1. business and industrial

Business Plan 2013-2016
CONTENTS
1
CHAIRMAN’S FOREWORD
2
CHIEF EXECUTIVE’S FOREWORD
3
RESpONDINg TO THE ECONOMIC OppORTUNITY
6
gLOBALLY COMpETITIVE COMpANIES
19 gLOBALLY COMpETITIVE SECTORS
29 A SUppORTIVE BUSINESS ENVIRONMENT
32 DELIVERINg THE LOW CARBON ECONOMY
33 FINANCIAL SUMMARY
36 MEASURINg OUR pERFORMANCE
Front cover image used with kind permission of the SECC.
Scottish Enterprise: Business Plan 2013~2016
CHAIRMAN’S FOREWORD
In times like these, it’s natural for businesses to focus on weathering
the storm. Our mission over the next three years is to shift that focus.
Now, more than ever, it’s time to think about growth.
innovation, international trade and investment and
low carbon.
We’ll be working with companies to seek out and
respond to opportunities – including opportunities
they might not have considered before. We will help
them make the robust decisions that will give them
the determination and confidence to make maximum
impact on their markets.
Our work will also focus on responding quickly to
key events like ownership change or innovative
new products, services or business models, to
capitalise on a period of renewed activity. So we’ll
keep recognising the importance of leadership and
organisational development and of innovations that
carve out a clearer route to global markets.
We’re not dismissing the challenges Scotland’s
businesses are facing. But it’s time we started
facing those challenges positively. There are
many Scottish companies who have seen – and
who continue to see – real growth in the face of
the worst recession in more than 20 years. That’s
something we should be celebrating and emulating.
It’s something that is very much within reach.
We’ll be seeking increased international trade and
investment in global markets where our companies
and their services have a high chance of success.
Digital technologies, for example, are going to
be crucial to the future success of Scotland’s
companies, so we’ll maintain a focus on making use
of them to help our companies grow.
Our Business plan is focused on nurturing and
developing growth in Scotland’s companies.
To make sure our approach is as effective as
possible, it’s built around those sectors identified
by the government Economic Strategy as offering
particular opportunities for growth – creative
industries, energy, financial and business
services, food and drink, life sciences, tourism and
universities, including the significant opportunities
from Scotland’s science, technology and advanced
engineering assets.
We won’t lose sight of the fact that many companies
are held back by lack of finance – we’ll keep helping
them find the support they need; whether through
our direct funding products or through services like
the financial readiness initiative from the Scottish
Investment Bank. providing that initial support helps
companies leverage additional help from private
sector partners, banks, and more.
Between them, these sectors account for around
45% of our gVA and about 30% of employment,
which makes their importance to the Scottish
economy very clear. Our strategy must, however,
also recognise that each sector contributes in a
different way and we need to ensure that our input
is tailored to add the greatest impact.
Over the next three years, we will deliver a clear and
robust business plan focused on opportunity and
growth. There’s no denying the difficulties still to be
faced, but early indications of lessening international
uncertainty; together with confidence in our work,
our partnerships and our determination, will help us
keep fostering investment opportunities, supporting
ambition and expansion and, above all, focusing on
Scotland’s economic growth.
We are determined to focus our efforts on what
works. That means prioritising our activities within
sectors according to the areas we have identified
as being key to progress: growth companies,
Crawford Gillies Chairman
1
Scottish Enterprise: Business Plan 2013~2016
CHIEF EXECUTIVE’S FOREWORD
Our aim is to make Scotland a more globally competitive nation.
P
That means helping Scotland’s businesses seek
out and make the most of international trade
opportunities; helping them make their product or
service offering robust enough to stand up to an
increasingly competitive international marketplace.
We’ve already seen some significant successes in
the past 12 months. We’ve led trade missions to
the US, Asia, the Far East and Australia, along with
turning our attention to emerging opportunities
offered in South American countries like Brazil
and West African nations like ghana. We want
Scottish companies to know where to find global
opportunities, and we want to offer them the support
they need to exploit those opportunities to their
fullest advantage.
A significant part of our planning for the next three
years involves building on the successes we’ve
already achieved and enabling Scottish companies
increasingly to see themselves as global players. In
the face of the worst global recession in more than
20 years, it’s imperative that they seek out every
possible new opportunity, and that means looking
outwith traditional business practices and borders.
In the years to come, we’ll maintain a focus on
developing that global thinking, ensuring everything
we do helps Scotland’s businesses adopt the
outward-looking mindset and culture that is so
crucial to their future success. We will help them
develop export activities and identify markets in
which they have the best chance of success.
Lena Wilson Chief Executive
2
Scottish Enterprise: Business Plan 2013~2016
RESPONDING TO THE ECONOMIC OPPORTUNITY
Our ambition is to help make Scotland more globally competitive.
Our Business plan for 2013-2016 sets out what we
are doing to achieve that ambition and how we are
responding to the economic challenge. The plan sets out
how we will stimulate investment and action through a
balance of short, medium and long term activity that will
help to rekindle Scotland’s economic growth.
Through programmes such as Regional Selective
Assistance and through our work with growth
companies, we have a direct opportunity to
encourage companies to consider recruitment and
employment, particularly among young people, as
part of their growth plans and ensure their business
is ready to respond when the global economy
improves.
The rolling nature of our business plan allows us to
build continuity into our operational activity and at
the same time, reflect changes in the economy and
new market opportunities. As such, we continue to
concentrate on our strategic priorities and maintain
a firm focus on the framework provided by the
government Economic Strategy with its emphasis
on growth sectors, growth companies and growth
markets.
Our response
To help us respond to these conditions, we need to
retain an unstinting focus on growth over the next
three years. That means a focus on areas where
Scotland already has competitive advantage and
where we know we can have the biggest impact, both
in the short and longer term.
Economic context
We can take great confidence from what this focus
has helped us to achieve over the past few years
and from our track record in helping companies
and sectors achieve success both at home and in
overseas markets. As the economy begins to pick up,
we expect to deliver even bigger and better results
for the Scottish economy.
global growth continues to be weak, compounded
by continuing uncertainties caused by the eurozone
crisis, cuts in government spending, rising
commodity prices and difficulties in accessing
finance.
As a small open economy, Scotland is not immune
to these global trends and there is no doubt that
economic conditions remain tough. However, we
have seen enough successes over the past few years
to know that Scotland can respond to whatever new
challenges emerge and ensure that the Scottish
economy remains competitive.
Through our connections at home and in global
business networks, we can help companies access
the latest market insights and intelligence that will
help them respond to changing market conditions
and new opportunities that emerge. The changes we
have made to our organisation in recent years will
also make it easier for us to respond and flex our
support as appropriate.
At the start of 2013, there are also signs of a more
promising picture emerging with exports increasing
and sectors such as food and drink, energy and life
sciences all showing signs of growth.
In responding to the economic challenge and in
order to meet the aims of the government Economic
Strategy, two key areas of work form the core of our
Business plan for 2013-2016:
That does not mean we are not alive to the
challenges that still exist, especially around business
and consumer confidence, which is holding back
investment and recruitment decisions.
Supporting the development of more globallycompetitive companies by offering an integrated
business support model where companies with
ambitions to grow can access the right type of
support at the right stage of their growth.
Unemployment in particular, is still at high levels
compared to pre-recession levels and around 20%
of Scottish 16-24 year-olds are out of work. Now,
more than ever, we need to help companies to invest
in new growth projects that will help to sustain and
create employment and respond to new opportunities
that will improve their long term competitiveness.
Supporting the development of Scotland’s growth
sectors by supporting positive and transformational
change and providing opportunities for Scotland in
global markets.
3
Scottish Enterprise: Business Plan 2013~2016
This dual focus is our primary response to the current
business challenges of reduced demand, slow
forecast global growth and constrained investment
whilst simultaneously, pushing the development of
more bold and longer term sector interventions to
potentially transform the economy.
During 2013 – 2014, we will
•
Innovation – company and sector innovation is a key
driver of productivity and competitiveness. With our
partners, we will take a more integrated approach
to stimulating innovation, knowledge transfer and
commercialisation, with a focus on getting more new
products and services into global markets.
To help us realise the potential that exists amongst
our companies and sectors, we also need to help
create a supportive business environment in which
they can thrive.
During 2013 – 2014, we will
Working with partners, we will help to ensure that
our infrastructure and connectivity is smart enough
and competitive enough to ensure the long term
sustainability of Scotland as a place to do business
and that individuals and companies across Scotland
benefit from the jobs and opportunities we help to
create from our investment.
•
help companies to achieve additional revenues
from innovation, worth up to £100 million over the
next three years.
International trade and investment – by identifying and
responding to significant global opportunities, we will
support more companies to start exporting and help
more experienced exporters to enter new overseas
markets and grow their international sales. Within an
increasingly competitive investment market, we will
also target strategic inward investment which develops
the competitiveness of Scotland’s sectors and helps to
create employment.
Our strategic priorities
For our Business plan, the Board of Scottish Enterprise
has identified five strategic priorities to guide our
response to the economic opportunities we face, and to
ensure we allocate resources where we know we can
have the greatest impact on Scotland’s economy. These
are:
By 2015, we will
Renewable energy – this is a significant
transformational opportunity for Scotland which will
also play an essential role in supporting the transition
to a low carbon economy. We will continue to focus
our investment where there is clear market potential,
based on existing competitive advantage.
•
achieve an increase of up to £1.7 billion in
international sales from supported businesses.
•
deliver up to 35,000 planned jobs through the
attraction of foreign investment, of which up to
12,000 are planned high value jobs.
Low carbon – by helping companies to improve resource
efficiency and adopt new low carbon business models,
we will help them to increased productivity and growth.
We will also help sectors to identify and respond to new
low carbon business opportunities as they emerge.
By 2016, we will
•
help our account managed companies to achieve
turnover growth of up to £1.3 billion.
initiate significant actions to develop commercial
manufacturing in offshore renewables, including
the development of supply-chains and attract
up to £350 million of additional private-sector
investment.
During 2013 - 2014, we will
•
Growth companies – in order to drive economic
prosperity and employment, we will continue to
prioritise our support to companies in Scotland with
the strongest growth ambitions. Our support will be
increasingly tailored to help companies achieve scale,
stimulate trade in overseas markets and help build
the competitiveness which can support growth in
Scotland’s key sectors.
identify up to 100,000 tonnes of CO2 savings arising
from our projects and company support that
improves efficiency.
In all these priority areas, we will work with business
to stimulate demand and optimise the use of digital
technologies to help Scotland become a world-leading
digital economy.
4
Scottish Enterprise: Business Plan 2013~2016
How we will deliver our priorities
impact on the economy of our investment and ensure
we are allocating resources where it will make the
biggest difference.
Partnership
Assessment shows that our investment proposals
and interventions have an important impact on the
Scottish economy over the short and longer terms.
They also contribute significantly to job creation with
analysis projecting 12,000 to 18,000 additional jobs
by 2017.
A strong partnership approach is vital to achieving the
goals set out in this business plan.
Through the Strategic Forum1, the Economy Board
and the Community planning National group we
are seeking to align our collective efforts to deliver
greater impact. By working closely with Local
Authorities, and as active members of Community
planning partnerships, we will help to progress Single
Outcome Agreements and support the development
of local and regional economic strategies to bring
new investment, new jobs and new opportunities for
communities throughout Scotland.
Equal opportunities
There is a strong business case for embedding
equality into the work of Scottish Enterprise. We
are committed to realising Scotland’s full economic
potential by embedding equal opportunities across
our wider policies and practices as an employer
and service provider. We are also encouraging the
companies we work with to embrace the equality
agenda, recognising that it makes good business
sense.
