Highlands and Islands Enterprise: fit for the future

HIE chair Professor Lorne Crerar - Image credit: Highlands and Islands Enterprise

Highlands and Islands Enterprise (HIE) was originally set up in 1965 as the Highlands and Islands Development Board (HIDB) to deal with the ‘Highland problem’ of migration away from the region.

Fast forward half a century and HIE has achieved much of what it was set up to do – but that doesn’t mean it’s resting on its laurels.

Having recently celebrated its 50th birthday, it continues to pursue new opportunities to help the Highlands and Islands grow and prosper.

During the 50-plus years that the organisation has been in existence the region’s economy has been transformed.

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In the 1960s the main employment opportunities were in the traditional industries of farming and crofting, fishing and timber, and getting Highers to go to university meant leaving for the Lowlands or further afield.

Now, the area is punching above its weight economically. Covering half of the land mass of Scotland, but with just nine per cent of the population, it has 20 per cent of the country’s social enterprises.

The region has enjoyed lower unemployment than either Scotland or the UK as whole since before the recession, and its population has grown by 22 per cent since 1965 – more than seven times the Scottish rate of three per cent.

“HIE in its current form, HIDB then, was set up to resolve the Highland problem and create a place of opportunity, and it actually, demonstrably has,” explains HIE chairman, Professor Lorne Crerar.

“So the figures you see demonstrate that over that period even things like population and age demographics are much, much better.

“We have, comparatively, the highest growing population in the whole of Scotland, and, as you’ll see, employment opportunities have been transformed.

“So now the challenge for HIE is to make the most of the very significant opportunities that exist in order to build on the region’s attractiveness as a place to live, work, study and invest.”

Tourism, food and drink, creative industries, energy, life sciences, business services and higher education are now all significant growth sectors, fuelled by improved infrastructure and long-term investment and development.

Given the natural resources of the region, renewable energy presents clear opportunities. 

Both the European Marine Energy Centre (EMEC) in Orkney, and HIE subsidiary, Wave Energy Scotland, are recognised as world leaders in their field.

One example of a recent success story is CS Wind, a Korean firm that last year acquired Wind Towers Scotland in Machrihanish, Argyll, injecting £27m investment and creating and sustaining 260 jobs.

This follows 12 to 14 years of involvement and investment by HIE, the Scottish Government and SSE in Wind Towers Scotland to attract just this type of inward investment.

“It was very speculative at the start,” says Crerar, “but now it has paid off with the real job opportunities that it’s created for Kintyre, which really needed support to create opportunity for people who want to live, work and prosper there.

“So that’s a very good example of a calculated risk that has benefited that part of the Highlands and Islands.”

Another recent announcement has been the £2.5bn Beatrice offshore wind development.

This is expected to create 890 jobs in construction with benefits for supply chain companies and fabrication yards at Arnish, Wick and Nigg, which themselves have benefited from HIE support to have them ready and suited to exploit a range of emerging energy opportunities.

However, it’s not just the energy sector that is powering ahead. Canadian wood products manufacturer, Norbord, is investing nearly £100m in Inverness, with a HIE contribution of more than £11m.

And the stunning environment of Inverness Campus is providing a significant collaboration hub between research, education and business, with major future development planned in the life sciences.

Seventy of Scotland’s 640 life science organisations are in the region, supporting 1,800 jobs, 1,100 of which are with LifeScan Scotland, an early investment by HIE that originally promised only 200 jobs.

This will increase as plans for Inverness Campus come to fruition. These include NHS Highland’s elective care centre for orthopaedics and ophthalmology and the University of the Highlands and Islands’ School of Health and Life Sciences.

With £4m backing from HIE, this will increase research capacity in specialisms such as remote and rural health, digital health and diabetes.

More than 600 people currently work at Inverness Campus, including staff of HIE itself, Inverness College UHI, the University of the Highlands and Islands, Scotland’s Rural College, Scottish Development International, the Scottish Manufacturing Advisory Service, and commercial operators, Aqua Pharma and Scottish Vet Referrals.

Other initiatives are promoting the benefits of digital technology and education and careers in science and engineering.

With many further developments in the pipeline, the employment figure for Inverness Campus is expected to rise to 1,300 within five years, with another 940 jobs across the region linked to it. 

