THOSE who seem to delight in portraying Scotland as weak, or even a basket case, on the business and economic front have surely faced a most inconvenient few weeks.
Often, of course, this narrative of weakness goes hand in hand with a strident constitutional view. And, truth be told, those who develop and espouse it have been ignoring the hard evidence throughout.
It is in most circumstances unwise to expect a change of heart from the politically entrenched even in the face of a raft of compelling evidence that should, objectively speaking, shake their firmly held and sometimes noisily expressed opinions about the economy and business climate in Scotland.
For the rest of the population, regardless of any constitutional leanings, the good news has kept on coming this week with the revelation in a survey published by accountancy firm EY that Scotland won a record number of inward investment projects in 2022.
This came hard on the heels of separate figures from Scottish Development International showing very strong employment gains from foreign direct investment (FDI) projects attracted in the 12 months to March 2023.
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And it followed official data showing the economy in Scotland grew at four times the pace of that in the UK as a whole in the first quarter of this year.
Of course, none of this is to say Scotland does not face significant challenges, particularly given the weak overall UK economic backdrop and specific damage inflicted by the ruling Conservatives such as that from Brexit and austerity.
However, success against such a difficult backdrop is all the more commendable.
The EY survey showed that, in 2022 as well as in 2021, Scotland outperformed the UK as a whole significantly when it came to progress on the FDI front, which is quite a feat given the strength of London in this arena.
A record 126 inward investment projects were secured by Scotland in 2022, up from 122 in 2021, maintaining the nation’s position as the top UK location for FDI outside London, according to the EY survey published on Monday.
The 3.3% rise in the number of projects secured by Scotland was in stark contrast to a 6.4% drop in the UK as a whole. UK-wide, the number of FDI projects won fell from 993 to 929.
Scotland had achieved a 14% jump in the number of inward investment projects secured in 2021, way ahead of a 1.8% increase for the UK as a whole.
Some might justifiably view Scotland’s dramatic outperformance of the UK as a whole over 2021 and 2022 as quite something, particularly given the volume of the doomsayers north of the Border and the danger that overseas investors might become spooked by a loud downbeat narrative, albeit a false one.
The UK, in 2022, trailed Europe as a whole significantly when it came to progress or otherwise in attracting inward investment projects. Europe recorded a 1% increase in the number of FDI projects secured last year, the EY survey showed, and it also outperformed the UK significantly in 2021 with a 5.4% rise.
This might come as a surprise to those who have been beguiled by the tall tale, touted by the Tories, that Brexit has made the UK some kind of powerhouse on the international stage. Patently it has not.
This week’s EY survey also showed Scotland set a new record in 2022 for its share of the inward investment projects won in the UK, at 13.6%. This was up from 12.3% in 2021 and 11% in 2020.
And the survey found 19.2% of investors considering FDI locations intend to establish or expand operations in Scotland in future. This is another all-time high for Scotland, and a striking figure.
Edinburgh and Glasgow ranked as the first and second cities outside London for planned investment over the next year, the survey revealed.
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Digital technology and utilities, including renewables, featured prominently in FDI wins for Scotland last year. And manufacturing FDI in Scotland was at its highest in a decade. The sectoral make-up of the projects looks encouraging.
Back in the 1990s, there were fears that the likes of large-scale call centre projects attracted to Scotland through inward investment by overseas players were a bit too mobile. And we have in recent decades seen major overseas-owned electronics plants close, albeit these did provide valuable employment for long periods prior to their demise.
READ MORE: Scotland achieves inward investment record, trounces declining UK
Nowadays, much FDI activity is thankfully based on highly sought-after skills possessed by Scotland’s workforce and the strength of the nation’s universities, with decisions crucially not driven by cost. By its nature, such inward investment will hopefully be stickier, even in tough times.
SDI, Scotland’s FDI and trade promotion agency, has over the decades in its current and previous forms played a crucial role in attracting overseas investors in key sectors to Scotland, and making the most of the nation’s strengths. This job has obviously been helped by all that Scotland has to offer, and its distinctiveness in a UK context.
While London remains the UK’s most attractive location to future investors, the latest EY survey showed Scotland is still firmly in second place.
The survey revealed that 11% of investors rate Scotland as the most attractive place to establish operations in the UK. EY noted this was down from a record high of 15.8% in its Scotland attractiveness survey published last year but that it was higher than the nation’s pre-pandemic score of 7% in 2019.
Anyone looking for something disappointing in the EY survey might seize upon this decline from 15.8% to 11%. However, the overall strength of Scotland’s showing is the important thing. And we must remember that Scotland is still behind only London in the league table of the UK’s most attractive locations for inward investment, for all the Conservatives’ Northern Powerhouse efforts to boost the north of England.
EY Scotland managing partner Ally Scott said: “Scotland put in another powerful performance on FDI in 2022, securing record inward investment projects and UK market share.”
Official figures published on May 31 showed Scottish gross domestic product in the opening three months of this year was up by 0.4 per cent on the fourth quarter of 2022. UK GDP grew by only 0.1% quarter-on-quarter in the first three months of 2023.
The SDI figures on FDI published earlier this month showed inward investment projects won in the year to March 31, 2023, are expected to create the highest number of planned jobs secured from such activity since the 2018/19 financial year.
A total of 8,533 jobs were created or safeguarded through inward investment in 2022/23, the SDI data showed, up 9% on the previous year.
The figures combine FDI projects supported by SDI, Scottish Enterprise, Highlands and Islands Enterprise, South of Scotland Enterprise and Skills Development Scotland, with the jobs data based on the plans of the companies investing.
Surely the objective views of overseas investors - which put up money rather than just run their mouths like some political activists do with their foolish portrayal of Scotland as a basket case - are a compelling indicator when it comes to assessing the nation’s economy, business climate and skills.
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