We are already making a strong contribution to
economic development planning and delivery with our
partners across Scotland. This includes our support
for bodies such as glasgow Economic Leadership,
Ayrshire Economic partnership, South of Scotland
Alliance, Aberdeen City and Shire Economic Future
and others across Scotland. We know that a strong
partnership focus can deliver transformational
projects, such as the Dundee Waterfront, Fife Energy
park and Edinburgh Bioquarter and we will be
maximising these partnerships to their fullest extent
in the coming years.
We are further guided by strong legislative drivers and
will continue to apply our successful equality impact
assessment methodology to all projects and policies.
This, along with activities outlined in our new Equality
Strategy, will help us to demonstrate that we have
eliminated discrimination, promoted equality and
fostered good relations between the different groups
that we employ and serve.
Through Industry Leadership groups and Regional
Advisory Boards, we are able to engage directly
with the private sector and get input from over 400
individuals and organisations across Scotland to help
us tackle strategic priorities and help develop and
deliver industry strategies.
Improving our operations
We have made great strides in recent years to look
at our structures, streamline our operations and
generate efficiencies, and this has allowed us to
put more resources into frontline delivery. We will
improve our professional development and build our
evidence base to add more value to our engagement
with customers and stakeholders. For example, we
will support our account managers to build deeper
relationships with companies, helping them to achieve
growth at scale, particularly in international markets.
Internationally, 680 members of the globalScot
community continue to work with us to promote
Scotland overseas, bringing expertise and
opportunities for Scottish businesses. This Team
Scotland approach will ensure that we can make the
biggest difference to the competitiveness of Scotland
with the resources we have available.
We also aim to exploit the full value of the increased
investment we have made in recent years to expand
our field offices overseas and embed an international
mindset across the organisation, to ensure we can
target the huge opportunities that exist for Scotland
in key growth markets such as China and India, Africa
and the Americas.
Evidence of impact
The activities and priorities set out in our business
plan continue to be based on the evidence we have
gathered about the effectiveness of our interventions.
This allows us to measure the potential and actual
1. Scottish government, Scottish Enterprise, Highlands and Islands Enterprise, Skills Development Scotland,
VisitScotland and Scottish Funding Council.
5
Scottish Enterprise: Business Plan 2013~2016
GLOBALLY COMPETITIVE COMPANIES
To help drive sustainable economic growth and create and sustain new jobs,
we work with Scottish companies to raise their ambition and productivity,
invest more in high value innovation and plot their route into global markets.
The critical importance of high growth companies
Scotland’s Business Landscape
Evidence shows that ambitious high growth
companies hold the key to job creation and wider
prosperity in Scotland. It is this group of companies
that we focus on, because their success will drive the
growth that can transform the economy. We will work
more intensively with companies with the ambition to
grow internationally and to achieve significant scale,
targeting those that will make the biggest difference
to Scotland’s economic performance, both in the
short term and in the future.
SE’s Focus
Growth Companies
825
2,700
2,250 companies with
250+ employees
growth Firms
5,219
14,000 SMEs
with turnover £1m+
Exports
4,682 companies
selling 50%+ outside
Scotland and overseas
102,275 firms with employees
239,080 self-employed
(businesses with no employees)
Business start-up
15,000 start-ups
55 high-growth start-ups
341,360 businesses in Scotland
We know from evaluation evidence that our approach
is working. Our portfolio of around 2,000 account
managed companies (where each company has
a dedicated relationship manager) is performing
better than the wider Scottish business base. These
companies employ around 300,000, including 2,000
modern apprentices. We also know that the package
of direct support we provide to these companies
yields high returns on investment. Through our
focus on issues such as leadership development,
innovation, export development and access to finance,
we help companies to plan for long term strategies
for success in global markets.
(339,110 with 250 employees or less)
What we will deliver during 2013-2014
We will continue to target our support to companies
at all stages of growth, from start-ups with the
potential to become the next generation of high
growth entrepreneurial firms, to larger companies
which are important to the local economy or a
particular sector. We will also target companies that
are ambitious to achieve higher rates of growth as a
distinct segment of our evolving account managed
company portfolio, reflecting the additional benefits
that such firms bring to the economy in terms of jobs
and prosperity.
.
6
•
We will secure a substantial increase in activity
by account-managed companies to achieve
significant turnover growth of up to £1.3 billion,
particularly in international markets. This will
help to boost the growth of sectors like oil and
gas, food and drink and engineering. We will
also co-ordinate our investment, innovation and
company growth support in the areas where
Scotland has global competitive advantage, as
well as in sectors with significant opportunities,
such as renewables, life sciences and the digital
technology elements of the creative industries.
•
We will ensure a single contact point to help
every company access the best source of support,
regardless of location or sector. This service will
be enhanced with the launch of the Business
portal for Scotland. This will make it easier for
businesses to find information about the range
of support available from government and
the public sector in one place. The portal will
pull information from the websites of Scottish
Scottish Enterprise: Business Plan 2013~2016
Enterprise, Business gateway, Highlands and
Islands Enterprise and Skills Development
Scotland, meaning businesses don’t have to spend
time navigating around individual organisations’
websites to find what they’re looking for. The
portal also supports the Scottish government’s
drive to deliver more services online, where it
makes sense to do so.
During 2013 – 2014, we will
•
deliver two further rounds of the Scottish EDgE
(Encouraging Dynamic growth Entrepreneurs)
competition to provide funding and support for up
to 30 entrepreneurial companies to realise their
growth potential.
Our focus during 2013-2016
Customer feedback shows that we add considerable
value through the connections we make and the
intelligence we can provide. We will help to identify
and develop new business opportunities, particularly
overseas where we broker valuable business
relationships through our events, our network of
international offices, and through our links to national
and global business networks such as globalScot.
We know that the process through which firms
achieve high growth is complex. Key events or
changes within a company often act as a trigger
point to go through a period of rapid growth. This can
include a change in ownership, an innovation or a
major new product, the injection of new investment,
major new orders, or a shift into new markets,
particularly overseas.
Underpinning our approach is the need to add value to
the businesses we work with, helping to drive customer
focus and build leadership capabilities. The majority
of growth companies we target are small to medium
sized enterprises and many are at early stages of
development, a point where external support can be
particularly effective.
These are all areas where we have a successful track
record of working closely with Scottish companies
to exploit. As a result, our focus over the next three
years will be:
Improving entrepreneurship
Within a global marketplace where competitive
advantage is realised through innovative products,
processes and business models, fostering an
entrepreneurial and ambitious culture is essential
for Scotland to thrive. We require more people with
an entrepreneurial mindset and ambition, with an
appetite for risk, who can create and grow companies
of international scale.
As part of our more focused approach to supporting
growth companies, we need to address the challenges
of building Scotland’s enterprise culture. Working
with the Scottish government and alongside our
partners in local authorities, Business gateway
and in our universities and colleges, we will seek to
create an environment which nurtures and supports
the development of entrepreneurs. This applies both
to supporting individuals and business start-ups to
grow, as well as to improving entrepreneurial thinking
and ambition within existing companies.
7
•
Leadership, tailoring our offer to high growth
firms and recognising the role leadership and
organisational development can have in driving
positive change.
•
More market-led innovation, where there are
clearer routes to global markets and in response
to sector opportunities.
•
Improved access to finance for Scottish
companies, increasing the supply of investment
finance and doing more to help companies unlock
funding.
•
Increased international trade and investment
in global markets where Scottish sectors and
companies have greatest opportunities to export
and attract investment and jobs to Scotland.
•
Using business efficiency as a platform for
building competitiveness and growth, helping
to deliver Scotland’s low carbon opportunities,
for example through the Scottish Manufacturing
Advisory Service and the business support
delivered by our team of sustainability specialists.
•
Increased exploitation of digital technologies to
improve innovation, growth and competitiveness
in partnership with Scottish government,
Highlands and Islands Enterprise and Business
gateway.
Scottish Enterprise: Business Plan 2013~2016
•
Greater access and awareness of the support
we provide in partnership with Business gateway
and Highlands and Islands Enterprise and
through our work with business organisations
and industry groups.
During 2013 – 2014, we will
•
Establishing a mindset of ambition and
entrepreneurial behaviour in an organisation often
requires a change in organisational culture. This can
be a challenging and long term process and a focus
on leadership is not enough in itself.
Our support in these areas is explored in greater
detail in the next sections.
Leadership and organisational development
Our work in this area is underpinned by encouraging
business leaders to be open to reviewing their
organisational structure, developing the skills of
their staff, and ultimately improving their business
competitiveness.
Dynamic leadership is a key characteristic of
ambitious, high performing companies, from
high growth start-ups to more established
firms. Leadership and ambition are important
drivers of business growth as they stimulate
internationalisation, talent management and
innovation. Successful leaders are also open minded
to new opportunities. They are proactive, willing to
take risks and provide staff with autonomy, building
their confidence to respond to opportunities and
challenges.
We plan to target our leadership offer at highpotential growth firms in line with our approach
to developing high impact globally competitive
companies, recognising the role that improved
leadership has in instigating positive change in the
Scottish economy.
In order to increase our leadership offering to
Scottish companies over the next three years, we will:
•
support more new companies with significant
growth potential through our intensive support
programmes such as Leadership for growth and
Developing International Strategy.
•
deliver our Leadership Essentials programme
to give companies at an earlier stage of growth
access to leadership training and advice.
•
extend our traditional marketing channels to
include social media and encourage companies
to access our on-line Leadership Lab tool with its
case studies, videos and podcasts.
•
deliver a wider package of tailored activities
including a customised leadership learning
journey, specialist master classes and
international executive education.
help 250-350 account managed companies
develop their leadership and strategy.
•
We will continue to deliver management
development support to maximise the potential
of key managers and encourage the progression
of organisational culture and communication
through effective employee engagement and good
job design.
•
We will further design bespoke and wide
ranging interventions to tackle key issues such
as succession planning, provide executive
development, coaching solutions and advice
on implementing an effective performance
management system.
We recognise that bringing about major change
requires close collaboration with our partners in the
public and private sectors and we do this through
Scotland’s Framework for Action for Ambition and
Leadership which brings together key public partners
to coordinate activity and awareness-raising. To
illustrate our commitment to partnership in this
area, we are working with others including our
subsidiary body, Investors in people Scotland to find
ways to encourage and harness the ideas, skills and
enthusiasm of people within business to help achieve
their goals.
8
Scottish Enterprise: Business Plan 2013~2016
Brodie Engineering
Kilmarnock based Brodie Engineering Ltd
provides innovative design, installation
and general repair solutions to both main
and light railway sectors. Since 2009,
the company has grown rapidly, but this
growth has presented the management
team with a number of challenges and
has put pressure on their site and its
ability to support the business expansion.
Along with site sourcing introductions
and an RSA grant, we have supported
a strategic review of leadership and
management to support the ongoing
business expansion. With a focus on
company growth and development, this
review entailed a series of group and
individual reviews alongside profiling of
the company and roles within it.
“We saw immediate
positive impacts
resulting from
the Leadership
Development activity.
We know that the
company needs to
continue to develop and
change in order to keep
growing as part of its
business strategy.
The support from
SE has helped me to
adopt an increasingly
strategic role; building
my senior team and
their skills and roles;
as well as helping me
to create the time and
space to do this.”
Identifying what the MD and his senior
team needed to do differently or better,
was key to freeing up the MD and allowing
him to be less hands-on. Substantial
development support was provided
by us during this period consisting of
intensive coaching support for the MD,
coaching support for key managers,
support to improve the effectiveness of
the management team and bespoke
management development support.
The benefits of this work and planning
became apparent very quickly with the
result that the MD is now much more
strategic and less operational. A further
development opportunity has been the
MD joining our Leadership for growth
programme and one member of the
management team has recently been
put forward for the Emerging Leadership
programme.
Gerry Hilferty, MD, Brodie Engineering Ltd
Photograph: Brian Connell, Production Director, Brodie Engineering Ltd.
