Scottish Enterprise BUSINESS PLAN

Transcription

1 Scottish Enterprise BUSINESS PLAN Supporting a globally competitive Scotland

2 CONTENTS 1 CHAIRMAN S FOREWORD 2 CHIEF EXECUTIVE S FOREWORD 3 FACING THE ECONOMIC CHALLENGE 6 GLOBALLY COMPETITIVE COMPANIES 14 GLOBALLY COMPETITIVE SECTORS 20 GLOBALLY COMPETITIVE BUSINESS ENVIRONMENT 24 DELIVERING THE LOW CARBON ECONOMY 26 FINANCIAL SUMMARY 28 MEASURING OUR PERFORMANCE

3 CHAIRMAN S FOREWORD Over the past year, we ve seen two very different pictures emerge of the Scottish economy. time when no one is certain what is going to happen in the wider economy. But as daunting as the current conditions may be, sitting back and doing nothing is likely to have more negative consequences for their business and the Scottish economy. The good news is that there are opportunities out there for companies with a good product, an outstanding technology or an ambitious management team. The successes of the past year show the scale of the prize that is on offer. There have been some of the biggest successes since the global financial crisis first hit in Scottish companies like the Wood Group, Optos and Clyde Blowers have demonstrated impressive growth, fuelled by their success in overseas markets while global firms such as Amazon, Avaloq and Samsung have all made significant investments in Scotland leading to thousands of new jobs. There has also been real progress in delivering our renewable energy ambitions with major new developments at Fife Energy Park, the International Technology Renewable Energy Zone in Glasgow and agreements for further development at the ports of Dundee and Leith. At the same time, the Eurozone crisis has dominated headlines around the world and we ve seen report after report highlight the increasingly fragile state of the global economy. Scotland, like most other Western economies, has not been immune. Overall economic growth has been marginal and unemployment is rising, with particular consequences for our younger generation. Some might argue that the fact that we ve been able to achieve the success we have in this environment is evidence that our focus and our priorities are the right ones. While I agree with the sentiment, the stark economic reality only serves to highlight that we need to do even more and we need to do it better. Arguably, one of the biggest challenges we face is encouraging companies to invest in their growth at a Of course, partnership working will be crucial to the delivery of these goals. We are fully committed to a Team Scotland approach, where all parts of the public sector that have an impact on Scotland s economy have a shared understanding of where we need to get to and what we need to do to get there. The success in bringing the Green Investment Bank to Scotland is a great example of this Team Scotland approach in action and is something we are keen to replicate across all of our activities. In doing so, we can help create the jobs needed to address the unemployment challenges we currently face and to give our young people new opportunities to thrive. We will also be operating in a heightened political atmosphere given the ongoing debate about constitutional change. While we cannot ignore this debate, I am determined that it does not become a reason for inaction by us, or indeed by the companies we work with. We will ensure our conversations with Scottish companies are focused on realising new opportunities that will support growth and transform the Scottish economy. We know that the next three years are likely to be pivotal to Scotland s economic future. The Scottish Enterprise Board is committed to doing everything it can to ensure we succeed in making Scotland more globally competitive. Crawford Gillies Chairman 1

4 CHIEF EXECUTIVE S FOREWORD In developing this plan, we have tried really hard to strike a balance between ensuring there is continuity of our long term goals for Scotland s economy with the need to do something extra to respond to more immediate challenges. to 20% over the next three years, which would see an additional 400 companies benefit from intensive Scottish Enterprise support. We will be doing everything we can to support these companies with the courage and conviction to do things differently or try something new that will help them carve out new business at home and, crucially, overseas. That does not simply mean offering financial assistance. Feedback from our customers has told us that much of the value we can bring to their business is the networks we have access to both locally and globally and how we can use those to open doors or broker relationships. As a result, our five strategic priorities remain unchanged. This focus on renewables, international trade and investment, growth companies, innovation and the low carbon economy is fundamental to Scotland s future and we will be doing all we can to exploit new opportunities across each of these areas. Given the economic climate, however, we have looked very carefully at how we can work better, smarter and more innovatively to respond to the conditions in the here and now. We have listened to the views of our partners and to the wider business community to give us as complete a picture as possible about the challenges that exist across Scotland and where there are opportunities for us to help. In doing so, we have been able to formulate a plan that remains highly ambitious but allows us to place greater emphasis on areas where we know we can make a difference in the short term. Our customers, for example, tell us that our account management programme, where we work intensively with companies on a one-to-one basis, has a real impact on their turnover and overall growth. That is why one of our current priorities is to build better relationships with the banking sector in Scotland and we will develop this further over the next year. Part of this will involve sharing advice and information about the companies we work with in order to remove obstacles to bank lending and ensure companies are able to secure appropriate finance. In the current environment, we will also be stepping up our efforts to boost Scotland s international trade and investment. We will increase our footprint across the world, establishing new presence in Brazil, new parts of Canada, China and India. This increased international focus will help open up new opportunities for companies while also attracting much needed jobs and investment to Scotland. To achieve our ambitions, we need to be fleet of foot and respond to new opportunities wherever and whenever they emerge. I believe this business plan will help us to achieve that. Lena Wilson Chief Executive This is why we are aiming to increase the number of companies in our account management portfolio by up 2

