It’s hard to avoid conversations in business circles on the recent findings by Interpath Advisory, which highlighted the steep rise in Scottish businesses entering administration to levels not seen since before the pandemic.
Firstly, the increase in administrations is a significant signal, not merely of distress but also of a transitioning economy, and these indicators should mobilise us towards strategic interventions that can turn the tide.
What’s needed now is not just resilience, but a proactive leap forward to drive investment from further afield.
That, however, is proving difficult. Recent data from Experian shows a fall of international investment in Scottish enterprises. Analysis on the report by Wright, Johnston & Mackenzie LLP shows that, in 2023, the number of Scottish businesses involved in overseas deals dropped significantly, from 36 in 2022 to just 23.
This decrease not only reflects a loss of confidence, but also highlights a centralisation of investment in London and the South East, which now attract 42 per cent of all UK deals. This disparity underscores the necessity for Scotland to enhance its appeal to both domestic and international investors.
Combined, these figures paint a bleak picture, but there is a glimmer of light from the proposed Inverness and Cromarty Firth, and the Forth Green Freeport. These green freeports and investment zones might be the key to offering a compelling solution to these pressing issues.
Freeports – special economic zones free from some normal tax and tariff rules – have the potential to become hubs of enterprise, innovation, and international trade. Establishing these zones, we can offer compelling incentives for businesses, including reductions in bureaucracy.
This is not a new idea. Built environment experts Mace Group estimate that there are 3,500 Freeports worldwide, employing 66 million people. However, the types of Freeport vary significantly, but there is no reason the UK can’t pick out the best aspects from the many tried and tested examples, and tailor each to suit the needs of the area and their current and future goals.
Similarly, Investment Zones provide targeted benefits designed to serve as catalysts for regional development, offering tailored incentives like tax reliefs, planning simplifications, and support for innovation and growing industries that the region can nurture.
These zones can stimulate trade in areas that have gone far too long without appropriate investment and opportunity, balance regional inequalities, and, more importantly, signal to the international community that Scotland is not only open for business but is a prime location for forward-thinking investments.
I echo the comments coming from Wright, Johnston & Mackenzie’s managing partner Fraser Gillies. Scotland must accelerate the development of freeports and investment zones. These zones could serve as beacons of growth, providing the necessary infrastructure and environment conducive to business success.
As we look towards implementing these initiatives, it’s also crucial to focus on inclusivity and sustainability. Freeports and Investment Zones should not only aim to boost economic growth, but ensure that this growth is sustainable and beneficial to all sectors, adaptable to changes in the market and not dependent on the hype of the day.
By incorporating green technologies, fostering start-ups, and encouraging industries that align with global economic trends such as digitalisation and sustainability, Scotland can pave the way for a more robust and diversified economy.
The dual challenges of rising business administrations and falling foreign investment are not merely hurdles, but opportunities to rethink and reshape Scotland’s economic strategies. By embracing the potential of Freeports and Investment Zones, we can transform these challenges into catalysts for growth and innovation.
Of course, it was unsurprising to see that the Scottish Greens were the only party to have voted against corporate tax breaks associated with the establishment of Scotland’s Freeports. However, the time for bold, decisive action is now and, as a public voice, we must rally to make Scotland a vibrant, attractive location for global business.
Let’s make these zones the cornerstone of our economic revival and a testament to our commitment to a prosperous, dynamic future.
Branch closures raise questions over accessibility and progress
I was left torn by the news the Royal Bank of Scotland is set to close a fifth of its Scottish branches.
On the one hand I understand the decision. With less people doing their banking on the high street every year in favour of online services, it makes sense to stay ahead of the curve and cut costs where possible.
However, while the demand may not be widespread as it once was, I feel for the people and businesses who still rely on their local branch.
Those who live and work in communities such as Bathgate, East Kilbride, Helensburgh and Largs now face the decision of travelling to their next nearest branch in a neighbouring town or making the move online.
The trend of internet banking, you imagine, will only continue until there are a small cluster of banks remaining.
Some will say you can’t halt progress, but I ask is it progressive to further isolate people and leave local commerce further hamstrung?
On top of that, 105 jobs will be lost as RBS plans to close 18 of its 86 branches across the country.
The bank has pledged to invest £10m in its 69 remaining branches, at least, but that will come as little consolation to those at the sharp end of this news.
As ever, big business will be fine, but what of the elderly, those unable to travel far and, of course, entrepreneurs running small businesses?
It Made Me Laugh
Sustainable praise and tourist stress in Auld Reekie
It really speaks to the Scottish psyche that within days of Edinburgh being named one of the most sustainable holiday destinations in Europe, we also saw the Royal Mile slammed.
The iconic street has been named Scotland’s ‘most stressful tourist trap’ by online language learning marketplace Preply. Their research also features Edinburgh Castle.
I hope the Edinburgh tourist board has been paying attention to these two polarising news stories and see it as an opportunity to talk up the capital’s credentials.
Yes, the Royal Mile can be overwhelming, but we need to go against our dour DNA and scream from the top of Arthur’s Seat about why Auld Reekie is a fine place to visit.
For Scotland’s tourist economy to remain sustainable, the capital needs to be making gains.
It Made Me Weep
A quarter of Scots never exercise – and it’s showing
I find there’s nothing better than a good workout to clear my mind, nourish my body and help me focus on my goals.
The creativity and resilience that comes with keeping fit is something I transfer into the business world, so I was in a sweat when I heard an alarming statistic about the state of the nation.
The Observatory for Sport in Scotland has published research which says 25 per cent of Scots never do any exercise.
The divide between gym goers and couch potatoes is widening and economic factors are a key driver behind that.
For a healthy nation, physically and economically, decision makers need to chew the fat and find a solution to this growing problem.