9
Scottish Enterprise: Business Plan 2013~2016
Innovation
Innovation Centres in Scotland, to improve links
and knowledge exchange between universities and
businesses, particularly SMEs.
Innovative companies and sectors are key drivers
of productivity and competitiveness. By improving
Scotland’s innovation performance, we can make a
considerable difference to the long term growth of
our economy.
Our Team Scotland approach also focuses on
maximising the potential offered by the current
programmes supported by the European Union,
Technology Strategy Board and the planned Horizon
2020 programme which will commence in 2014.
An important element of this work will be to make
more of the key assets and strengths we have in
our universities, in order to boost the innovative
performance of companies in Scotland.
Whilst we have key assets and strengths in
our universities (Scottish Higher Education
R&D expenditure is well above UK average),
Scotland’s investment in business innovation
and entrepreneurship activity lags behind other
small Northern EU regions. For instance, to reach
the top quartile of EU economies, we need 5,000
more Scottish companies to be active in terms of
innovation, developing new products, new processes
and new ways of doing business.
We know from evaluation that returns from our
mainstream innovation support are significant. In
order to achieve even more, however, we need to
align our activities with those of our partners in order
to help companies generate stronger revenues from
their investments in innovation. In doing so, we can
help companies to improve competitiveness, achieve
success in international markets and increase
growth.
Our approach to company innovation is well
developed through our Innovation Support, SMART
and R&D grant programmes. We also provide
specialist support in areas such as life sciences,
renewable energy, oil and gas, engineering and
food and drink, reflecting the different innovation
requirements across our sectors.
Scotland is now an active participant in the European
Commission’s Smart Specialisation platform which
is driving excellence and specialisation in regional
innovation. As a result of our participation in this,
there will be a refresh of the Scottish Innovation
Strategy.
•
We are supporting the Technology and Innovation
Centre at the University of Strathclyde to
encourage engagement between business and
academia. This will become a hub for technology
development in the energy and enabling
technologies sectors, and is scheduled to be
operational by June 2014. The Centre will house
the City Observatory, as part of glasgow’s City of
the Future initiative to demonstrate how providing
new integrated services using new technologies
across health, transport, energy and public safety,
can improve the local economy and increase the
quality of life of glasgow’s citizens.
•
Our support will help accelerate the
commercialisation of products and processes
with a strong market opportunity, to help grow
new companies of scale. We will also encourage
more collaboration between businesses to
facilitate significant investments in R&D,
targeting opportunities in global markets.
We are also exploring how we can better utilise high
levels of public procurement from bodies such as
the NHS, to help stimulate more demand-driven
company development. Through our key partnerships
with other government agencies, we can help
business to develop new products and services that
can reach domestic and global markets.
We will take forward a number of actions to boost
Scotland’s innovation performance. This includes
a more collaborative approach to better align
activity in knowledge transfer, innovation and
commercialisation, which is already underway in
conjunction with the Scottish Funding Council, the
Scottish government and Highlands and Islands
Enterprise. This will see the development of sector
10
Scottish Enterprise: Business Plan 2013~2016
Integrated Magnetic Systems
We have supported Dundee based
biotech company, Integrated Magnetic
Systems (IMS), since its inception,
helping to build understanding of
the market and commercialise its
innovative work in magnetic proteins.
After reviewing the team’s initial
funding and product roll-out plans, we
identified an opportunity to modify the
technology development programme
to bring products to market earlier,
changing the investment profile to
a realistic and achievable level. A
SMART: Scotland award allowed IMS
to speed up its R&D programme and
bring forward the launch date of its
first commercial product.
An investment of £1 million by a
Scottish biotech investment group,
Biolink has helped IMS to move
forward in leaps and bounds with the
development of its magnetic proteins.
IMS is also in discussion with several
potential customers, following trips
overseas to meet and engage with our
networks, via Scottish Development
International (SDI).
“SE provided us with the matched funding that
enabled us to attend conferences, meet important
industry contacts and arrange introductions with
the people who became our main investors. We
wouldn’t have been able to progress as quickly or as
successfully without the advice and funding provided
by SE.” Dr Jamie Love, Chief Operations Officer, IMS
Photograph: Dr Eddie Blair, Chief Executive Officer, IMS
11
Scottish Enterprise: Business Plan 2013~2016
During 2013 – 2014, we will
Access to finance
•
As a consequence of the global financial crisis, there
have been significant changes in the scale and nature
of the funding markets, particularly for small and
medium sized companies (SMEs) with growth and
export potential. Borrowing levels for companies
continue to contract as firms seek to reduce debt
while waiting for better or more certain trading
conditions.
help companies achieve significant additional
revenues from innovation, worth up to £100
million over the next three years and secure up to
£150 million of additional commitments in R&D
investment through SE-assisted projects.
By 2015, we will
•
support 15 to 21 entrepreneurial companies
capable of achieving £5 million turnover growth
within five years of trading, or attracting £10
million investment.
As a result, we know companies are putting off
investment decisions and delaying projects and
unless this is addressed, it could hold back Scotland’s
long term economic recovery.
We will look at new ways to unlock demand for
finance by Scottish companies and work with banks
and other investment partners to increase the range
of finance available. Key to this will be ensuring
Scottish businesses are aware of the funding options
available from Scottish Enterprise as well as clear
signposting to information on other lending options.
This will include a series of joint events with banks,
focussed on topics of greatest importance to realising
Scotland’s economic potential.
The digital economy
growth in the digital economy has the potential to
make a significant impact on improving Scotland’s
innovation performance. Our focus is on helping
companies to exploit digital technologies to help
them develop new products and reach more
customers in new international markets.
We will also deliver new activity as part of our
contribution to Scotland’s Digital Future Strategy,
including demonstration projects in sectors and
a new Digital Excellence programme involving
our account-managed companies. The Digital
Future strategy recognises the potential that
digital technologies have to transform markets and
businesses, across all sectors of the economy. We
will increase our collaborative work with our partners
to help achieve the ambition of Scotland becoming a
world-leading digital economy by 2020.
We also need to ensure that companies are ready
to seek investment. We understand that the levels
of ‘financial literacy’ which companies are required
to display are higher than ever before, as are the
responsibilities of due diligence and compliance.
This will require increased access to comprehensive
financial expertise for more companies in order to
stimulate and fulfil untapped demand for funding for
growth.
Through the Scottish Investment Bank, we will tailor
products to realise significant sector opportunities,
supporting both early stage and established
companies with growth potential and SMEs that
are focused on international markets. An important
role for the Scottish Investment Bank is to improve
the functioning of the Scottish risk capital market,
working with banks, business angels and global
venture capitalists to help early stage companies to
achieve their high growth potential.
12
Scottish Enterprise: Business Plan 2013~2016
International trade
We have established, in partnership with the Scottish
government, the Scottish plastics Loan Fund and the
Renewable Energy Investment Fund (REIF). Designed
to complement existing public and private sector
finance schemes currently available in Scotland, REIF
provides innovative interventions tailored to individual
project requirements. It is expected to significantly
accelerate access to finance for key projects in
the renewables sector that have demonstrable
funding gaps. These complement the suite of more
established funds such as the Scottish Seed Fund,
the Scottish Co-Investment Fund, the Scottish
Venture Fund and the Scottish Loan Fund.
The importance of international markets has never
been more important for Scotland’s future economic
success.
Changes in global trading and investment patterns
means there are vast opportunities for Scottish
companies to grow their business but we need to
act quickly as we know many of our competitors are
chasing the same opportunities.
While Scottish Development International (SDI)
continues to be on the frontline in delivering support
to Scottish companies overseas, we are committed
to embedding an international mindset across our
entire organisation.
During 2013 – 2014, we will
•
•
Deliver specialist Financial Readiness support
to up to 400 companies to improve their
attractiveness to potential investors and lenders,
as well as specialist support for export finance.
This will help us to ensure that we deliver a seamless
approach to helping Scottish companies and sectors
identify the substantial opportunities that global
markets still present.
participate in new specialist funding sources
to unlock funding for companies in key sectors.
This will include the Scottish Life Sciences Fund
managed by Rock Spring Ventures.
•
Develop a single, searchable source of finance
for companies, which will form part of the new
Scottish Business portal.
•
Maximise leverage from new and untapped
sources of investment into Scottish projects,
such as the green Investment Bank.
From our staff based around the world, we are able
to gather real-time and in-depth market intelligence
about the evolving and changing conditions in specific
overseas markets. By exploiting this intelligence, we
can help to identify opportunities early and support
our companies and sectors to respond.
We also recognise that we need to do more to build
the capacity of Scottish companies to operate in
international markets. This includes the important
task of increasing the number of Scottish companies
becoming new exporters.
We will continue to target the markets that have
the greatest opportunities for Scottish companies
and sectors, responding to changes in markets and
the emergence of new opportunities in different
geographical areas. For different sectors (and subsectors) and different companies, we recognise
the need for flexibility and innovation and we aim
to develop a bespoke approach for each company,
reflecting the unique nature of the opportunities and
the capacity and capability of the company.
13
Scottish Enterprise: Business Plan 2013~2016
Despite challenges within the Eurozone, Europe still
offers significant and growing export opportunities
in a wide range of markets for Scotland. It continues
to be the main export market for Scottish companies
and a key market for new exporters. The faster
growth in emerging and maturing Asian, South
American and Middle East countries, alongside
steady growth forecast for North America, also offer
a diverse set of export opportunities for Scottish
companies, particularly for those already exporting
and looking for further growth. However, each of
these markets requires a different approach and
specificity is important for success.
and in-market intelligence, to providing access to
international networks and on the ground support
from our overseas field offices. We have expanded
the presence of our overseas field offices in key
geographies and will continue this process in 2013.
We will work with Scotland’s Industry Leadership
Groups to help turn their positive sector export
growth ambitions into reality through individual
Export Action Plans for each sector. Through
these, we will help develop an industry approach
to increasing exports, including both company
level support and industry-wide initiatives, working
with partners to build leadership capabilities and
overcome barriers to exporting such as innovation
and access to finance.
We will provide a range of support to companies,
from identifying new markets through international
strategy development, sales and marketing skills
Calgary •
San Jose §
Stavanger
• Copenhagen
•
Glasgow (HQ) •
• Moscow
London • ••Düsseldorf
Paris • Brussels
Toronto
• § Boston
Chicago •
• New York
§ Houston
West Africa w
Seoul
Beijing • •
• Tokyo
New Delhi
• Shanghai
Dubai •
Shenzhen •• • Taipei
Middle East w •
Mumbai • •
Hong Kong
Hyderabad
• Singapore
•
Rio de Janeiro
• Sydney
• SDI overseas offices or locations with representation
¡ Serviced SDI offices for rent
® Proposed SDI office locations
14
Scottish Enterprise: Business Plan 2013~2016
Cocoa Black
Cocoa Black, based in the Scottish
Borders, manufactures and retails a
range of luxury handmade chocolate,
cakes and patisserie. The company
also operates a school which
provides instruction in chocolate
making and baking, from beginners
to professional chefs.
The company was considering the
complexities of exporting and asked
us for support. We quickly saw that
the business had huge international
potential and identified opportunities
for their niche chocolate products.
There was also a recognition that the
company needed to be very selective
about which international markets
to target.
With our support, Cocoa Black
undertook an International Strategy
Workshop to identify business
expectations around exporting
and what the potential risks might
be. Our research also helped to
determine what the key criteria
should be for evaluating potential
overseas markets and where the
business would stand the best
possible chance of export success.
Having agreed an international
strategy, Cocoa Black is now actively
working to deliver it. Much work is
also going on behind the scenes to
ensure that the business can grow
to meet overseas demand,
for instance, ensuring that all
manufacturing processes are as
efficient as possible.