5 FACING THE ECONOMIC CHALLENGE Our ambition is to help make Scotland more globally competitive. Our new Business Plan for sets out what we are doing to achieve that ambition and how we are responding to the economic challenge. It is clear that the economic recovery remains fragile in Scotland, the UK and across most developed nations. Significant risks to growth persist including: weak demand; constrained access to finance which is inhibiting business investment; inflation; falling real household incomes; and a sluggish recovery in many of our key trading partners. This is why the Government Economic Strategy has a sharp focus on growth companies, growth markets and growth sectors. This Plan outlines what we will deliver in these areas: Growth Companies we will increase our support for companies that can have the greatest impact on the economy. Growth Sectors we will support the sectors in Scotland that have the greatest opportunities to improve productivity and competitiveness and to create jobs. These include established sectors where Scotland has developed strong competitive advantages such as in food & drink and oil & gas. It also involves establishing a leading position for Scotland in new industries such as renewable energy. Growth Markets we will make the most of the opportunities that Scotland has in global markets, growing our international trade and attracting significant new investment. This involves increasing the number of Scottish companies that can compete effectively in high growth markets. Vigorous and bold action is required from Scottish Enterprise and our partners to respond to the economic challenges that we face. Working together, we need to make sure that we exploit every advantage which we have. While we will continue to focus on actions that will make the biggest difference to raising Scotland s long-term sustainable economic growth, we will also give particular attention to two particular issues that are important in the short-term: Jobs we will help companies to create and sustain employment, reflecting the need to address the challenge of growing unemployment particularly among young people; and Investment we will tackle the current constraints that companies face in unlocking finance for growth, both by providing investment support and attracting new investment to support the growth of our companies and sectors; The economic downturn has had a greater impact on some areas of Scotland than others. We will work with partners throughout the country to take advantage of new opportunities and to ensure that our contribution to recovery is tailored to the different economic circumstances in Scotland s cities, towns and rural areas. 3

6 OUR STRATEGIC PRIORITIES The Board of Scottish Enterprise has identified five strategic priorities to help us respond to the economic challenges and allocate resources where they will have the biggest possible impact on Scotland s economy. These are: Renewables: We are helping companies to realise the massive potential in areas such as offshore renewables, where Scotland already has significant competitive advantage. Working with partners, we will help to create a world class renewable energy cluster. As part of this, we will support the innovation systems and supply chains which are necessary to build the offshore renewables industry in Scotland and deliver its significant growth potential. The immediate effects of this long term work are already starting to be felt, with recent investment in Scotland by Samsung Heavy Industries, Gamesa and Mitsubishi Heavy Industries. The UK Government s new 50 million Offshore Renewable Energy Catapult project, funded by the Technology Strategy Board, will also be located at the flagship International Technology and Renewable Energy Zone in Glasgow. A total of 300 million of investment in developing offshore wind alone has already been confirmed for Scotland with an estimated potential further 30 billion to be invested in the coming years. By 2015, we will Make significant progress on the National Renewables Infrastructure Fund Attract up to 30 million of additional R&D investment through the International Technology and Renewable Energy Zone (ITREZ) International Trade and Investment: We are increasing our commitment to boosting international trade and investment and improving Scotland s global business connectivity. Through our overseas expertise and international networks, we will help Scottish companies to increase trade in international markets and attract new foreign investment into Scotland. We will make a significant contribution to achieving the Scottish Government s ambitious export target, delivering against Scotland s Trade & Investment Strategy, By 2015, we will Increase the international sales of supported businesses by up to 1.7 billion Generate up to 35,000 planned jobs through the attraction of foreign investment including up to 12,000 high-value jobs Growth companies: We are working more intensively with Scottish companies that have the biggest growth potential. These companies will provide the most immediate positive response to the challenging economic climate and can make a significant impact on the economy and jobs, driving productivity and growth through continued innovation and investment. The companies we work most closely with account for around 330,000 jobs in Scotland and an estimated total turnover of 75 billion. A higher proportion are still projecting growth and taking on more employees than across the wider business base in Scotland. By 2015, we will Increase the number of growth companies in our account management portfolio by up to 20% In the next year, help up to 400 companies secure growth finance 4

