Scotland's hugely disproportio-nate role in the economics and history of the UK has long been a peculiar feature in the development of that island nation.
With its relatively small population, currently just over 5 million, Scotland's role in the development of the UK has been far greater than its size should allow. Indeed, it can be the cause of mild discomfort for the average Englishman to be reminded of just how many great Britons actually heralded from north of the border. The inventor of the telephone Alexander Graham Bell, author Sir Arthur Conan Doyle, industrialist and philanthropist Andrew Carnegie, economist Adam Smith and the discoverer of penicillin, Alexander Fleming, were all Scots.
Perhaps the difference these days is that increasingly, Scots do not have to go south of the border to find the biggest companies, the best opportunities or make the biggest impact in their chosen fields. Take finance as an example. After London, Edinburgh and Glasgow are the UK's major financial centres, and Scotland, the sixth-largest equity centre in Europe, managing almost US$630 billion in funds.
The Royal Bank of Scotland, the world's most profitable bank, has just opened its first branch in Shanghai and the merger of Halifax and the Bank of Scotland into the HBOS has created one of the UK's largest banks. Other Scottish financial institutions include Standard Life, Intelligent Finance, Scottish Widows and a couple of dozen fund management companies.
It is the job of Raymond Prendergast, the Asia Pacific director of Scottish Development International (SDI), to spread the message. With a budget of US$800 million, the organization is tasked with developing a strategic framework for developing Scotland's business image and attracting FDI from Chinese and regional companies looking to invest abroad, whilst also helping Scottish companies set up on the mainland.
Prendergast accepts that Scotland's popular image is hardly of the high-tech variety, still dominated, at least in China, by traditional images of golf and, more recently, whisky.
"We are still at the early stages, but we are working to develop Scotland's business image," he says.
"The SDI needed to be more proactive so we relocated to Shanghai where we are building relationships and identifying companies which might be suitable to invest in Scotland."
And Scotland's traditional image need not be seen as a hindrance, adds Brian Caplen, editor-in-chief of the Financial Times' FDI magazine, which has just awarded the area the title of "European Region of the Future", not least because of its enviable record in attracting foreign investment.
"At least Scotland is already known. What can, say, the north-east of England offer in comparison?" he asks. "Scotland won the award in part because it has capabilities in key areas, including high quality education and universities, job-market flexibility as a well as its programme of attracting FDI, which has been highly effective."
One of the key attributes that influenced the FT's FDI panel's selection of Scotland was its record of producing graduates. Scots are proud of their education system which, in most respects, handsomely outdoes its English counterpart. Figures quoted from the FDI magazine show that the number of graduates per capita in Scotland is the highest in the UK, currently standing at 33 per cent of the population aged 18 to 30. Furthermore, 27 per cent of the population has been to university.
Vital though education is, it is the universities' co-operation with the business world that sets Scotland apart, says Prendergast.
"Three intermediate technology institutes have been set up to provide a bridge between research and commerce," he notes.
"FDI plays to our strengths - don't forget that indigenous businesses and start-up companies can grow and develop on the back of FDI."
A key element of Scotland's drive to bring in FDI, R&D Plus, has seen Scottish authorities share costs with larger companies setting up research and development facilities.
Scotland is also repositioning itself as a centre of excellence in the biotech, software, electronics, creative and energy industries. The life sciences industry has seen the pairing of Scotland's strong tradition of academic research with commercial investment and made it a "global competitor" - becoming Europe's fastest growing industry, increasing at an annual rate of 20 per cent. "Traditionally we have been very strong in life sciences," says Prendergast. "In some cases our history goes back hundreds of years."
In the sphere of creative industries, first defined by the UK government in
1997 and subsequently highlighted as an area of growth, Prendergast cites the University of Abertay in Dundee, which has pioneered courses in computer games-related areas, as a success story. The two undergraduate degrees available in Computer Games Technology and Game Production Management have put Scotland squarely at the forefront of this US$19 billion industry. 2003's biggest selling games were all developed in Scotland.The country has also been effective in targeting other high-value industries, says Prendergast.
In microelectronics, Scotland is responsible for 7 per cent of European semiconductor production and capacity and 47 per cent of UK capacity. In the biotech industry, it is responsible for 20 per cent of the UK industry, employing some 24,000 people. Meanwhile, high-tech companies such as US defence contractor Raytheon have recently set up in Scotland to build missile guidance systems for jetfighters.
"Scotland is no longer in the years when it attracted large-scale manufacturing jobs. Now it is offering excellent value for money among high-value industries," he says.
(HK Edition 11/26/2004 page18)