“SE has given us the opportunity to adopt a structured approach to
market selection and has also uncovered commercial opportunities which
would otherwise have been missed. There remains a lot of work to be
done, but SE’s intervention has certainly allowed us to develop this aspect
of the business with much greater confidence”. Ruth Hinks, Owner/MD, Cocoa Black
15
Scottish Enterprise: Business Plan 2013~2016
During 2013 – 2014, we will
•
Undertake significant trade promotion activities
to drive export growth in oil and gas, with a
particular focus on new markets, in Norway,
Brazil, Canada and West Africa.
•
Initiate agreed actions with industry partners
in the food and drink sector to deliver the step
change needed in international export growth.
This will deepen the impact of the Asia food and
drink strategy as well as our strategies in the
Americas, Europe and the Middle-East.
•
Develop growth in exports through e-commerce
to capitalise on global opportunities in Digital
Connectivity.
•
We have established a very strong track record in
attracting foreign direct investment, maintaining
a consistently strong performance in comparison
with other parts of the UK and the EU. We have
maintained this position even in the very tough
investment climate of recent years, with many global
and multi-national companies delaying investment
decisions as they look to strengthen balance sheets.
There remain, however, significant opportunities for
further expansion and new investment and we know
that our specific skills, research excellence, natural
assets and value for money are crucial in winning
inward investment projects.
To stimulate investment, we continue to develop a
world class approach to sales and marketing with
specific propositions which are developed, based
on demonstrable Scottish competitive advantage.
In the face of highly competitive and shifting global
markets, we will take a more strategic approach
to attracting new investment, encouraging those
investors already operating in Scotland to consolidate
and expand their business while encouraging new
investments. In order to achieve this, a number of
steps will be taken:
Support up to 330 companies projecting turnover
growth from exporting, including between 150 and
210 projecting significant turnover growth of more
than £1million.
By 2015, we will
•
•
Support up to 10,000 companies to develop their
capacity for exporting through initiatives like
Smart Exporter. We will work more intensely with
those new exporters who have the most export
potential (that is, £500,000 of export sales).
•
We will maintain a long term approach to
relationship building with existing and prospective
investors and customers based on future
prospects, even if it does not bear short term
returns.
•
We will focus on aftercare to maximise new
investment and employment opportunities
by further developing and deploying our high
performance account team approach across the
business.
•
We will use intelligence from foreign investors
to inform where Scotland can improve its
proposition and positively influence partners to
make Scotland more competitive.
Achieve an increase of up to £1.7 billion in
international sales from supported businesses.
In delivering this activity, we will also contribute
meaningfully to the government’s International Trade
and Investment Strategy and its target to deliver a
50% increase in international exports by 2017.
Inward investment
Inward investment is a major component of economic
growth. Inward investors account for over a third of
Scottish private sector employment and turnover and
this has risen over the last ten years. Foreign direct
investment also contributes to government growth
objectives including: increased exports; regional
equity; access to finance; and connectivity. Foreign
owned companies also carry out 60% of Scottish
business research and development.
16
Scottish Enterprise: Business Plan 2013~2016
Business efficiency as a platform for growth
To win investment, Scotland has to be more
competitive than other locations globally and this
needs to be based on a deep understanding of our
assets and sector strengths and how we compare to
others. However, if Scotland is to continue to perform
well, we also need to remain innovative in our
approach to winning new inward investment projects.
Through our company growth activity, we help
companies to become more competitive by increasing
their resource efficiency.
Efficient management and reduction of energy,
water and raw materials, makes good business
sense because it saves bottom-line costs, boosts
productivity and competitiveness as well as
conserving the environment. Over the next three
years, we will continue to encourage more firms to be
even more ambitious in their efforts to manage and
reduce their resource inputs, working in partnership
with Resource Efficient Scotland.
The primary focus of our efforts will be to deliver
strategic investments which build the long term
competitiveness of our growth sectors such as
offshore renewable energy and life sciences. This will
be delivered in a way which ensures that shorter term
economic gains are optimised including jobs, capital
investment and regional equity whilst simultaneously
developing longer term strengths. We will seek to
maximise the economic potential of foreign direct
investment and our focus will be on building supply
chains to allow sectors to compete and grow.
Our focus on business efficiency is delivered through
two routes:
• The Scottish Manufacturing Advisory Service
(SMAS) provides expert advice, one-to-one
support, training and events for manufacturing
businesses of all sizes throughout Scotland.
The practitioner team consists entirely of
hands-on experts in process improvement, lean
manufacturing, innovation and allied disciplines.
The starting point for companies is the free
manufacturing review which will identify ways to
improve the productivity and competitiveness of a
business.
At the heart of our success is collaboration with
others. We are working closely with the Scottish
government and Highlands and Islands Enterprise
(HIE) to optimise the contributions of partners and
other stakeholders such as UK Trade and Investment.
We are bolstering our presence in international
growth markets and are making greater use of
prominent Scottish companies and individuals,
including the globalScot network to further enhance
the perception of Scotland as a prime business and
investment location.
•
We are also working with partners in industry, our
cities and the wider public sector to strengthen the
underlying competitiveness of Scotland to make it
more attractive for investors to locate and expand.
This has occurred through developments in, for
example, port infrastructure, engineering skills and
high speed broadband. As part of the preparation
of Scotland’s strategic framework for international
air connectivity, we will also work with partners to
attract direct air routes that will encourage further
international trade and investment.
By 2016, we will
•
By 2015, we aim to
•
Our team of sustainability specialists uses its
expertise to deliver bespoke advice to companies
in the areas of energy use, waste reduction, water
utilisation and renewable energy technologies.
Their advice helps Scottish companies achieve
sustainable growth by reducing costs, improving
productivity while minimising their impact on the
environment.
support delivery of up to 35,000 planned jobs
through the attraction of foreign investment, of
which up to 12,000 are planned high value jobs.
17
help companies to generate significant
productivity and efficiency improvements, worth
at least £70 million to £85million.
Scottish Enterprise: Business Plan 2013~2016
Mainetti
Mainetti is a multinational garment
hanger company which manufactures
and recycles hangers for dispatch to
a number of well known high street
customers. The company’s Jedburgh
site focuses on manufacturing and
currently employs around 185 staff.
As part of Mainetti’s ‘plan M’ policy,
the company constantly looks at new
ways to increase productivity and
reduce resource use. One of the main
ways it does this is by recycling and
remanufacturing old hangers back into
productive use. The SMAS team has
been working with Mainetti, helping
to develop optimum site layouts and
training employees in lean tools and
techniques.
In order to reduce production costs
and CO2 emissions, Mainetti has
also recently been working with our
sustainability specialists to review
current energy consumption and
identify opportunities to make use of
renewable resources.
The company’s commitment to
sustainability was acknowledged
at the 2012 VIBES Awards where
they were announced as winners
of the management category. This
award recognises businesses
whose management systems
deliver continuous improvement in
environmental performance.
“SE support has added considerable value to our “Plan M” process
of sustainability and continuous improvement. It has helped to
improve our productivity by adding structure and lean principles
into the culture of the organisation. This has also highlighted the
need for leadership and management training for line leader.”
Graham Wilson, Production Director, Mainetti UK
18
Scottish Enterprise: Business Plan 2013~2016
GLOBALLY COMPETITIVE SECTORS
In responding to the challenges and opportunities of the current economic
climate, we are working with industry to engineer a transformation in
Scotland’s competitiveness and performance, facilitating change within our
sectors and addressing opportunities for Scotland in global markets.
The government Economic Strategy identifies the
sectors which offer particular opportunities for
growth due to existing comparative advantages, or
through the potential to capitalise on Scotland’s
unique natural assets and world class infrastructure.
In addition, the government Economic Strategy
recognises the importance of Scotland’s technology
and engineering capabilities and their importance
in underpinning the supply chain for other growth
sectors.
We know that our growth sectors contribute in
different ways to Scotland’s short and longer term
economic performance and that the drivers of
productivity vary across them. We are also aware that
significant future growth will come from exploiting
the capabilities which lie between our growth sectors
and as such, our input will be tailored to where we
can add the most value and impact.
We are also continuing to develop our understanding
of new opportunities emerging across sectors,
such as big data, industrial biotech, enhanced
health, premium and provenance, and high-value
manufacturing. For instance, analysis of Scotland’s
energy cluster shows the highly inter-connected
nature of the sector with linkages between oil and
gas, advanced engineering, data management,
renewables and chemical sciences. This highlights
opportunities for new growth in international
markets, building on expertise that has been
developed in the North Sea and by firms involved in
the reduction of locally sourced hydrocarbons in the
chemicals industry.
Together, growth sectors account for a significant
and increasing proportion of Scotland’s economy,
responsible for around 45% of our gross Value Added
and around 30% of employment.
•
Established sectors such as oil and gas, food
and drink, financial services and engineering
are trading successfully in global markets, are
significant employers and are driving Scottish
productivity and export growth.
•
Emerging sectors such as life sciences, offshore
renewables and digital media (within creative
industries) have the potential to accelerate new
growth and to scale up in order to secure an
international market position.
•
The digital economy is also becoming a major driver
of sector growth, likely to be crucial in Scotland’s
future competitiveness in areas such as data
analytics. It underpins important areas such as
innovation, export growth and the transition to a low
carbon economy, both for companies and sectors.
Meanwhile, sectors such as tourism and
construction are important contributors to
employment and to the vibrancy of the business
environment in Scotland.
19
Scottish Enterprise: Business Plan 2013~2016
Our sector delivery, 2013-2016
Our work with sectors is led by Industry Leadership
Groups, made up of senior figures from industry,
the public sector and academia. These groups
have a crucial role in shaping Scotland’s economic
ambitions, leading the development of sector
strategies and highlighting where Scotland has
niche strengths in global markets. In responding
to these strategies, Scottish Enterprise produces
delivery plans which set out the range of activities
we undertake alongside partners to help deliver the
sector opportunities.
What we will deliver across our sectors, during
2013-2016.
Oil and Gas
Oil and gas remains one of our most important
economic sectors and we have world class
capabilities and existing competitive advantage in
areas such as: subsea, safety and asset integrity.
The industry’s skills and capabilities also offer the
unique potential to diversify, transferring skills and
knowledge to other related industrial sectors such as
offshore renewables and carbon capture and storage.
A key concern for all Industry Leadership groups
is the need to improve skills and develop a strong
workforce across our sectors. In response,
Skills Development Scotland (SDS) is leading the
development of Skills Investment plans and Skills
Action plans. We are supporting our colleagues in
SDS and other bodies in this work to ensure that
Scotland’s skills support system contributes to the
achievement of our shared ambition for sectors,
and that people in all areas can benefit from the
job opportunities resulting from sector growth.
We are also working with SDS to ensure effective
integration between the national web-based service
for employers – Our Skillsforce – and the business
support provided through the new Scottish
Business portal.
Through the new Oil and gas Strategy 2012-2020,
the strategic focus of the Scottish Oil and gas
Industry Leadership group is on maximising resource
recovery. It aims to do this by accelerating and
increasing industry-led innovation and building the
Scottish supply chain (to £30 billion by 2020) both
domestically and internationally.
Enhanced levels of recovery will require new
technology development and we will therefore
increase the level of company-based support for
sector innovation and R&D activity, working with
partners to issue a series of innovation calls for
technology priorities including asset integrity, subsea
and imaging.
Scotland also needs to be a globally competitive
location for international talent which can bring
a global perspective along with niche technical,
commercial and management expertise. Our
TalentScotland project will continue to ensure that
Scotland is promoted internationally as a career
destination of choice. It will work closely with our
industry teams, employers and partners to help
identify and address the key skill shortages impacting
company growth.
As part of our efforts to support development of the
supply chain, we will recruit a further 100 oil and gas
companies to our account managed portfolio over
the next three years. We will also develop deeper
relationships with a number of larger companies.