7 Innovation: This is the life blood of long term economic success. We will simplify our approach to supporting innovation and commercialisation, working with partners to foster innovation and turn great business ideas into commercial success in the shortest timescales. With the explosive growth of internet usage transforming the way we do business, we will support Scottish companies to quickly take advantage of the rapid growth in the digital economy. In , we will secure up to 75 million additional business investment in R&D activity In the next three years, generate up to 300 million of new revenue from innovation for the companies we work with The transition to a low carbon economy: Now at the heart of the Government Economic Strategy, this has huge implications and opportunities for the products and services which Scotland offers in global markets. We are raising awareness of these opportunities and helping companies to supply and adopt low carbon technologies, products and processes in emerging markets such as clean energy, waste, water and materials. This has immediate benefits in reducing costs as well as advantages in the longer term in developing new markets. In , we will Achieve significant low-carbon efficiencies across all of our key sectors Generate up to 50,000 tonnes of CO 2 savings arising from SE support for companies How we will deliver our priorities Partnership is fundamental to what we do and how we do it. Working together with partners helps to create efficiencies, manage risks and maximise returns on investment. It helps to build business networks and broker relationships. It helps us to learn from others and build the evidence base which is so important in prioritising and delivering the activities which lay the foundation for long term economic impact. This Team Scotland approach will ensure we can make the biggest difference to the competitiveness of the Scottish economy with the resources we have available. The way that we work with our partners and customers is also of great importance and we are committed to delivering excellent customer service. As an organisation we strive to follow the standards set out in our Customer Charter and are committed to delivering the best service possible to all our customers. We have also placed greater emphasis on measuring our performance. This includes identifying the impact we have from our activities and the contribution we make to the Scottish Government s objectives. This is clearly set out in the measurement framework and the milestones and measures at the end of this plan. An economic development agency is a catalyst to growth. This plan sets out why and how our investment can re-ignite Scotland s economy. 5

8 GLOBALLY COMPETITIVE COMPANIES Scotland needs a thriving private sector to help drive our economic recovery. We need more companies creating and sustaining new jobs, investing and participating in innovation and operating internationally. Evidence shows that high growth firms are a significant driver of economic growth. NESTA research states that a small minority of high-growth businesses hold the key to job creation and wider prosperity. It is this group of companies that Scottish Enterprise focuses on. How we support companies to grow bigger, better and faster Delivering support to business is a core function of Scottish Enterprise and a key part of our contribution to the Government Economic Strategy. Our focus is on growing companies and markets, helping to build company confidence in uncertain times and acting quickly to exploit opportunities for growth. We will work more intensively with more growth companies, targeting those that will make the biggest difference to Scotland s economic performance, both in the short term and in the future. These are the companies that contribute most to job creation, increasing productivity and competitiveness. The support we offer is not just financial. Customer feedback shows that we add considerable value through the connections we make and the intelligence we can provide. We help to identify and develop new business opportunities, particularly overseas. We broker valuable business relationships through our events and our links to national and global business networks. Underpinning our approach is the need to add value to the businesses we work with, in a way that helps their growth opportunities to be realised bigger, better and faster. The majority of growth companies we target are small to medium sized enterprises and many are at the early stages of development, a point where external support can be particularly effective. This includes helping companies to explore innovative ways to achieve scale, for instance by promoting collaboration between businesses through our subsidiary Co-operative Development Scotland. We foster entrepreneurship and nurture talent. Working with our local authority partners in Business Gateway, we offer an integrated business support model where businesses can access the right type of support at the right stage of their growth, wherever they are in Scotland. We offer integrated support to companies with the strongest growth potential through our account management process. 6

9 Case study BrewDog: rapid growth niche sector young entrepreneurs distinctive brand What we will deliver during To help support Scotland s economic recovery, we will increase the scale and quality of businesses we work with. Over , we will increase the size of our account management portfolio by up to 20% As part of this we will increase the number of Scottish companies in our portfolio that achieve high growth (defined as growth of more than 60% over three years) to 200. In , we will increase the number of account managed companies engaged in developing their leadership and strategy as a means of increasing their long-term growth performance. We will also deliver improved outputs and outcomes from account managed companies to help grow turnover and export sales and deliver better returns on our investment. Founded in 2007 by two young entrepreneurs, Fraserburgh-based BrewDog has created a niche in the market for distinctive beers, promoting its brand through clever social media marketing and creating a dedicated following. BrewDog beers are now stocked by major and niche retailers the world over, and the company has opened five distinctive bars in the UK. Cracking the export market played a significant part in the company s growth and now accounts for 60% of turnover. BrewDog has benefited from a range of SE and SDI support including; market analysis, business leads and support to attend overseas trade shows. We will continue to support companies which have longer term growth potential or which are significant employers in a particular region or sector, where growth is anticipated. For instance, we will support company growth in offshore renewables through developing the wider supply chain and in food and drink through the Scotland Food & Health Innovation Service. Since 2007, the company has experienced phenomenal growth of 200% year on year. It currently has 70 employees, its beer is for sale in 27 different countries in five continents and it is now the largest independent brewery in Scotland. SE Account Managers have been brilliant since the beginning. We were obviously quite young and quite inexperienced and these guys have really helped. It is great to have people there who care passionately about what we do who we can bounce ideas off. James Watt, Head of Stuff 7

