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by Staff reporter
28 August 2023
Associate Feature: People, Place, Planet  and Prosperity

European Marine Science Park (photo by Raymond Hosie/HIE)

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Associate Feature: People, Place, Planet and Prosperity

Scotland retains an exceptional appeal for business, even in the face of the dramatic challenges and instability of recent years.

In June, professional services firm EY reported in its annual UK and Scotland Attractiveness survey that Scotland had outpaced both the UK and Europe on foreign investment (for the second year in a row) by securing a record 126 inward investment projects. The country is also polling at record levels of attractiveness to investors as a foreign direct investment location (FDI) outside London.

In the Highlands and Islands, dramatic advances in technology, industry and innovation are increasingly defining this progressive region beyond the core appeal of traditional sectors such as tourism and food and drink. 

Highlands and Islands Enterprise (HIE) is Scotland’s economic and community development agency for this half of the country. Stuart Black, chief executive, says that now is an ideal time to launch a new, five-year strategy for the organisation, to highlight the numerous and diverse advantages the region offers.  

The strategy was triggered partly in response to the publication of the National Strategy for Economic Transformation (NSET), which calls for a new approach to deliver a green recovery and wellbeing economy for Scotland and all its regions. HIE particularly welcomed NSET’s strong regional dimension. 

As Black points out, his agency has had unrivalled experience of delivering transformational projects and programmes to develop businesses and communities, with eight area teams providing local knowledge and service delivery in every part of the region, including all Scotland’s inhabited islands. 

And while HIE’s investment in strategic infrastructure is underpinning the growth of vital national sectors such as life sciences and renewable energy, it also addresses the challenges affecting businesses and communities across the region. High cost of living, housing, transport, skills, population and digital connectivity, are some examples.

The strategy’s vision is that the Highlands and Islands is a dynamic wellbeing economy that benefits its growing population and makes a valued contribution to Scotland, sustaining a greener, fairer and more resilient economy.

This, Black explains, will be delivered through investment in the four ‘P’s – People, Place, Planet and Prosperity. 

The People aspect focuses on entrepreneurship, leadership and management for both business and communities. It’s about skills in regional growth sectors such as energy, life sciences, food and drink, tourism and – rather impressively – space, with new spaceports in Sutherland and Shetland under construction, and another in North Uist securing planning consent. Importantly, it’s also about talent attraction and retention.

Place stresses a strong focus on the region’s different geographies and predominantly rural communities. “We’re trying to spread benefits and create wealth right across the region. Different places have distinct local economies, which reflects our community strengths, and we want to continue to support ambitions to extend community wealth building,” he explains.

“The third theme concerns our planet and the importance of making the best use of our resources in a sustainable way. There’s a particular focus on net zero including the massive opportunities arising through the likes of offshore wind and the contribution of green hydrogen.”

The outcome must be Prosperity: “That means helping businesses and community enterprises become more productive and innovative. This reflects the Scottish Government’s ten-year innovation strategy launched in June, which highlights innovation as a key tool to make Scotland a fairer, more equal, wealthier and greener country.” 

Thus, since April 2022, all organisations across the region that are applying for HIE funding have been expected to comply with the Fair Work First criteria. This principle has now been extended to contractors in the applicants’ supply chain.

“We’re shifting the dial from what has in some cases been a low-wage economy to a more productive, prosperous one, including creating dynamism across the region.

“Sustainability, of course, both underpins and opens many of these opportunities. Projects in development from Shetland to Argyll, and the Outer Hebrides to Moray, could deliver hundreds of jobs and millions in GVA in areas that take in offshore wind, green hydrogen, marine energy, marine biotechnology and life sciences.”

The year began auspiciously with the announcement that Inverness and Cromarty Firth had, with Forth Ports, been selected as a site for one of Scotland’s two new green freeports. This, says Black, was the result of the collaboration of more than a dozen organisations representing industry, academia and the public sector around Easter Ross and Inverness. He believes the project will bring significant benefits to the whole of the north of Scotland.