It is estimated that oil and gas will play a crucial
role in helping to meet the Scottish government’s
target of a 50% increase in exports by 2017. We will
continue to support those companies that are already
operating internationally and encourage others
to internationalise. We will also look at new and
existing inward investment opportunities, working
with the Scottish based management teams and
the headquarter bases of potential investors. This
includes targeting opportunities in new fast-growing
markets, such as West Africa and Brazil, as well as
established markets such as Australia and North
America.
Our sectors will also benefit from our approach to
delivering a more supportive business environment.
For instance, through the Scottish government’s
Enterprise Area policy, there is an emphasis
on some of our most dynamic sectors such as
renewables (at Leith and Dundee port) and life
sciences (at Bioquarter, Biocampus and Irvine),
where there is the greatest potential to create
new employment opportunities, stimulate private
investment and boost economic growth.
.
20
Scottish Enterprise: Business Plan 2013~2016
Food and Drink
Our support is directed towards the acceleration of
strong technical capabilities such as data capture
and informatics and the exploitation of deeper market
penetration in areas such as smart mobility, digital
health and care, the low carbon built environment
and big data, all of which are underpinned by our
strength in digital technologies. Our integrated
approach to enhanced company competitiveness
across the supply chain will bring together direct
company support through account management, the
Scottish Manufacturing Advisory Service and Scottish
Development International. Our support will also be
delivered through sector specific interventions such
as bespoke R&D calls, complementing the activities
of partners such as the Scottish Funding Council
through the new Innovation Centres.
The food and drink industry has an ambitious
agenda for growth, based on opportunities in UK
and international markets where Scotland has real
competitive advantage through our strong premium
brands, a reputation for naturally healthy products
and excellent quality and provenance credentials. By
2017 the industry aims to have a global reputation
as a Land of Food and Drink, to be generating £12.5
billion through exploiting growth markets, with
exports reaching £7.1 billion. The exports target
has just been increased by £2 billion reflecting the
industry’s outstanding performance in premium
overseas markets.
Our role is to continue to work with Scotland Food
and Drink, the industry leadership organisation, and
partners, to fully exploit these opportunities. We will
work with individual food and drink businesses to
help them grow, for example through productivity
improvements and market development. We will
support companies to increase sales in international
markets, focusing on opportunities in North America,
Europe and Asia, helping to build the reputation of
Scotland’s strong brand on the world stage.
Renewable Energy
Scotland has significant offshore wind, wave and
tidal resources. If these can be more fully harnessed,
building on expertise from other sectors such as oil
and gas, there is considerable long term potential for
Scotland to become a major player in global offshore
renewables markets and to create significant and
sustainable long term economic growth.
Our flagship Food and Health Innovation Service will
help businesses develop new products for the rapidly
expanding health and nutrition sector, worth around
£350 billion globally. This will be delivered as part of
an integrated approach to innovation, working with
Scottish Funding Council and other partners.
Our involvement in the routemap to 2014 will also
help companies exploit the opportunities around
the Commonwealth games, Ryder Cup and
Homecoming 2014.
As a key delivery partner in the Renewables
Industry Advisory group, we will help to drive the
implementation of the Routemap for Renewable
Energy in Scotland. Through the Routemap, we
aim to establish competitive advantage for offshore
wind and marine energy industries in Scotland, with
ambitious long term targets for the development and
deployment of offshore technologies.
We will work intensively with growth companies
in the sector, supporting industry innovation
requirements to lower the cost of offshore renewable
energy and helping to access finance. We’ll also
ensure that Scotland’s business infrastructure
is globally competitive and working alongside
industry, we will help to build investor confidence
and understanding of the Scottish supply chains
for both wind and marine energy. Our focus will be
on crucial components and services and helping
companies to internationalise and tap into key market
opportunities.
Technology and Engineering
The technology and engineering sector accounts
for £10 billion of Scotland’s annual gVA and is a
significant contributor to Scotland’s export activity,
with around £5 billion of high quality products and
services exported to global markets each year.
Scotland’s Technology Advisory group now has a
wider remit, covering a diverse range of engineering,
manufacturing and technology companies, acting as
an enabler of the development of a range of other
industry and market sectors.
21
Scottish Enterprise: Business Plan 2013~2016
We will maintain the level of targeted investment and
support in the following crucial areas:
•
Innovation support – we will continue to
identify areas that can accelerate research and
development and deliver the necessary industry
cost savings, for example, we support prototype
development through the funding provided by
the prototype Offshore Wind Energy Renewables
Scotland (pOWERS) Fund. We will continue to
support the Scottish Energy Laboratory and work
with partners to develop further test facilities for
turbines, both on and offshore.
•
Supply chain development - we will continue to
support a globally competitive Scottish supply
chain through the attraction of inward investment
and through support for indigenous companies
to grow and diversify into offshore renewables.
We will also provide support through the
European Offshore Wind Deployment Centre for
manufacturers to demonstrate their turbines. Our
Offshore Wind Expert Support programme will
also help companies build appropriate strategies
to enable them to win business in the offshore
wind sector.
•
•
Project and company finance - getting the
required levels of finance into renewables and
other low carbon technologies such as energy
efficiency and low carbon heat is a key priority.
We will also work alongside partners to help
build a strong pipeline of investor-ready projects,
seeking finance from potential sources such as
the Renewable Energy Investment Fund (REIF)
and the green Investment Bank. REIF can provide
loans, equity investments and guarantees (but
not grant funding) for projects that will either
accelerate the growth of the marine renewable
energy sector in Scotland, increase community
ownership of renewable energy projects, or
provide finance for district heating networks that
utilise renewable heat technologies.
During 2013 – 2014, we aim to
•
secure the first tenants into our Inovo building
to encourage engagement between businesses
and academia, as an important part of the
International Technology and Renewable Energy
Zone (ITREZ) in glasgow.
By 2016, we aim to
Infrastructure development - targeted
investment in infrastructure is needed if Scotland
is to take advantage of the opportunities it has in
offshore renewables. We are investing in strategic
locations and projects, to help unlock barriers to
growth and attract significant private investment,
for example at the ports of Leith and Dundee, as
well as Fife Energy park. Our £70 million National
Renewable Infrastructure Fund will support the
development of strategic supply chain facilities at
targeted locations in Scotland.
•
22
achieve leverage of up to £350 million of
additional private investment into offshore
renewables, including £130 million - £150 million
through REIF.
Scottish Enterprise: Business Plan 2013~2016
Albatern
Based in Midlothian, Albatern’s focus
is on finding a highly efficient, low cost
method of producing electrical power
from waves. These cost savings are
based on the company’s ground-breaking
WaveNET device, a modular wave energy
array system using building blocks
called ‘Squids’. The initial smaller Squid
modules can provide energy for users who
are off the grid, such as salmon farms,
or have only poor grid service in remote
or island communities. The WaveNET
can also be scaled up into larger arrays
- based on 100kW Squid modules - and
could provide up to 10MW of electricity
from one array for mainstream grid
connection.
We have supported the company through
SMART: Scotland awards which have
funded the proof of concept and related
feasibility work on the initial Squid
device which has generated electricity.
This was combined with a founder seed
round matched by the Seed Fund of
the Scottish Investment Bank. Albatern
has also been successful in attracting
WATERS2 grant from us; supporting
significant equity investment from a high
net worth investor. In 2013, this funding
will enable the deployment of the first
WaveNET array at 45kW to demonstrate
performance in stronger waves and
progress low cost marine energy devices
towards commercial application in the
offshore aquaculture market. Here,
Albatern has also been successful in
winning a feasibility study funded jointly
by DECC, DEFRA and BIS UK government
departments.
“SE is helping us to achieve our objective
of developing an economically viable wave
energy system. It has brought us a high degree
of strategic help and focus, supporting our
commercialisation costs and giving us access
to different routes to address the investment
marketplace.” David Campbell, CFO, Albatern
Our High growth Start Up Unit has
also assisted the company in refining
its business plan, in order to get them
in front of prospective investors and
stimulate an accelerated growth path.
Engagement with Scottish Development
International (SDI) and promotion through
its networks has also led to early product
interest from global aquaculture markets
such as Chile. SDI are also supporting
Albatern’s plans to attract skills and
funding to enable the scale up to grid
connected WaveNET array devices.
Photograph: John Findlay, Chief Executive Officer, Albatern
23
Scottish Enterprise: Business Plan 2013~2016
Life Sciences
Tourism
With Scotland’s competitive advantages in areas such
as medical devices, pharmaceutical services, stem
cells and translational medicine, we are focused on
growing the company base in Life Sciences, working
with companies and creating the environment
for growth by, for example, enhancing access to
specialist finance, property and connections. We
are also working on developing a strong pipeline of
investments across Scotland by major companies.
planned investment by three companies alone – gSK,
Life Technologies and Lifescan Scotland – totals £130
million.
With around 13,000 businesses and 185,900
employees, tourism is a key contributor to sustaining
wealth and jobs across both urban and rural Scotland.
It also supports the growth of other sectors such as
food and drink, retail, transport and construction.
Tourism Scotland 2020, the new industry strategy,
aims to drive growth by translating Scotland’s rich
and diverse tourism assets into quality, authentic
visitor experiences at every stage of the customer
journey. The strategic ambition by 2020 is for the
industry to realise its full potential by increasing
overnight visitor spend by at least an additional
£1 billion. The new industry led market-focused
approach aims to generate increased value from
our distinctive tourism assets such as our natural
environment, heritage and destination towns and
cities, increasingly reaching out to new visitors
and tailoring the offer to Scotland’s future tourism
markets.
The sector is driven by innovation within academia,
health and the company base. The strength of the
research base is the foundation for success, and work
with Scottish government and NHS colleagues is
underway to increase the flow of innovative ideas from
the company base to the health service, opening up a
key market.
Supported by our key partners, VisitScotland and
Highlands and Islands Enterprise, our contribution
to growing the tourism industry is focused on
supporting the development of industry leadership
through the Scottish Tourism Alliance and helping to
deliver growth opportunities within the new industry
strategy. Through Tourism Intelligence Scotland, we
will support tourism businesses to understand future
market opportunities and the needs and expectations
of Scotland’s visitors.
Development of the first business space at Edinburgh
Bioquarter is enabling the growth of Scotland’s
newer companies, including i2eye Diagnostics, Fios
genomics and Calcivis and prospects for business
growth will be significantly enhanced by the launch of
a new Scottish-based life sciences fund, managed by
international venture firm, Rock Spring Ventures.
.
Through our continued work in destination
development, we will play a key role in driving a
focussed effort to improve quality and the customer
journey through greater collaboration, improved
networking and project delivery to develop Scotland’s
assets into experiences.
Forthcoming major international events such as
the Ryder Cup in 2014 also provide a focus for our
engagement with those businesses which can help
to build on Scotland’s international reputation as the
Home of golf.
During 2013 – 2014, we will
•
24
launch a new drive to encourage tourism
companies to grow by developing new customer
experiences through increased use of market
intelligence, taking advantage of Scotland’s worldclass tourism assets.
Scottish Enterprise: Business Plan 2013~2016
The Hydro
Our work with the tourism sector
seeks to maximise the economic
return on major infrastructure
investments such as the new Hydro
Arena in glasgow. As part of the
Scottish Exhibition and Conference
Centre (SECC), the Hydro will provide
Scotland with a state of the art 12,000
spectator arena, as well as a purpose
built exhibition centre, conference
centre and auditorium, all on one site.
Very few destinations in Europe can
offer the same quality and mix of
facilities that the expanded SECC
complex will provide. As such, glasgow
will have the ability to compete in
new growing markets, including
international conferences and events,
particularly the ‘mega-conference’
market of more than 5,000 delegates.