10 Case study Promedics Orthopaedics Ltd: step change improvement consolidation of functions to Scottish base strong international trade development We have identified particular areas where there is growth potential and where SE achieves the greatest impact across the company base by delivering: Increased international trade and investment in globally competitive companies and sectors, with a particular focus on the Scottish Government s ambitious export target Improved access to finance for Scottish companies in collaboration with banks to improve the supply of investment finance and doing more to help companies unlock more funding More innovation by helping companies develop new products and services which are critical to realising global competitive advantage in our growth sectors New business opportunities from the low carbon transition across all aspects of our sectors - building on current competitive advantage to develop supply chains Formed in April 2008 after a management buyout, Promedics Orthopaedics Ltd manufactures soft orthopaedic goods. Managing Director David Baxendale and his colleagues have undertaken several radical step changes for the company. They have successfully integrated sales and administration functions from their Blackburn plant with their manufacturing unit at Port Glasgow. Although the company was well placed to capitalise on its proposition in the UK market, it became obvious that it had a lack of profile overseas. With SE and SDI support, the company has now established a strong presence at the Medica annual trade show in Dusseldorf. This has helped the company to create a successful export market and new product development, with 150 staff and a turnover of 8 million. Promedics is now developing a post-operative orthotic knee brace. Says David: This is a very exciting and fairly large innovation project, which we intend to launch in Medica this year. Scottish Enterprise was remarkably supportive of our ideas and contributed to the development of a prototype through an SE Innovation Grant towards the costs of design and tooling. We expect the knee brace to add significantly to our turnover. David Baxendale, Managing Director Improved leadership capabilities of high growth companies helping company leaders to embrace and implement global best practice across all aspects of business Greater access and awareness of the support we provide in partnership with Business Gateway and Highlands & Islands Enterprise and through our work with business organisations and industry groups We will also help companies to realise their growth potential across these key areas by raising awareness of opportunities at an EU level. Scotland s economic priorities closely mirror those of the EU and with billions of Euro of funding available to meet EU objectives, this is not an opportunity to be missed. Through our Scotland Europa team, we aim to make the most of Scotland s influence in key areas of EU policy and attract additional funding. The Scotland Europa team works closely with EU partners to share knowledge, experience and resources to ensure the best possible outcomes for Scottish partners from EU developments. 8

11 Increasing Scotland s international trade and investment Evidence shows that companies which operate internationally are both more productive and more innovative, as they are exposed to new ideas and business models. As our contribution to the Government s International Trade and Investment Strategy, we will challenge and support growth companies to raise their ambition and help grow Scotland s exports. We will continue to exploit our traditional export markets in Europe and North America (particularly important for new exporters), while focusing additional efforts on emerging opportunities in fast-growing economies such as China, India, the Middle East and Brazil. In response to the Government s target to deliver a 50% increase in exports by 2017, we will help more Scottish companies to exploit the opportunities in international markets. We will provide direct support to companies to help them on their export journey from identifying new markets (international strategy development, sales and marketing skills and in-market intelligence): to providing access to international networks and on the ground support from our experienced staff based overseas. During , our investment in promoting Scotland s international trade will help to: Increase the number of Scottish companies exporting with a goal of having up to 10,000 more businesses with the skills to go international by 2015 through partnership initiatives such as Smart Exporter. Increase the international sales of supported companies by up to 1.7 billion by This will include intensive work with companies with significant additional international export potential In recognition of the opportunities and challenges for different sectors, we will work closely with industry bodies to help them develop an industry approach to increasing international exports, at both an individual company level and through industry wide initiatives. Our Asia Food and Drink Strategy and Plan, for example, has been developed to help the sector fully exploit opportunities for additional growth in Asia over the next six years. Following consultation with the main industry players, it gives an appraisal of the market opportunities, along with recommendations for developing sales in Asia for each sub-sector. It also provides a market development plan and indication of targeted support available to companies. Stimulating inward investment Inward investment is a key component of Scotland s international development. A series of recent successes has seen overseas firms play a key role in creating new jobs in Scotland. We are building on this foundation and continue to raise the global profile of Scotland s niche sector strengths and assets and the opportunities for foreign direct investment which they provide. These opportunities, along with financial support, through schemes such as Regional Selective Assistance (RSA) and R&D grants, will ensure we can continue to attract new investment, as well as encourage those investors already operating in Scotland to expand their business. At the heart of recent success has been our collaboration with others. We have been building a Team Scotland approach through the work of our international arm, Scottish Development International (SDI) - our joint venture with the Scottish Government and Highlands and Islands Enterprise (HIE). This involves working with key partners in industry, our cities and the wider public sector to produce a shared portfolio of investment opportunities and we all do our part to encourage further international investment into Scotland. We will bolster SDI s presence in international growth markets and make greater use of prominent Scottish companies and individuals to build Scotland s international profile. Through our GlobalScot network, we will continue to support our overall efforts to increase Scotland s international trade and investment. 9

