Scotland's Economy

Scottish Business Buzz (27.08.15)

Screenshot 2015-08-27 10.45.34Scotland is celebrating an unprecedented 12-month period of being in the world’s spotlight, during which time more than 622,000 spectators attended golf events watched by hundreds of millions of fans around the globe.

An independent study which shows the event at Gleneagles attracted more than 63,000 visitors from outwith Scotland and supported spend in excess of £106m for the host country.

Sam Torrance, vice captain in the European Team at Gleneagles and a competitor in the Prostate Cancer UK Scottish Seniors Open, joined VisitScotland chairman Mike Cantlay at Archerfield to publish the report compiled by Sheffield Hallam University’s Sport Industry Research Centre (SIRC).

Torrance, who was also a winning European captain at The Belfry in 2002, said: “This has been a phenomenal 12 months for golf events in Scotland. From the unforgettable scenes at Gleneagles last September to playing here at Archerfield this week in the Prostate Cancer UK Scottish Seniors Open, it has been an incredible year and shows what a wonderful country Scotland is for golf.

The report showed that £106m was spent in Scotland as a direct result of hosting the Ryder Cup – including the event week and extended stays by Ryder Cup attendees – £22m of which was in the host region of Perth & Kinross.

Other key findings from the report include:

– 57 per cent of event spectators came from outwith Scotland with 22 per cent travelling from overseas to attend the event.

– Attendees at The Ryder Cup accounted for a total of 133,104 bed nights during the week of the event alone whilst a further 10,793 attendees extended their stay either pre or post event, which accounted for an additional 57,758 bed nights.

– Almost three quarters (73 per cent) of accommodation providers reported greater than normal takings compared with September 2013 with an average 21 percentage point increase.

– Spectators were inspired to return to Scotland with 68 per cent of attendees from outwith the country indicating they would visit Scotland within a year for a leisure break.

– The media value for the event totalled £42m, including the provision of more than 5,000 hours of television coverage by 50 broadcasters in 200 territories.

You can read more about the report in Aberdeen Business News.

James Withers

James Withers

Scotland’s food and drink sector, which currently employs about 360,000 people, expects to create as many as 14,000 additional jobs by 2020.

Food and drink producers across Scotland are predicting further growth in the coming years despite rising costs and increasing regulation.

Figures released today in Bank of Scotland’s fourth annual snapshot of the industry indicate an increasing focus on exports and innovation following a record year for Scottish food sales abroad.

By 2020, producers forecast an average 19 per cent growth in turnover. The industry is currently worth £14 billion, with the Scottish Government targeting £16.5bn by 2017.

Nearly half of firms said hiring extra staff would help boost sales. Additionally, almost two-thirds are looking to develop new products to help generate growth.

On average, businesses within the sector plan to re-invest 27 per cent of their current turnover back into research and development during the next five years. More than half expect to form partnerships or explore other forms of collaboration to develop new products, streamline manufacturing and boost productivity.

And collaboration is at the heart of the growth success, according to the article in The Scotsman.

James Withers, chief executive of Scotland Food & Drink, said a new era of co-operation has been crucial in jump-starting the sector to its current position as Scotland’s best-performing manufacturing industry.

“Different sectors, from seafood to red meat to whisky, now work together to build our national reputation,” Withers said. “So too individual businesses work together, and we have a public sector responding to industry leadership. Competition is healthy but collaboration opens up new markets and relationships.”

More funding for town centres

More funding for town centres

£1.7m of funding will be invested to help revitalise and regenerate town centres across Scotland.

The Town Centre Communities Capital Fund is open to community organisations to support capital projects which will make real and lasting improvements to town centres.

Social Justice Secretary Alex Neil made the funding announcement while on a visit to the Beith Development Trust in North Ayrshire. He said: “Scotland’s town centres need to be fit for the 21st century, offering a diverse range of businesses, services and activities that meet local demand. There are already a few examples of communities getting involved in their town centres, introducing innovation and helping to reclaim them as vibrant social spaces

“The Scottish Government recognises that people across Scotland are interested in the future of their town centres. This £1.7m through the Town Centre Communities Capital Fund is intended to support enterprising communities with project proposals that complement our Town Centre Action Plan.”

Eligible community groups can bid for grants from £20,000 to a maximum £150,000 per project. More on this in Business Quarterly.

Kerry Sharp, Head of the Scottish Investment Bank

Kerry Sharp, Head of the Scottish Investment Bank

Scottish Enterprise has said its investment arm invested £66.5m into 155 Scottish companies in the last year, attracting £99m of private investment.

Scottish Investment Bank said the level of investment in 2014/15 was more than double on the prior year.