The Hydro will greatly enhance
Scotland’s competitiveness in the
business tourism market and will
boost glasgow’s competitiveness as
a leading destination. part funded by
£25 million from us, it will potentially
inject an additional £131 million into
the economy and create over 2,000
jobs. The development will also
contribute to the ongoing regeneration
of the Clyde Waterfront and will
support the Creative Clyde initiative at
pacific Quay, which aims to grow the
digital media and creative industries
sector.
“SE has been a really important partner in the delivery of
the Hydro. Whilst the financial support has been essential,
the SE team is always looking at ways to provide support
beyond the construction phase so that our business plan
delivers. We look forward to a continued relationship
which is focused on success and partnership.” John Sharkey CEO SECC Ltd
25
Scottish Enterprise: Business Plan 2013~2016
Creative Industries
Technology, in particular, plays an increasingly
important role in industry and we will help to
facilitate collaboration between universities and
research institutes, to clarify the sector’s technology
requirements and make more of Scotland’s
capabilities in areas such as data analytics. We will
also work with our partners in the financial sector to
help improve access to finance for growth companies
and exporters.
Our activities in the creative industries remain
focused on the growth areas of digital media, such as
interactive media, software and games, TV production
and publishing where Scotland has significant
international competitive advantage. The digital media
sector generates £3.2 billion of gVA for Scotland
per annum. Our work complements the support
for the wider sector that is provided by our partner
organisation, Creative Scotland.
Universities
Our principal objectives are to: drive company
competitiveness through increased levels of
investment, innovation and support for international
trade and investment, helping to develop Scotland’s
digital media asset base through significant
developments like Creative Clyde in glasgow and
Seabraes Yard in Dundee. We are also seeking
to promote the exploitation of digital and mobile
technology capabilities across other sectors such as
food and drink and tourism.
Scotland’s universities are an important part of our
economy, vital to our economic competitiveness. We
will continue to work closely with higher and further
education institutions to boost the contribution they
make to increase Scotland’s sustainable economic
growth. Our focus includes helping universities and
colleges grow their international revenue streams.
Financial and Business Services
Despite the economic changes that have happened
in recent years, the financial and business services
sectors continue to make a significant contribution of
around £17 billion gVA to Scotland’s economy through
a large and highly productive workforce, including
significant numbers of young people employed.
We play a vital role in supporting the Financial
Services Advisory Board to deliver its vision of a
highly productive industry. We focus on addressing
niche opportunities in finance and business services,
supporting companies with the greatest potential to
grow, building on Scotland’s strengths and capabilities
in areas such as wealth creation and management.
The finance and business sectors are major
contributors to inward investment in Scotland and
make an important contribution of around £3.2 billion
to our export activity. However, with more competition
for increasingly scarce mobile investment, we will
reinforce our efforts to build Scotland’s global
reputation for prudent investment through improved
marketing of our infrastructure, technology, capability
and cost of services.
26
Reflecting the important role that universities and
colleges play as part of the business environment,
we will also be looking at increasing the contribution
that these institutes can make to the growth of the
Scottish economy. This includes the contribution
they can make to Scottish company innovation and
improving the commercialisation of Scottish research.
This is exemplified by our work to support the Scottish
Funding Council-led Innovation Centres, which will
improve links and knowledge exchange between
universities and businesses.
Scottish Enterprise: Business Plan 2013~2016
Rockstar North
Rockstar North, the internationally
recognised video game development
studio based in Edinburgh, has been
awarded a Research and Development
grant from us. The grant of just over
£1 million is a 15% contribution
towards an £8 million R&D project,
and has, to date, created 25 new
high value jobs in the Edinburgh and
Scottish video game sector.
As the largest game development
studio in Scotland, Rockstar North
invests considerably in development
talent and currently employs
approximately 300 people. The R&D
award has supported Rockstar North’s
work on a game engine that is used
by all Rockstar games development
studios worldwide. This project further
cements Rockstar North’s position as
a leader in innovation within the game
development community.
The first title developed by Rockstar
North in 2001, grand Theft Auto III,
was a worldwide breakout success,
and was hailed as a turning point in
the evolution of video games. At the
time of its release in 2008, grand
Theft Auto IV became the biggest
entertainment launch of all time in any
format, selling approximately
6 million units in its first week of sales.
games developed by Rockstar North
currently hold the highest critics’
ratings of all games in the last two
generations of gaming console
hardware. The studio is currently
working on the highly anticipated
grand Theft Auto V.
“By supporting Rockstar North in our ongoing commitment to research
and development, SE is helping to keep the studio and Scotland at the
forefront of games innovation. Rockstar’s future titles will benefit for
years to come.” Leslie Benzies, Head of Rockstar North
Grand Theft Auto V used with kind permission of Rockstar North
27
Scottish Enterprise: Business Plan 2013~2016
Chemical Sciences
Forest and Timber Technologies
Chemical Sciences Scotland’s strategy sets out
the ambitions for this high productivity sector to
boost manufactured exports by 50% by 2020, and
to contribute to the growth of the Scottish economy
over the next 20 years. There are opportunities for
transformational change in the sector, exemplified
in the National plan for Industrial Biotechnology in
Chemicals and related sectors. An important element
of this is to strengthen the dynamic sector hub
located around grangemouth.
Scotland’s Forest and Timber Industries possess
significant growth potential, particularly in areas
such as solid wood products and processing. This
naturally low-carbon sector plays an important role
across construction, renewable energy and tourism,
all of which capitalise on the inherent sustainability
and strengths of timber. The industry vision is to
sustain the current 4% annual growth rate, resulting
in its doubling by 2025. This would add a further
£1.1 billion gVA, and create up to 10,000 new jobs.
Our contribution is focussed on increasing exports
and attracting new international businesses to
Scotland. We are also encouraging innovation within
the sector, for example, increasing competitiveness
by reducing emissions over the product lifecycle, and
by increasing collaboration within the sector.
We will work across the company growth spectrum,
encouraging better and deeper engagement and
developing a stronger pipeline of growing companies.
Through our subsidiary Co-operative Development
Scotland (CDS), we will support the creation of
consortia to help companies achieve scale, using
employee ownership to help sustain companies
within Scotland.
Construction
Construction is another industry that is changing
considerably in the current economic climate. The
refreshed Scottish construction strategy looks to
build an industry which recognises and exploits
its areas of competitive advantage, becoming a
recognised leader and providing solutions in areas
such as the low carbon built environment. It aims,
by 2016, to increase gVA by 10% to £9.62 billion and
increase exports by 10%. The Strategy highlights
the industry as an enabler for other sectors, with
potential to make a significant economic and
environmental contribution to the low carbon
economy.
Textiles
The textiles sector plays a particularly vital role in
the rural economy. The Scottish sector has notable
strengths in technical and traditional textiles
such as cashmere, tweed and tartan and also has
applications in medical and construction markets.
It has proven its resilience despite the economic
downturn, with a sustained focus on export growth,
reflected in a target to increase export sales by 50%
by 2016.
Our focus will be around opportunities to generate
additional industry growth through increased exports,
building on the sector’s reputation and product
strengths.
Our focus will be on improving innovation capability
and applying this across the sector, strengthening
leadership and encouraging collaboration between
companies.
28
Scottish Enterprise: Business Plan 2013~2016
A SUPPORTIVE BUSINESS ENVIRONMENT
Investing in business infrastructure
We have an important role to play in delivering
the Scottish government’s objective of creating a
supportive business environment. We are investing,
alongside others, in the infrastructure and
connectivity needed to attract and retain investment
and talent and to help companies and sectors to
realise opportunities for growth.
Across Scotland, there are particular locations with
strong economic assets in growth sectors, such as
Fife Energy park and grangemouth, that can help
build sector capacity, supply chain opportunities
and connectivity. We have been working closely with
our industry partners - primarily through Scotland’s
Industry Leadership groups - and the public sector
to share our knowledge and understanding of these
growth opportunities. We will also continue to work
with the Scottish government and its agencies, for
instance through initiatives such as Enterprise Areas,
to target capital investment even more closely in
support of economic development priorities.
Capital investment itself creates short term
opportunities. Appropriately focussed, it also lays
the foundation for longer term transformation. With
resources under increasing pressure, we need to
prioritise our capital investments and maximise
private sector leverage, making sure we get the best
economic return. This also entails close partnership
working across the private and public sectors in
the design and delivery of projects to ensure timely
delivery and achievement of identified objectives.
We will use globalScots, inward investors and
our overseas staff to gather intelligence on where
Scotland can emphasise and, where necessary
improve its offer relative to competitor nations.
As part of our commitment to a low carbon economy,
we will ensure that we build our infrastructure
developments to the highest environmental
standards. As well as supporting our existing
company base, it will also help position Scotland as a
low carbon location of choice for inward investment.
Additional priorities for growth
During 2013 – 2014, we aim to
•
Connectivity – we will help to deliver improvements
in Scotland’s connectivity, particularly in terms of
international air routes and helping businesses make
the most of digital and broadband connections.
deliver up to £350 million of additional capital
investment in planned projects supported by us.
Sustaining and growing air connectivity (both direct
and indirect routes) is critical for all sectors to help
access new markets and to improve Scotland’s
overall competiveness. With around 40% of
international passengers travelling to Scotland via
Heathrow and Schipol, our connectivity through these
hubs will remain vital. We are working together with
partners to attract and retain viable international
services that will have the greatest impact on
Scotland’s sustainable economic growth, targeting
particular market areas.
We will continue to invest in business infrastructure
where opportunities are clearly identified in sectors.
For example, through the Creative Clyde programme
in glasgow, our investment will help to build on the
successful regeneration of the riverfront, providing a
vibrant community for creative industries.
29
Scottish Enterprise: Business Plan 2013~2016
Energetica
Energetica is a flagship programme
of activities being taken forward by
the Aberdeen City and Shire Economic
Future (ACSEF), a partnership of local
public agencies, including us, and
private sector companies.
The programme has a long term vision
to help anchor the energy sector in the
area, attracting investment and talent
and creating a global hub. It builds on
the area’s rich oil and gas heritage and
infrastructure, alongside emerging
opportunities for carbon capture and
storage, hydrogen and onshore and
offshore renewable energy.
Through Energetica, partners expect
to see the development of a 30 mile
energy corridor, thriving in a high
quality natural environment and with
critical infrastructure in place which
attracts and connects world class
companies and communities. The area
will also become a leading destination
for innovation, knowledge, learning
and skills in energy generation and
will host the companies, organisations
and research institutions that will
collaborate to meet the world’s energy
challenges.
As a key partner in Energetica, our
role is to help develop a high quality
business environment which can
attract and retain companies operating
across a number of key supply chain
activities. We are also supporting
delivery of projects which encourage
and support cutting edge research,
ensuring that the region becomes
world renowned for advancements in
new technologies.
We estimate that Energetica has the
potential to create hundreds of jobs
and add considerable economic value
to the area. The programme has
already been successful in attracting
£260 million investment in its first
5 years.
30
Scottish Enterprise: Business Plan 2013~2016
Scotland’s Digital Future; A Strategy sets out four
action areas; how information and communication
technology can support public sector delivery, the
digital economy, digital participation and broadband
connectivity. Working with our partners we are raising
awareness and stimulating demand amongst Scottish
based businesses of the opportunities represented by
the digital economy.
Our cities and their regions are home to many of
Scotland’s greatest assets and have the potential to
make a disproportionate contribution to Scotland’s
economic growth. As our contribution to the Agenda
for Cities, we will work with the Scottish Cities
Alliance to identify and develop complementary
city region assets and strengths across our growth
sectors, including links to the cities’ collective
academic research expertise. We will work alongside
others to package our key investment opportunities
in order to attract interest from global investors to
support sector growth.
We will contribute to this agenda in a number of
ways, for instance through our support for growth
companies. Our digital specialists work with
companies to identify how smart use of technology
can stretch the ambition of businesses and become
a driver of competitive advantage. The step change
that is likely in next generation broadband coverage
across Scotland will be critical and we look forward
to playing our part in turning this into increased
economic growth for Scotland.