12 Case study Spark Energy Ltd: gap in the energy supply market - private finance for the company s growth plans secured premises in Borders now a growth company (pictured above Chris Gauld, Managing Director) When entrepreneur PJ Darling saw a gap in the energy market, he wasn t put off by having to establish his own utility firm to exploit it. PJ saw a chance to improve the organisation of utility services for properties under management, offering tenants an easy-to-use energy service that could compete with the big six energy utilities on price. SE has played a key role in helping to raise finance for the company s growth plans, helping to leverage private funds through seed funding and subsequent investment support. SE has also helped in sharing some of the costs of developing new billing and registration systems, integrating these with state-of-the-art smart meter technology which is being rolled out across Spark s customer base. SE was also instrumental in helping the firm to secure premises at Ettrick Riverside, an ideal location for the business and a major contributory factor in its decision to locate in the Borders. The company now employs over 100 staff and aims to achieve sales growth exceeding 50 million within the next five years. Much of Scotland s foreign direct investment comes from investors already located here. We are developing a deeper engagement with investors both corporately and locally to grow their presence in Scotland. We aim to increase the economic impact achieved by further embedding these investors in Scotland and encouraging expansion and developing local supply chains. Despite the very difficult investment climate of recent years, we have maintained Scotland s share of global Foreign Direct Investment and have consolidated our lead as the top location in the UK for investment outside the London area. To help build on this momentum, we will also look to tap new sources of investment, for instance by encouraging international investment funds to invest in Scotland, as well as attracting direct air routes that will encourage further international trade. Through our focus on inward investment during , we will deliver Up to 35,000 planned jobs by 2015 through the attraction of foreign investment of which up to 12,000 will be planned high value jobs We will also target specific opportunities in the development of the supply chains for our key sectors through delivery of projects such as Edinburgh BioQuarter and National Renewables Infrastructure Plan. Improving access to finance for Scottish companies In the face of challenging economic conditions, securing appropriate funding options to support growth remains a considerable challenge, in particular for small and medium sized businesses. How companies access finance is also changing and in response, we will work more closely with companies and funding providers to help secure investment for growth. Scottish Investment Bank Through our Scottish Investment Bank team (SIB), we will continue to deliver products and services that can support both early stage and established SMEs with growth and export potential. Spark started life just under four years ago and for most of our development we ve had Scottish Enterprise right alongside helping us achieve our goals. Our relationship has been absolutely vital to helping the business grow. PJ Darling, CEO 10

13 We will maximise economic and commercial returns from the SIB suite of investment funds, providing seed, growth and expansion funding to help early stage companies achieve their growth potential and to grow the Scottish risk capital market. Our future development activity will seek to respond to the changing funding environment, where there is evidence of a market failure which is constraining growth and in particular, where Scotland has recognised sector strengths. In , we will achieve up to 75 million of leveraged investment from funding provided through the Scottish Investment Bank Working with banks Whilst there are challenges in the provision of finance to business, it is also important to understand the constraints that banks are facing. We will work with banks and other financial bodies to help them support the growth potential of the companies we work with, by removing obstacles to bank lending. SE is building improved relationships with the banking sector in Scotland using a funding team approach to companies with growth potential, bringing appropriate expertise and sharing risks at the earliest possible stage. Alongside our work with lenders, we will continue to keep close to our customers to understand their challenges in accessing bank finance at an earlier stage. An important part of this will be to work with up to 400 companies to improve their financial readiness and ensure they can present an attractive investment proposition to potential funders. This will develop a systematic approach to stimulating appropriate demand for - and access to - investment for SE s customers growth opportunities. Encouraging companies to innovate The productivity of Scotland s company base is still constrained by a comparatively poor performance on innovation. This is reflected in weak outcomes from innovation activity and relatively low levels of business expenditure on research and development (R&D). Improving our overall innovation performance will be a critical driver of growth and Scotland s overall global competitiveness. It is widely recognised that Scotland has competitive advantage in key areas of science and technology. However, the nation performs relatively poorly in terms of numbers of active entrepreneurs, business start ups and creation of high-growth technology businesses within knowledge intensive industries. We need to rapidly commercialise those technologies where there is both a strong market opportunity and an ambition to create or grow a company of scale within Scotland. 11

