Businesses need to start looking east
Scottish firms need to hone their e-commerce skills and tap into the opportunities Asia offers
It will take many months to refocus our relationships with Europe following last month’s Brexit vote, but despite dire predictions to the contrary, new agreements and structures will emerge in time. In the meanwhile, Scotland has a great opportunity to accelerate engagement not only with Asia but also with all Commonwealth countries.
The Asia Scotland Institute, founded five years ago, has the specific mission to equip tomorrow’s leaders in Scotland with the knowledge and skills to engage with Asia. We have a rich programme of excellent speakers, each of whom offers a route map into diverse Asian markets.
The potential benefit for Scots businesses of developing or re-opening ties with key markets within Asia are enormous. We need to find the best way of exporting Scottish skills, products and services through privately-funded initiatives working in parallel with government agencies whenever relevant.
We need to re-evaluate our long ties with the markets of India, China and other Asian countries and consider how we can leverage historic connections, especially with Commonwealth countries, and empower the many small and medium sized enterprises that make up most of Scotland’s commercial base.
In the five years leading up to 2014, Asian economies expanded at an average of 5.2 per cent. Asia’s middle class is set to reach 1.7 billion by 2020, and huge opportunities exist as a result.
Equipping people with the right skills and enabling them to grasp the full potential of the Century of Asia needs to start early. For that reason, the Asia Scotland Institute has designed programmes that start by engaging with sixth-formers as they consider what experience to gain before college or university, and then what subjects to study and what skills to acquire.
At colleges, universities, and business schools, programmes are being developed to create opportunities through bringing business and thought leaders to Scotland. We need a game changer if our companies and institutions are to compete effectively in today’s challenging world.
Scottish Development International and other agencies already work on inward investment, but above all the private and public sectors need to work together to seize the initiative here as well. Potential Asian investors should be attracted by very favourable financial incentives, access to first-class communications and a highly trained workforce. It seems we are still a long way from achieving this, despite the encouragement of greater entrepreneurship. In a highly competitive global market where there is no such thing as a level playing field, we had better wake up and get going.
We also need to address Scotland’s poor performance in the area of e-commerce. Accelerating access to international customers and open-ing effective routes to market is vital. Sharing the successes of those who have already seized existing opportunities might seem obvious but in this area Scotland lags other regions. As business journalist Colin Donald reported in 2012, a landmark survey for Scottish Enterprise showed that Scotland remains “way behind other parts of the UK in its capacity to exploit the benefits of this trade revolution”. Things have barely improved since then.
As Donald noted: “The UK is a world leader in the field – defined as goods and services sold online – which according to the ONS, grew by an astonishing 19 per cent between 2008 and 2010 in defiance of the worst economic downturn since the 1930s.”
The Scottish Enterprise report he referred to was the first official attempt to quantify the extent of e-commerce activity in Scotland which, it found, encompasses 200,000 IT and supply chain jobs, £31 billion in sales and £10bn in direct gross value added (GVA) to the Scottish economy.
The report, by analysts SQA, found that while the UK is globally number one for e-commerce, Scotland lagged far behind the South-east of England.
“Despite a decade of explosive growth, and the presence of exemplary Scottish-based firms such as Schuh, Toolstop, Black Circles and Skyscanner, so far no Scottish minister or development agency leader has publicly addressed the specialised demands of e-commerce or the lack of training in the technical, design, marketing, supply-chain management and order-fulfilment skills needed to succeed in a global marketplace”. Four years on, that remains the case.
Peter Mowforth of e-commerce supplier Indez, a long-standing campaigner for improved leadership of e-commerce within the Scottish public sector, hailed the survey as a “landmark, no-nonsense report from Scottish Enterprise that has got right to the heart of the issue”. He said: “The report’s conclusions recognise that e-commerce is the biggest thing in business today, employing double the number employed in Scotland’s oil and gas industry. Not only is it huge, it’s growing in Scotland at around 11 per cent during a recession”.
Our challenge is to focus on what can be done right away to engage with e-commerce, attract inward investment to help build our largely SME economy and awaken an entire generation to realise Scotland’s full potential. That is what we aim to do at the Asia Scotland Institute so get in touch, join up and help make it happen by going to www.asiascot.com.
• Roddy Gow is the chairman and founder of the Asia ScotlandInstitute