INWARD/OUTWARD INVESTMENT IN SCOTLAND
CONCLUSIONS
119. As we were reminded, 'the 1980 Report expressed
concerns about the closures of some long-established overseas
plants, about rationalisation of multi-plant operations in response
to European integration and about the sharply-reduced inflow of
new investment from the USA. A greater emphasis on European investment
was suggested to reduce the dependence on USA enterprises. The
Report stressed the need to better understand the marketing and
product development strategies of the rapidly-changing population
of mobile multi-national companies; and to apply the tools of
planning, targeting and aftercare in formulating and implementing
market programmes. In what the Report termed 'selling Scotland',
promotion of the country's good industrial relations record was
proposed (in a UK context in which labour relations problems were
a major preoccupation of potential inward investors). It was recognised
that Scotland could not compete with the Republic of Ireland on
incentives and that greater attention needed to be paid to promoting
workforce skills, education and communications'.[187]
Concern was expressed that Scotland would become the home of too
many 'branch plants', liable to be closed down first in times
of economic difficulty. Even then, there was a fear that the climate
for attracting foreign investment was becoming less favourable.
Most of these concerns remain relevant today even though a good
deal has changed, in the wider world and in Scotland.
120. Inward investment will remain important to the
Scottish economy in the future, but given the changes in the international
environment the internal landscape in Scotland is likely to look
very different and more volatile in the coming years. Scotland's
share of global foreign direct investment, and even of the share
of it reaching the UK, is likely to be reduced. There is a danger
that Scotland will be able to compete neither with the low-labour
cost countries of Eastern Europe for assembly projects or with
the more technologically and organisationally advanced countries
for skill-and research-intensive operations.
121. We therefore agree with all those who emphasised
the desirability of moving towards encouraging higher value-added
business, especially in the software sector, though we would not
go so far as to refuse to entertain any that may still become
available. We therefore endorse the strategy adopted by Scottish
Enterprise but have made certain recommendations designed to improve
its ability to implement it.
187 HC (1998-99) 84-III, p 12. Back
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