14 Case study Web Rigging Services: high growth start up energy sector Established in 2005 by Jo and Gordon Bisset, Web Rigging Services has developed a lightweight, flexible alternative solution to scaffolding that provides under-deck access for structures such as bridges and jetties. With its first solution installed in 2010, the company is now enjoying great success both at home and overseas. This requires a deep understanding of the market and a strong commercial approach based on capable management teams. Our focus is, therefore, on supporting those with the greatest commercial potential globally. While small in number, these companies produce significant benefits, not least in terms of the jobs they create and the impact they have on the economy. Building on Scotland s strengths in science and technology, we will: Generate up to 21 companies by which are capable of achieving 5 million turnover growth within five years of trading, or attracting 10 million investment We are seeking to deliver our contribution to the new integrated approach to innovation and commercialisation, being taken forward as an important part of the Government Economic Strategy. This involves a close partnership with Highlands and Islands Enterprise, the Scottish Funding Council and the Universities to ensure we maximise the Government s 45 million SMART: Scotland investment in research, knowledge exchange, commercialisation and innovation. As with many business start-ups, Web Rigging required significant cash investment for material purchases and building the business infrastructure. The company has benefited from the SIB Seed fund and is now in a strong position to secure further investment and develop key markets. As well as company-specific support through our High Growth Start-up Unit, Jo also recently attended the worldrenowned Entrepreneurship Development Programme at MIT in Boston. While the company is enjoying great success in civil infrastructure and onshore energy markets, its target sector moving forward is offshore fixed platforms for the oil and gas market. An important step for the company is now to get better known within the oil and gas industry, a move that was made easier by attending the Offshore Oil and Gas event in Aberdeen. Dennis MacPhail from the HGSU has been an excellent mentor for the business, providing an amazing amount of hands-on experience from deal-making through to management. Jo Bisset, Managing Director 12

15 As part of our integrated approach to innovation, we will: Assist up to 400 companies during to complete innovation projects which will result in additional turnover of up to 100 million over the next three years Support up to 110 companies by 2015 to innovate through the Scotland Food & Health Innovation Service, which will generate increased turnover of up to 30 million Help up to 4,000 companies to access key sector market intelligence initiatives during In addition we will deliver specialist innovation support to growth companies, alongside the information and support for collaboration through Enterprise Europe Scotland. This will include targeted support to growth companies in sectors such as energy, life sciences, food & drink and technologies & advanced engineering to develop products and services that will help them take advantage of significant new opportunities emerging in global markets. We will also undertake significant investment in new infrastructure to support R&D activity in Scotland, such as our support for the International Technology and Renewable Energy Zone (ITREZ) at Strathclyde University; supporting advanced manufacturing through the Advance Forming Research Centre (AFRC) in Renfrewshire and; support for life sciences through Edinburgh BioQuarter. To help deliver sector growth opportunities, we will increase our support through R&D funds, which will include attracting significant new R&D funding from UK and EU sources, working with Scotland Europa and other partners. Delivering business opportunities from the low carbon transition The transition to a low carbon economy is a significant economic opportunity for Scotland, not only in renewable energy but also across sectors such as construction, chemicals and food & drink. The Scottish Government s leadership on climate change targets and regulation will help accelerate this transition by providing investor certainty, which in turn provides Scottish companies and sectors with early mover competitive advantage. Scottish Enterprise will help companies to improve their productivity. We will encourage every company and sector we work with, through our team of sustainability specialists, to consider the low carbon opportunities which can give them a competitive edge. We will help Scottish companies capitalise on first mover advantage by investing in low carbon technologies, products and services that will allow them to increase turnover, employment and competitiveness. We will enable companies to deliver productivity improvements and grow more sustainably. Through the services we provide such as lean management, Environmental Management Initiative (EMI), Scottish Manufacturing Advisory Service (SMAS) and Leadership Development, companies can be more efficient through better management of resources such as energy, waste, water and materials We will help companies to develop innovative low carbon products through programmes such as Prototyping for Offshore Wind Energy Renewables Scotland (POWERS) and R&D grants which will help to support commercial development of low carbon technologies Our support will allow Scottish companies to adopt more sustainable business models. These models can provide competitive advantage by unlocking innovation opportunities and aligning profit with wider environmental and social objectives. Improving the leadership capabilities of high growth companies A key characteristic which underpins the success of all high growth firms is strong leadership and ambition. Research has shown the robust relationship between strong, effective leadership and business dynamism. With improved leadership, Scotland s productivity, innovation and skills base will be enhanced. During , we will help up to 350 accountmanaged companies to develop their leadership and strategy We will do whatever we can to help foster this culture of leadership within organisations, helping to drive both continuous and step change improvement, by supporting talented leaders who have a clear vision of success and are able to inspire and motivate their staff to reach their potential. Our broad range of support in this area has proved to be effective, for example, the Leadership for Growth and Companies of Scale programmes which offer tailored support to help companies achieve rapid growth. 13