The 2014/15 year saw 46 new companies added to Scottish Enterprise’s investment portfolio, taking the portfolio total to 275 companies. SIB said it also supported five company exits in the 2014/15 year, which served to raise income generated from investment activity to £9.5 million.

Investment by sector was dominated by renewables (54 per cent), followed by life sciences (16 per cent, technology and advanced engineering (15 per cent), creative industries (eight per cent), energy (four per cent), ‘other’ (two per cent) and food and drink (one per cent).

SIB said 2014/15 was a “record year” for investment in renewable energy, with £32.4 million invested in 21 renewable energy deals.

Its Renewable Energy Investment Fund also leveraged £64.5 million of “additional public and private sector investment”.

Commenting on the results, Kerry Sharp, head of SIB, said: “Scotland is bursting with dynamic businesses with big growth ambitions and in the last year, we have worked with a range of companies at different stages of their development, from start ups such as Big Data for Humans through to expanding companies going global, such as Clyde Bioscience.

“We have continued to invest into Scotland’s growth sectors, including life and chemical sciences, energy, technology and advanced engineering, creative industries and food and drink.

More on this in the Daily Record.

Screenshot 2015-08-27 10.59.43A consultation has been launched, focusing on creating a more circular economy in Scotland – where products and materials are kept in high value use for as long as possible.

The consultation, which will run until the 30th October 2015, is the first step in preparing a circular economy strategy for Scotland – targeting significant potential benefits for the economy, through using resources more efficiently, creating new markets and improving resilience; for the environment, through cutting waste and carbon emissions; and for communities, with lower cost ways to access the goods we need.

Environment Secretary Richard Lochhead said: “The average UK household owns around £4,000 worth of clothes and around 30 per cent of clothing or 1.7 billion items in our wardrobes has not been worn for at least a year. The cost of this unused clothing in Scotland is around £2.5 billion.

“In a world of finite resources, where global population and consumption growth are generating volatility and vulnerability in the supply of raw materials, the circular economy approach offers a new and exciting perspective.

“At the end of the day, it comes down to making things last – whether that be designing complex products to enable remanufacture, or quite simply empowering people to repair household items instead of throwing them away, the concept makes sense for business, industry, the public sector and individuals.

You can read the full article in Click Green here.

Screenshot 2015-08-27 11.01.43Edinburgh is being hailed as a major technology hub as new figures show a record number of university start-ups.

The University of Edinburgh said it supported 44 start-ups and three spin-outs last year, taking the total to 184 in five years.

Investment in university-founded companies has also hit a record high – with backing of £237m in 2014/15. The university said research innovation was helping the city become the UK’s largest tech hub outside London.

Recent commercial successes include spin-out pureLiFi, whose light-enabled internet technology is being incorporated at the home of the Golden State Warriors basketball team in San Francisco.

Grant Wheeler, head of company formation at Edinburgh Research and Innovation, the university’s commercialisation arm, said: “Whether it’s from the world-class research base or from the student entrepreneurs, we’re seeing new companies being formed here and in record numbers.

“And more and more have the potential to develop further.”

More on this on the BBC website.

Screenshot 2015-08-27 11.04.55A series of new reports has highlighted significant growth potential for Scottish SMEs.

Almost half of all SMEs have introduced new products or services in last 12 months and one third do not export despite having a suitable product, highlighting the potential for further growth.

A trio of Scottish Government reports also confirm the recent trend towards home-based businesses with 68% of all SMEs in Scotland and 43% of SME employers running their business from home. This compares to 56% and 22% in 2012.

The three topic reports follow the publication of the Small Business Survey earlier this year. They focus on SME innovation, exports and home-based business.

Key findings include:

  • 43% of SMEs had introduced new or improved products or services in the last 12 months
  • 29% have introduced new or significantly improved processes in the last 12 months
  • 34% of firms have never considered exporting, despite believing they have a suitable product

The proportion of home-based businesses increased substantially between 2012 and 2014.

Business Minister Fergus Ewing said in Business Quarterly: “Fostering a culture of innovation, promoting inclusive growth and boosting Scottish trade on the international stage have all been identified as key priorities in Scotland’s Economic Strategy and these new reports will help us to better work with the SME sector to deliver them.

“I welcome the increase in the number of home-based businesses and I am encouraged by the rise in entrepreneurialism signified across these findings. This reflects the Scottish Government’s commitment to creating a supportive business environment conducive to sustained economic growth and recognises the continued importance of SMEs to our economy.

“The data also indicates where we can further concentrate our efforts – highlighting the considerable potential that exists in our SME sector to pursue new, international markets and to build upon recent successes in the area of business innovation.”

About the author

Michelle Rodger

Michelle is a former national newspaper journalist who co-founded an award-winning IT business before launching Tartan Cat Communications. A social media and crowdfunding expert she manages media and communications for Business for Scotland.

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