We will also work to address rural opportunities and
challenges around leadership and business capacitybuilding. Examples of this are the highly successful
Rural Leadership programme and our technical
support to the South of Scotland Alliance on their
broadband development programme. Economic
assets in rural areas make a vital contribution to
Scotland’s prosperity, including growth companies
with particular concentrations in, for example, the
food and drink and tourism sectors. Our strategic
approach to unlocking the potential of these assets
is demonstrably helping companies exploit additional
opportunities.
In addition, Supercomputing Scotland, a partnership
between Edinburgh parallel Computing Centre at
the University of Edinburgh and Scottish Enterprise,
supports companies to be more innovative and
gain competitive advantage through access to high
performance computing technology and expertise.
The project is targeting companies from the Energy,
Life Sciences and Financial Services sectors, but will
consider engaging with any company on a case-bycase basis.
In delivering our regional equity priorities, we will be
advised by our Regional Advisory Boards, made up
of representatives from industry, academia and the
wider public sector.
An important part of this is to develop a more
diverse economy, reflecting the opportunities being
presented by demographic changes such as the
ageing of the population, increasing ethnic and
gender diversity, and wider changes in markets and
localities. This includes encouraging the growth
of different types of business organisation and
ownership, such as co-operatives, employee-owned
businesses and social enterprise, as an important
part of having an entrepreneurial and dynamic
business base.
Delivering across Scotland
The government Economic Strategy seeks to ensure
that all of Scotland can maximise its business and
employment growth potential and correspondingly
reduce disparities in economic performance. Working
with our partners, we will also seek to address the
challenges faced by companies and sectors in areas
that have suffered most from the current downturn.
31
Scottish Enterprise: Business Plan 2013~2016
DELIVERING THE LOW CARBON ECONOMY
The transition to a low carbon economy is now firmly established as a
strategic priority in the refreshed Government Economic Strategy and is one
of our five business plan priorities.
But reducing the carbon footprint is only one aspect
of the fundamental transition which is starting to
re-shape the Scottish economy. Achieving genuine
sustainable economic prosperity implies much more
far-reaching change involving:
firms have a global comparative advantage and where
the greatest economic and environmental benefits
exist. Supporting our priorities on renewable energy
and business efficiency, we will also prioritise market
opportunities in relation to:
•
•
low carbon built environment, for instance,
timber-related products and retrofit technologies
•
smart mobility, including intelligent transport
systems and hybrid/hydrogen transport
•
water technologies, in particular, water efficiency,
purification and waste water treatment
•
carbon capture and storage
•
low carbon heat, for example, district heating and
heat recovery
•
cross-cutting technologies such as advanced
materials, sensors, industrial biotechnology and
smart grids
a move to a more circular economy where
resources and waste can be fed back into the
business cycle rather than permanently flowing
out of it;
•
exploiting low carbon business opportunities,
focusing on areas where Scotland has niche
strengths within national and global contexts; and
•
creating a supportive business environment that
helps firms and sectors adapt to a changing
economy and climate.
A truly sustainable economy is one that lowers its
resource take by re-circulating the materials and
other resources that already exist. We will identify
opportunities to apply these circular economy models
to Scottish firms and supply chains to help realise
the economic benefits that these bring, working with
Zero Waste Scotland, SEpA and other partners. A
circular economy offers a route to greater economic
resilience to withstand price volatility and supply
disruptions, new opportunities to increase product
value through innovative design, re-manufacture
and repair, together with strengthening customer
relationships.
In these and other areas our approach is to use
Scotland’s stretching climate change targets to adapt
quicker than competitor economies, developing lower
carbon products, services and technologies that
serve global markets and help transform the Scottish
economy, generating new sources of job and output
growth.
Internally, we have achieved much over the last few
years. For instance, we have embedded our low
carbon business plan priority across the organisation
and have introduced mandatory carbon assessment
of activities.
We are also making good progress in identifying a
wide range of low carbon business opportunities
across the sectors and we support Industry
Leadership groups to address these growth
opportunities through their industry strategies. Our
focus will be on accelerating the exploitation of low
carbon opportunities in those markets where Scottish
During 2013-2014, we aim to
•
32
secure between 80,000- 100,000 tonnes of CO2
savings arising from SE projects and company
support that improves efficiency.
Scottish Enterprise: Business Plan 2013~2016
FINANCIAL SUMMARY
Over the next three years, we will invest over
£1 billion in the Scottish economy. This is a significant
amount and we are determined to achieve excellent
value for money and impact through this expenditure.
In recent years, we have been able to make significant
efficiency savings. We have done this by streamlining
our operations and management structures,
reducing our accommodation costs by sharing office
space with other organisations, rationalising our
office accommodation requirements and reducing
expenditure in areas such as IT and marketing.
G
2013/14
Indicative Resource
Allocation
2014/15
Indicative Resource
Allocation
2015/16
Indicative Resource
Allocation
£m
£m
£m
Business Efficiency
14.5
14.7
13.5
Innovation and R&D Support
29.1
43.0
25.5
RSA and SMART Support
35.0
36.4
36.4
4.5
4.0
3.0
17.5
17.9
16.8
8.0
7.0
7.0
31.2
32.0
32.7
139.8
155.0
134.9
13.6
15.1
15.1
8.4
8.6
8.8
22.0
23.7
23.9
Planned Investment
Globally Competitive Business
Strategy, Leadership and Organisational development
Domestic Market Development
Enterprise Support Programmes
Internationalisation, including export market development
& GlobalScot
Commercialisation - Development & Exploitation of
Intellectual Assets
Direct staff costs supporting globally competitive
businesses
TOTAL
Globally Competitive Sectors
Industry Sector project support
Direct staff costs supporting globally competitive sectors
TOTAL
33
Scottish Enterprise: Business Plan 2013~2016
2013/14
Indicative Resource
Allocation
2014/15
Indicative Resource
Allocation
2015/16
Indicative Resource
Allocation
£m
£m
£m
Business Infrastructure Projects
41.3
35.2
46.1
Equity Investments and Loans (inc Scottish Loan Fund)
36.1
39.2
31.5
Equity Investments and Loans - Renewable Energy
Investment Fund
31.5
69.8
0
Property Portfolio Operational Costs
8.1
7.6
7.1
Direct staff costs supporting a globally competitive
business environment
6.2
6.3
6.4
123.2
158.1
91.1
Domestic
2.3
2.0
2.0
Overseas, including promotion of Scotland
4.6
4.6
4.6
TOTAL
6.9
6.6
6.6
12.7
13.0
13.4
Domestic
13.3
13.0
12.7
Overseas
6.3
6.3
6.3
Corporate services, including ICT, Legal, Travel etc
12.2
10.9
9.0
TOTAL
44.5
43.2
41.4
336.4
386.6
297.9
Planned Investment
Globally Competitive Business Environment
TOTAL
Marketing, Research & Stakeholder Engagement
Running The Business
Support staff costs
Premises and Facilities Management
TOTAL CASH INVESTMENT
34
Scottish Enterprise: Business Plan 2013~2016
2013/14
Indicative Resource
Allocation
2014/15
Indicative Resource
Allocation
2015/16
Indicative Resource
Allocation
£m
£m
£m
Grant in Aid - Resource Allocation (baseline)
210.7
225.2
225.2
Anticipated reduction to base-line budget
-10.8
3.2
3.1
4.7
203.1
228.3
229.9
Grant in Aid - Capital Allocation (baseline)
20.4
3.9
3.9
Anticipated in-year transfers from Scottish Government (net)
41.0
92.9
7.0
Total anticipated Grant in Aid - Capital Allocation
61.4
96.8
10.9
264.5
325.1
240.8
7.3
8.2
8.3
16.5
4.0
4.0
6.5
6.0
6.0
Co-Investment Fund
10.0
10.0
10.0
Scottish Loan Fund
15.0
16.0
10.0
Other Business Income
16.6
17.3
18.8
336.4
386.6
297.9
130.0 to 155.0
175.0 to 200.0
95.0 to 120.0
Anticipated Grant in Aid - Capital Allocation
61.4
96.8
10.9
Capital Receipts
41.3
38.4
33.3
27.3 to 52.3
39.8 to 64.8
50.8 to 75.8
Income Analysis
Anticipated in-year transfers from Scottish Government (net)
Total anticipated Grant in Aid - Resource Allocation
Total anticipated Grant in Aid - Resource and Capital
EU Funds
Property Disposals
Property Income
TOTAL INCOME
INDICATIVE CAPITAL EXPENDITURE
LESS
ANTICIPATED NET TRANSFER OF GRANT IN AID
REVENUE TO CAPITAL BUDGET
The budget allocations are indicative only. SE manages its budgets in a flexible manner to allow us to react to opportunities and threats
that may arise from developments in the global economy.
Delivery costs include services we provide on behalf of partners and across the whole of Scotland, including: Scottish Development
International; Business Gateway website and enquiry service; Scottish Manufacturing Advisory Service; Co-operative Development
Scotland and the Scottish Investment Bank.
Notes
1. Excludes Ring-Fenced DEL and Annually Managed Expenditure non-cash allocations.
2. Planned capital expenditure over the business period.
3. The actual figure transferred from Grant in Aid Revenue to Capital budget will be dependent on a number of factors including
progress with planned capital expenditure projects and programmes and the amount of capital receipts actually received.
35
Scottish Enterprise: Business Plan 2013~2016
MEASURING OUR PERFORMANCE
The Government Economic Strategy sets out high-level targets for increasing
Scotland’s sustainable economic growth and the contribution that we make
to the national outcomes and purpose targets of the National Performance
Framework.
As a public agency, we need to be able to
demonstrate the impact we achieve from our
investment. Recognising the inter-connected
nature of what we do, we apply a comprehensive
measurement framework that shows how our
activities feed through to the achievement of our
objectives, reflected in the impact we have on the
Scottish economy, focussed on the longer-term
strategic goal of the government Economic Strategy
– to raise Scotland’s long-term sustainable economic
growth rate.
We also make a direct contribution to the objectives
reflected in the National performance Framework
that supports the government Economic Strategy –
with a direct or indirect contribution to 14 of the 50
National Indicators:
OUR CONTRIBUTION TO NATIONAL PERFORMANCE FRAMEWORK
Indicators with direct contribution
Indicators where we make an indirect contribution
Increase exports
Increase the number of businesses
Improve Scotland’s reputation
Improve digital infrastructure
Increase R&D spending
Improve the skill profile of the population
Improve knowledge exchange from university research
Increase the proportion of young people in learning,
training or work
Reduce Scotland’s carbon footprint
Reduce waste generated
Increase renewable electricity production
Increase the proportion of graduates in positive
destinations
Improve people’s perceptions of the quality of public
services
Widen use of the internet
36
Scottish Enterprise: Business Plan 2013~2016
OUR ACTIVITIES: LINKS TO SCOTTISH gOVERNMENT OUTCOMES AND TARgETS
The government Economic Strategy sets out high-level targets for increasing sustainable economic growth.
These targets, along with 16 national outcomes, have informed the development of our Business plan. This diagram
highlights the areas where our activities contribute to National Outcomes and purpose Targets as part of the
National performance Framework.
NATIONAL OUTCOMES
1.
We live in a Scotland that is the
most attractive place for doing
business in Europe
2.
We realise our full economic
potential with more and better
employment opportunities for
our people
3.
We are better educated, more
skilled and more successful,
renowned for our research and
innovation
4.
Our young people are
successful learners,
confident individuals, effective
contributors and responsible
citizens
5.
Our children have the best start
in life and are ready to succeed
6.
We live longer, healthier lives
7.
We have tackled the significant
inequalities in Scottish society
8.