16 GLOBALLY COMPETITIVE SECTORS A key element of Scottish Enterprise s response to the economic climate is to drive growth across Scotland s sectors. The Government Economic Strategy also highlights that certain sectors have the potential to make a significant contribution to increasing Scotland s growth. By working in partnership with industry and others in the public sector, we can identify both short term opportunities and the route to long term, transformational change. Our approach requires in-depth knowledge of Scotland s niche sector strengths and global market opportunities. Analysis of how businesses operate as a cluster or system allows us to get a better understanding of how concentrations of businesses from similar sectors operate together. Industry clusters help to foster innovation, increase productivity, develop supply chains, identify manufacturing and service opportunities and attract new talent. By working in collaboration with business, we can identify where our investment will have the greatest impact. In Scotland, we are fortunate to have world class assets and resources in the shape of companies and universities with expertise in niche areas. This makes us highly competitive on the global stage, both in emerging markets such as renewables and in established sectors such as food and drink. We also have a number of internationally renowned companies operating in these sectors which are competitive locally, nationally and internationally. These assets are drawn from across Scotland, with major concentrations in all sectors contributing to the development of Scotland s city regions, alongside the strong role of sectors such as energy, tourism and food & drink in rural Scotland. 14

17 What we will deliver with industry All of 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 our economic ambitions. They are pivotal to fostering deeper collaboration between the Government, its agencies, academia and industry, as well as helping to develop sector strategies that are genuinely industryled. The groups already make a significant contribution, helping to build Scotland s competitive advantage and our approach has been identified by the EU as an example of international best practice. Clearly the development of the offshore renewables sector offers the biggest opportunity we have seen in Scotland for a generation. Working alongside our partners, we will ensure that the correct infrastructure, both physical and institutional, is in place for the renewables sector to thrive and attract new investment. We will support Scotland s renewables companies to secure investment, to innovate more and to develop their international operations. We will also ensure that other sectors in Scotland can benefit from growth in renewables by developing a strong supply chain of local companies. As we build our renewables cluster, we will be responsive to developments that will influence the market such as electricity market reform. Offshore renewables is also a prime example of how the growth of a particular sector can harness assets and deliver benefit across Scotland. This extends from the R&D base developing in and around Scotland s cities, through to manufacturing opportunities in areas such as Fife and Ayrshire, and offshore servicing in the ports of rural and urban Scotland. Renewables, however, cannot have a transformational impact alone. We need to continue to invest in other niche sectors where Scotland has global competitive advantage to ensure we have a balanced and mixed economy. Scotland s sectors have reached different levels of maturity and so the nature of the opportunity and the type of support they require varies. For instance, in the oil and gas sector, we work closely with the Oil and Gas Leadership Group to better understand the opportunities and constraints for growth. As a result, we can flex our interventions to support particular areas such as export assistance and supply chain development, both of which can make a high impact. In sectors such as life sciences which are still maturing, we are tailoring our support to nurture early-stage company growth and innovation. The key is understanding the composition and capabilities of each sector and how these may be combined across sectors to seize as many of the emerging global opportunities as possible. Our sectors will also benefit from the Scottish Government s new Enterprise Area policy. The four Enterprise Areas will have an emphasis on some of our most dynamic sectors such as renewables and life sciences with the greatest potential to create new employment opportunities, stimulate private investment and boost economic growth. Creative Industries Our focus in the creative industries is on those companies operating in the high growth areas of digital media such as TV production, interactive leisure software and publishing. We contribute to the ambitious targets set out in Digital Inspirations, Scotland s industry strategy for the Digital Media sector, which calls for a doubling of sector revenues to 6.3 billion by the end of We will also continue to develop infrastructure at Creative Clyde in Glasgow and Seabraes Yard in Dundee which supports sector growth and demand. We will help others to build the profile of the Creative Industries in Scotland and abroad and 2012/13 will focus on support for companies to encourage greater levels of exporting. This will be done in collaboration with key trade bodies such as Publishing Scotland and Producers Alliance for Cinema and Television (PACT). We will invest in projects such as Interactive Scotland; Creative Edge; and Digital Innovation Support. We are a full member of the Scottish Creative Industries Partnership and our projects are aligned with other members and main strategic partners: Creative Scotland; Skills Development Scotland and the Scottish Funding Council. 15

