 395 electronic accounting machines from Dundee to Honduras in exchange for a container-load of bananas was palpable. Who knows what might have happened last September if we had involved bartering and bananas in our currency discussions?
Other members share my great interest in the subject. I hope that you will forgive me, Presiding Officer, for declaring that I regret that today’s two debates are curtailed. They are not mutually exclusive, and I am sure that members who speak in the Infrastructure and Capital Investment Committee debate will make the point that Scotland’s international business growth and exports to Europe cannot largely depend on one major route to Europe—the channel tunnel. Members might also point out that our international aspirations cannot be contingent on carbon emissions-heavy activities such as haulage, with Scottish goods travelling down the M6 to Heathrow, Gatwick and Dover. Hence there was a proposal some weeks ago—which you will appreciate, Presiding Officer—to fly seafood and perishable goods out of Prestwick airport and other outlets, at not much greater cost than that of transporting goods by road, to retain our markets and customers.
Let me return to the committee’s recommendations and to the speeches in the debate. In a thoughtful and thought-provoking speech, Gavin Brown was right about the need for accurate data. Linda Fabiani surprised me: I thought that East Kilbride was famous for Coca-Cola, not Deep Heat—I have a totally different view of East Kilbride now. Joan McAlpine was right to focus on regional disparities in the economy. I say to Cameron Buchanan, who talked about specialisation and product focus, that I played golf with the Chinese consul at Turnberry at the weekend; I did not break any chandeliers, but the way in which I played broke my heart.
I met senior members of Scottish Enterprise and Scottish Development International last week to talk about regional disparities and the need for more emphasis on south-west Scotland, which Joan McAlpine mentioned. That conversation, like previous ones, left me in no doubt about the agencies’ dedication to achieving the objectives on internationalisation that I think will be set out in the Government’s new trade and investment strategy, which will not just focus on the products and service sectors in which we excel but relate sectors directly to the geographical markets in which opportunities for us are crystallising.
The recommendation that the agencies review the criteria for account-managed status, with a greater emphasis on companies’ export potential, is critical. That is particularly the case given that a recent Scottish Chambers of Commerce survey found that 65 per cent of non-exporting companies thought that they did not have suitable products or services to export.
Who knows? With appropriate promotion and marketing, and the involvement of the various trade missions, we might be able to capitalise on the huge opportunities that exist overseas.
Account management support is critical to companies that can and wish to export. However, the varied roles of agencies such as business gateway, the chambers of commerce, the enterprise agencies and other bodies that are interested in exporting are somewhat confusing. The situation needs to be rationalised and focused and, as the cabinet secretary said, SDI needs a mandate and a greater role in overseeing all companies that might and can become successful exporters.
In the committee’s opinion, that would enhance the increased focus on internationalisation. The total number of exporting businesses has already increased from 2,194 in 2010 to 5,388 in 2014 and we welcome the Government’s response that it will recognise internationalisation as a key driver for growth and that Scottish Enterprise will bring more companies into its international account management services.
However, as per the committee’s recommendation, that can be achieved only through the use of experience in and knowledge about exporting. Along with advice and help from the proposed mygov.scot website and the use of good experience and data, we can be successful.
For example, how many of our potential exporters know that the main destinations for Scottish exports in 2013 were the Netherlands, Germany, France, Denmark and the USA and that 50 per of all our exports went to the European Union? I refer to my earlier comments about having one single artery. Within the £14 billion, the largest growth in monetary and percentage terms involved exports to Denmark, believe it or not. Perhaps we can learn from what we are doing differently there—that may relate to different products and what have you.
Other growth markets provide product and service demand as well as market intelligence that is aligned to products and services and which has to be the basis of advice from our internal analysis and from external networks such as the globalscot network. Advice about our innovations and aid and engagement with international partnerships are also essential.
There is agreement that even closer relationships or partnerships between SDI and the overseas campuses of our universities and research centres are desirable, if not critical.
The committee recognised the need to change the enterprise culture in Scotland, to promote the opportunities and to measure the framework of improvement. Many aspects of exporting are healthy in terms of what the committee recommended and the Government’s response to that. I am pleased to support the Economy, Energy and Tourism Committee’s recommendations on internationalisation and I acknowledge the Government’s will in response to those recommendations.