We have improved the life
chances for children, young
people and families at risk
9.
We live our lives safe from
crime, disorder and danger
10.
We live in well-designed,
sustainable places where we
are able to access the amenities
and services we need
11.
We have strong, resilient and
supportive communities where
people take responsibility for
their own actions and how they
affect others
12.
We take pride in a strong, fair
and inclusive national identity
14.
We reduce the local and global
environmental impact of our
consumption and production
16.
7 pURpOSE TARgETS
1.
Supporting globally competitive
companies with growth
& internationalisation
opportunities
Increase
Scotland’s
Economic
growth (gDp)
To match the growth
rate of small
independent EU
countries by 2017
2.
Building globally competitive
sectors utilising Scotland’s
existing capabilities
productivity
To rank in the top
quartile for productivity
amongst our key
trading partners in the
OECD by 2017
3.
Establishing a globally
competitive business
environment
participation
To maintain our
position on labour
market participation
as the top performing
country in the UK
To close the gap with
the top five OECD
economies by 2017
population
To match average
European (EU15)
population growth over
the period from 2007
to 2017. Supported by
increased healthy life
expectancy in Scotland
over the period 20072017
Solidarity
To increase overall income and the
proportion of income
earned by the three
lowest income deciles
as a group by 2017
Cohesion
To narrow the gap in
participation between
Scotland’s best and
worst performing
regions by 2017
Sustainability
To reduce emissions by
80 per cent by 2050
We value and enjoy our built
and natural environment and
protect it and enhance it for
future generations
13.
15.
OUR ACTIVITIES LINKS TO
OUTCOME AND TARgETS
Key:
Major contribution
Our people are able to maintain
their independence as they get
older and are able to access
appropriate support when they
need it
Support contribution
Our public services are high
quality, continually improving,
efficient and responsive to local
people’s needs
37
Scottish Enterprise: Business Plan 2013~2016
Listed on pages 40 and 41 are the performance
measures and targets we use to track our progress
and manage our business, including the milestones
we aim to deliver, across the strategic priorities set
out in this plan.
In the current economic climate, we are also giving
more consideration to the impact of our activities on
employment, by tracking the number of jobs being
created and safeguarded as a result of our work.
This includes the creation of higher value-added jobs
that add most to Scotland’s global competitiveness.
There is an important regional dimension to this,
where creating and sustaining jobs will help ensure
economic growth is shared across all parts of
Scotland.
The target ranges proposed in our 2013-2016 plan
reflect our strategic priorities and also take account
of key documents such as the International Trade and
Investment Strategy. It also takes account of the need
for us to respond to the continuing difficult economic
and business conditions – including issues relating to
access to finance.
Our performance framework, used to monitor the
progress of our entire range of activities, is illustrated
by the diagram on page 39 which flows from our
priorities and objectives, through the activities we
undertake and the outputs and outcomes these
achieve. The diagram shows how, over time, these
contribute to our ultimate objective of achieving
a significant economic impact, realised through
the growth of companies and sectors growth. This
includes the impact we have in terms of reduction
in CO2 emissions, reflecting an important goal of the
government Economic Strategy.
Our measures take account of the evidence on
performance and impact, including planned
improvements in delivery and increased operational
alignment, both within SE and with our strategic
partners. This includes building on the significant
progress in capturing the CO2 impact of some of our
company-specific interventions.
38
Scottish Enterprise: Business Plan 2013~2016
Reduction in C02 emissions
Performance by supported businesses:
Performance of target sectors:
• Forecast/actual increase in turnover/revenue
• Forecast/actual increase in international
turnover/revenue
• Forecast/actual jobs created/sustained
• Amount of capital raised
• Resource efficiency/reduced CO2 emissions
• Economic growth
• Employment growth
• Increased turnover/revenues
• International revenues
• Inward investment
• Revenues from innovation
• Research & development growth
• Resource efficiency/reduced CO2 emissions
Indicators of competitiveness:
Assessment of how much
differential growth can
be attributed to policy
action, both in terms of
specific policies and more
generically.
Improved company
performance:
Investment leverage in
terms of:
Improved sector
performance:
The transition to the
low-carbon economy:
• Increased turnover/
revenues
• International revenue
growth
• Employment growth
• Capital raised
• Capital investment
(incl risk capital)
• R&D (including via
collaboration)
• Inward investment/FDI
• Infrastructure
investment
• SE contribution to
sector growth
• Contribution to sector
performance from SE
projects
• International revenue
growth
• Employment growth
• Low-carbon impact of
SE actions
• Contribution from
projects that address
major low-carbon
opportunities
• Value of SE-backed
resource efficiency
actions
Helping businesses to
increase growth, by
improving:
Helping to increase
investment to increase
economic growth, through:
• Strategy & leadership
• Exports &
internationalisation
• Innovation
• Investment
• Business efficiency,
including reduced CO2
impact
•
•
•
•
•
Risk capital (SIB)
Inward investment
Investment in R&D
Capital investment
Investment in
infrastructure
Helping sectors to grow,
through:
• Increased productivity and
competitiveness
• Increasing and sustaining
employment
• Improving investment and
infrastructure
Strategic Priorities
The Sectors we focus on
Developing Scotland’s lead
position in offshore renewables
Energy – Renewables
Improving the performance of
growth companies
Creative Industries
Developing Scotland’s
international
trade & investment
OBJECTIVES
OBJECTIVES
PRIORITIES
(FOR 2012-15)
ACTIVITIES
ACTIVITIES
OUTPUTS
OUTPUTS
i) productivity
ii) Wage rates
iii) Levels of innovation
iv) New firm formation
Energy – Oil and gas
Financial Services
Food and Drink
Life Sciences
promoting innovation as a driver
of growth
Technology and Advanced Engineering
Transition to a low-carbon
economy
Also: Chemicals, Construction, Forestry &
Timber, Textiles, Universities
Tourism
39
Helping to build a lowcarbon economy across
Scotland
• Addressing the
economic development
opportunity and
challenge across
all aspects of SE’s
operations
Our contribution to the ‘Equity’
agenda of the Government’s
Economic Strategy
Regional equity
Co-operatives and social
enterprise
Equal opportunities
VARIOUS ROUTES TO IMPACT
IMPACTS
growth in productivity, gVA and employment
OUTCOMES
OUTCOMES
IMPACTS
SCOTTISH ENTERpRISE MEASUREMENT FRAMEWORK
Scottish Enterprise: Business Plan 2013~2016
LIST OF MILESTONES AND MEASURES
RENEWABLES
Milestones for 2013-2014
• Initiate significant actions to develop commercial manufacturing in offshore renewables, including the development
of supply-chains and the attraction of significant private-sector investment to key locations
• Help secure significant new investment into the Scottish renewables sector though the Renewable Energy
Investment Fund
• Secure the first tenants into our Inovo Building, to encourage engagement between businesses and academia,
as an important part of the International Technology & Renewable Energy Zone (ITREZ) in Glasgow
Measures
Offshore
Renewables
By 2016, achieve leverage of £300 million – £350 million of additional private investment into
offshore renewables, including £130 million – £150 million of additional private investment
through NRIF
COMPANY GROWTH
Milestones for 2013-2014
• Secure an significant increase in activity by account-managed companies to achieve significant turnover growth in
international markets
• Deliver a deeper engagement with companies in the oil and gas sector, including an increase in the number of
companies from this sector in our account management portfolio
• Help deliver significant investment into Scottish life sciences companies through the new Scottish life sciences
fund managed by RSV
• Launch a new drive to encourage tourism companies to grow by developing new customer experiences through
increased use of market intelligence and leveraging Scotland’s tourism assets and major infrastructure
developments such as the Hydro at the SECC and the EICC.
Measures
Account
Management
Investment
In 2013-14, £1 billion – £1.3 billion turnover growth achieved by account managed firms
In 2013-14, help 250 – 350 account managed companies develop their leadership and strategy
In 2013-14, achieve £70 million – £85 million of leveraged investment from the provision
of growth finance through the Scottish Investment Bank
In 2013-14, help 350 – 400 companies secure growth finance by improving their financial readiness
Capital & efficiency
In 2013-14, deliver £250 million – £350 million of additional capital investment in planned projects
supported by us
By 2016, help companies generate significant productivity and efficiency improvements,
worth at least £70 million – £85 million
INTERNATIONAL TRADE & INVESTMENT
Milestones for 2013-2014
International Trade
• Undertake significant trade promotion activities to drive outcomes on further export growth in oil and gas,
with a particular focus on new markets, in Norway, Brazil, Canada and West Africa
• Initiate agreed actions with industry partners in the food and drink sector to deliver the step change in international
export growth, deepening the impact of the Asia food and drink strategy our strategies in the Americas, Europe and
the Middle-East
• Develop growth in exports through e-Commerce, to capitalise on global opportunities in digital connectivity
Inward Investment
• Maintain Scotland’s relatively strong globally competitive position on attractive high-value inward investment
through a range of benchmarking and comparative analysis mechanisms
• Attract significant inward investment to support the growth strategies of Scotland’s sectors
40
Scottish Enterprise: Business Plan 2013~2016
Measures
**Over 2011-15, achieve a £1.2 billion to £1.7 billion increase in international sales
from supported businesses
Exports
In 2013-14, 220 – 330 companies projecting significant turnover growth from exporting,
including 150 – 210 projecting turnover growth of £1 million +
**Over 2011-15, 8,000 –10,000 companies assisted to develop their capacity for exporting
through initiatives like Smart Exporter
Inward Investment
**Over 2011-15, 25,000 – 35,000 planned jobs through the attraction of foreign investment
– of which between 8,000 and 12,000 planned high value jobs
In 2013-14, 5,000 – 9,000 planned jobs through the attraction of foreign investment
– of which between 1,800 – 2,500 are planned high value-added jobs
INNOVATION
Milestones for 2013-2014
• Initiate a significant step change in our approach to innovation and entrepreneurship in collaboration with the
Scottish Government, Scottish Funding Council, and Highlands & Islands Enterprise
• Initiate agreed action with industry partners and with HIE, the Scottish Funding Council and Scottish Government to
maximise the contribution to innovation and R&D from the EU Horizon 2020 programmes
• Deliver new activity as our contribution to Scotland’s Digital Strategy – including demonstration projects in sectors
and a new Digital Excellence programme involving our account managed companies
• As part of our commitment to improve entrepreneurship in Scotland, deliver two further rounds of the Scottish EDGE
competition to support up to 30 companies to accelerate and achieve their growth potential
Measures
Innovation
Support
R&D Support
Commercialisation
In 2013-14, help companies achieve significant additional revenues from innovation, worth between
£70 million – £100 million over the next three years
In 2013-14, secure £110 million to £150 million of additional commitments in R&D investment
through our assisted projects
***By 2015, generate 15 –21 entrepreneurial companies capable of achieving £5 million turnover
growth within five years of trading, or attracting £10 million investment
THE TRANSITION TO A LOW – CARBON ECONOMY
Milestones for 2013-2014
•
Initiate actions to address significant market opportunities for Scotland in clean technology, the low-carbon built
environment and low-carbon transport
•
Develop significant actions to help Scottish companies use low carbon as a major driver of innovation, in terms of
new products, processes and business models
Measures
Transition to a Low
carbon economy
In 2013-14, identify between 80,000 – 100,000 tonnes of CO2 savings arising from our projects and
company support that improves efficiency
** Measures under this theme set against the Targets set for the 2011-15 International Trade & Investment Strategy
*** Three-year target, established last year.
41
If you require this publication in an alternative
format and/or language please contact the
Scottish Enterprise Helpline on 0845 607 8787
to discuss your needs.
Scottish Enterprise
Atrium Court
50 Waterloo Street
Glasgow
G2 6HQ
Helpline: 0845 607 8787
E-mail: [email protected]
www.scottish-enterprise.com