18 Energy We will support the Scottish Energy Advisory Board (comprising all major public and private partners) to develop and deliver a set of strategies for the main energy sub-sectors where Scotland has competitive advantage. The scale of opportunity in offshore wind and marine energy could help to create up to 35,000 direct jobs and generate an extra 11 billion in GVA by 2020 and immediate benefits are already starting to be felt with significant new investment announcements. The oil and gas sector, concentrated around Aberdeen, continues to offer opportunities for significant growth and will continue to do so for the foreseeable future. The focus has to be on extracting the maximum resources possible from the North Sea by focusing on new technology and exploiting our strengths such as subsea engineering. We will also support the sector to exploit new opportunities in global markets, building on the technologies and operational strengths that have been developed in the North Sea in areas such as unconventional gas, arctic and decommissioning. There are also considerable opportunities to use this expertise to contribute to the development of the wider offshore renewables industry. Through our investment in the International Technology Renewable Energy Zone (ITREZ) in Glasgow, we will also work alongside energy companies to establish a renewables cluster with a strong supply chain which is able to stimulate innovation and meet the needs of the renewables sector in areas such as design, manufacturing, installation, operations and maintenance. The new Offshore Renewable Energy Catapult centre at the University of Strathclyde will also become a world-leading hub of expertise, developing innovative technologies that will reduce the cost of offshore renewable energy and help transform the UK into a low carbon economy. We will identify new mechanisms to attract significant investment funding for the Renewables sector in Scotland. This includes the Green Investment Bank (GIB), a new UK financial institution which will be headquartered in Edinburgh and aims to accelerate investment in the transition to a green economy. The GIB will mobilise additional private sector finance into green infrastructure projects and has identified offshore wind power generation as an early priority. We will also continue to work closely with partners to make the most of EU opportunities to attract additional investment and support for Scotland s energy sector. As a key part of the Government s funding commitment, we will spend some 120 million over the next three years on energy projects such as the National Renewable Infrastructure Fund (NRIF). NRIF will help to attract major infrastructure investment by a range of parties in key projects such as Energy Park Fife and Dundee Port. We will also help to reduce the cost of developing wave and tidal technologies through our Wave and Tidal Energy Research, Development and Demonstration Support (WATERS). This aims to bring low-cost-energy marine energy devices to commercial application. Over , we will: Achieve leverage of up to 350 million of additional private investment into offshore renewables, including up to 150 million of additional private investment through NRIF Attract up to 30 million additional R&D investment through ITREZ Launch a major drive to increase Scotland s exports from the Oil & Gas sector, targeting new opportunities in key growth markets 16

19 Case study Prototyping for Offshore Wind Energy Renewables (POWERS): prototype development fund Financial & Business Services We will help the Financial Services Advisory Board to deliver its vision of a world class business environment which builds on Scotland s key strengths and assets in financial services. There has been a series of positive business opportunities in this sector and SE and SDI will continue to offer support in attracting major inward investment, working more intensively to grow our existing company base, retaining a skilled workforce and supporting key infrastructure projects such as the International Financial Services District in Glasgow, the Edinburgh Exchange District and Dundee Waterfront. We will also work with our partners in the financial sector to address key issues such as access to finance for growth companies and exporters. Within business services, SE and SDI will continue to work with partners to identify and deliver opportunities around business process outsourcing, engineering services and legal services. Offshore wind is a rapidly expanding, long-term, global market with significant economic growth opportunities for Scotland. In particular, we have a real opportunity to capture a share of the critical turbine manufacturing market. Building on recent successes in attracting worldleading turbine manufacturers to locate their Research & Development functions in Scotland, the 35 million POWERS fund offers support for the capital costs associated with the full-scale production of offshore wind turbine prototypes. It is now a key component of the integrated support available to offshore wind turbine manufacturers. The fund is expected to leverage up to a further 80 million of highly mobile private investment and secure commitment from inward investors to collaborate where possible with the indigenous supply chain. POWERS underlines SE s commitment to creating a world class business environment and ensuring that Scotland is at the forefront of a globally competitive offshore wind sector. Food and Drink We will provide strong support to the industry and its leadership organisation Scotland Food & Drink (SF&D) in delivering its strategy Fresh Thinking which aims to grow turnover from 10 billion to 12.5 billion by The strategy has a particular focus on UK and international market opportunities where Scotland has competitive advantage, including premium products, health and provenance. As part of the SF&D partnership, we will lead on work to support the food and drink processing sector to improve productivity and through SDI, increase exports in key identified markets. We will continue to make a significant contribution to increase investment in innovation and support work on sustainability and UK market development. We will invest over 6 million in major projects such as the Food & Health Innovation Service; the SF&D Insights project and the National Food Forums. We will work with our public sector partners Skills Development Scotland (SDS) and Scottish Funding Council (SFC) to support the SF&D Skills Academy and with SFC and Scottish Government to develop an integrated approach to research, development and innovation. Our joint approach with VisitScotland will help food and drink companies to maximise the potential from tourism opportunities such as Homecoming, the Commonwealth Games and Ryder Cup. 17