HIE has a longstanding commitment to expand university teaching and research in the region, and the University of the Highlands and Islands is now well established and growing.

Other institutions such as Robert Gordon University, Heriot-Watt University, the universities of Aberdeen and Stirling and Glasgow School of Art are also strengthening their presence.

As well as increasing the higher education offering, such initiatives are helping to attract and retain many young people.

This in turn contributes to the creation of vibrant and sustainable communities, another important part of HIE’s remit.

“HIE inherited a unique remit, which is not just about how businesses drive economic development but communities too, and that’s been very successful,” says Crerar.

“It ensures that our more fragile communities – mostly on the periphery of the north and west coasts and our islands – are given the opportunity to sustain and have a prosperous future.”

Fundamental to every aspect of regional development are the massive improvements being made in digital connectivity.

HIE’s vision is for the region to be a place with competitive, entrepreneurial and internationally ambitious businesses, and for every business to be digital, with a skilled workforce to match.

Broadband and mobile access play a very significant part in that. Thanks to Digital Scotland and HIE investment, next generation broadband coverage is currently at 82 per cent, targeted to reach around 86 per cent by the end of 2017.

That’s more than four times the total level that would have been reached through commercial rollout alone.

Crerar says: “As the rollout has happened, there are lots of positives for those who have got it. Clearly there’s a very strong voice for those who’re not going to benefit so quickly in this first rollout.

The Government’s aspiration is to have 100 per cent connectivity by 2021 and that will happen, but for us at the moment, we’re in a much better place than we were.

“Mobile connectivity is just as important, and there’s a lot being done on that at the moment. As somebody who lives half my time in Gairloch, improved digital connectivity is really important to me and I can see how important it is to everyone else.

But a key focus of HIE is to deliver this huge step-change on digital connectivity, because the truth is that will be one of the changing dynamics to drive growth for the Highlands and Islands.”

HIE is an organisation that has “a lot of cultural love around it”, says Crerar.

This is evident from the concern expressed when the Scottish Government announced its intention to merge the boards of Scotland’s enterprise and skills agencies.

“The outpouring of care for HIE has been fantastic. This is because I believe HIDB and its successor, HIE, has been an immensely powerful force in the Highlands and Islands, not just for economic and community development, but for bringing our businesses, communities and the public sector together to work in a common way, because everyone wants the best for our region,” says Crerar.

“There’s a common theme that everyone feels part of the Highlands and Islands and wants it to be even better than it is.

And I think part of the strength of HIE is being part of these forces, working with them on that common theme of getting more and more people to live, work, study and invest in the region, and I strongly believe it has worked.”

The HIE board has spent time identifying its essential features that are critical to the success of the organisation, in order to ensure these are replicated in any new governance arrangements.

HIE’s principal purpose is to implement Scotland’s economic strategy in the region by allocating its budget to strategic regional and national priorities for the benefit of the whole region.

Engagement with stakeholders and the development of the trust of the communities are key elements of that.

Crerar explains: “Because we’ve fulfilled our role of engaging with businesses, communities, public sector stakeholders and others so successfully over so long, it means that we’re able to develop a trust and respect with the very different economies and those that are involved in them across a very big region.

“HIE is often able to act as an intermediary between competing interests from different economies.

“Because of the way we engage with business, and with communities, many stakeholders will feel a sense of ownership of the organisation.

“The board is a key part of that. That is why we are fully engaged with the Scottish Government in its Enterprise and Skills Review with the aim of making sure that any new arrangements take account of the important roles that the HIE board has had and that these are maintained and hopefully enhanced.”

With strong roots in Gairloch, and as one who spends as much time there as possible – and he says he would rather live in the Highlands than anywhere else in the world – Crerar’s enthusiasm goes well beyond the purely professional.

“During my term as chairman I have had the great pleasure of meeting hundreds of businesses, communities and stakeholders across our large and beautiful region.

“For me, many of these experiences have been truly inspiring and one of the reasons why I feel such passion for HIE and the people that work within the organisation.

“I think it’s just an absolute privilege to be its chairman because it does so much good for the region and the country,” he says.

“And it really is a privilege. I absolutely mean that. It’s a great organisation.”

He adds: “Being chairman of HIE is simply being a custodian of an iconic institution for a short period.

“I am utterly determined that when I pass it on we’ll be in better shape with even more opportunities for the future.”