HIE is also planning to invest £2.8m in a £14m R&D spend by Ross-shire Engineering Limited in Muir of Ord and Inverness, which will more than treble the company’s turnover and further its ambition for the region to be a centre of excellence for sustainable water treatment technology.

Black is particularly pleased with the prospects for offshore wind, and the next generation, floating offshore wind. “We’re already in talks with Sumitomo Electric, the Japanese company that manufactures the cables that connect offshore wind turbines. Their interest in the region demonstrates the confidence investors clearly have in our vision for a net zero economy.”

Black made a recent trip to Kishorn in Wester Ross where there are proposals for building big structures for floating offshore wind and for undertaking oil and gas decommissioning. It’s also where the Noble Intrepid, one of the largest offshore self-elevating (jack-up) rigs in the world is undergoing maintenance. 

“Faroese company Bakkafrost is building a new hatchery and smolt growing facility there, so you have new activity on a huge scale in the area. We’re constantly reminding people that big, exciting things are happening in our region,” he says. “For example, the UK’s two biggest food and drink exports are whisky and salmon with the bulk of the value added coming from the Highlands and Islands.”

Emphasising this, Macallan owner Edrington reported in June sales that broke through the £1bn barrier while also posting a 43 per cent per cent surge in pre-tax profits – in an industry that exported a record £6bn worth of whisky last year.

Overall, HIE investment in business and social enterprise created or retained around 1400 jobs last year with average salaries of around £35,000. “That means higher value jobs in the region, with more than ten per cent in what are classed as fragile areas.”

HIE’s five-year strategy will also see the agency continue to provide business infrastructure to grow ventures such as ORIC, the Orkney Research and Innovation Campus. This joint venture by HIE and Orkney Islands Council is supporting growing research and innovation activity and the expansion of companies working in the region’s world-leading marine renewables, energy and low carbon sectors.

The European Marine Science Park (EMSP) in Oban, developed by HIE, is supporting marine science research and the blue economy with more than 100 scientists and 12 marine organisations on site. And the Enterprise Park Forres, another HIE development, provides a wide range of business space extending over 100 acres.

In the capital of the region, the £110m Inverness Campus led by HIE brings together businesses, researchers, academia and scientists working in life sciences, digital healthcare and technology.

“Innovation is fundamental to economic success and we want to ensure that our companies can access the best advice and support,” says Black, adding that HIE also provides advice and services to help companies grow and encourages others, such as the Scottish National Investment Bank (SNIB) for example, to invest. 

A compelling example of that last year was Moray-based sustainable rocket manufacturer and satellite launch provider Orbex which currently employs 100 at Enterprise Park Forres and plans up to 12 orbital satellite launches a year from Sutherland Spaceport. The company raised £40m including £17.8m backing from SNIB, which led the funding round.

More traditional sectors continue to make a major contribution to the economy. Tourism is central to the region’s way of life, sustaining many local, regional and island economies and communities. However, the sector was one of those hit worst by the pandemic.

While successes include projects such as the North Coast 500 scenic route, which attracts thousands of visitors every year to Caithness and Sutherland, and the UK’s first rewilding centre at Dundreggan in Glenmoriston, the sector also has its challenges. 

“One of the major issues here remains housing availability – particularly, but not only, affordable housing,” Black explains. “We’ve been supporting several hotels with investment in staff accommodation as hospitality has been affected by labour shortages. 

“In some ways the situation has been turned on its head: in the Outer Hebrides for example there used to be insufficient jobs and people were leaving the islands; now there are plenty of jobs and we need more and more people to fill them.”

Examples of this include life sciences firm, BASF Pharma, which currently employs around 80 people in rural Lewis. With HIE support the company is continuing to grow.

Through working in partnership with others to deliver for the region and Scotland, Black is confident that over the next five years HIE will achieve its objectives while supporting communities across the region with their assets and social enterprises, to provide essential services, grow prosperity and plan a sustainable future
“I’m very reassured by the dynamism across the whole region and by the diversity and resilience of its businesses and communities. There’s a real can-do approach – and it’s a very exciting place in terms of things happening now and to come.” 

This article is sponsored by Highlands and Islands Enterprise (HIE)

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