FOCUS: SCOTLAND - Taking the hi-tech road/Inward investment in Scotland is on the increase with hi-tech and the financial sectors enjoying huge growth. Rob Gray reports

Avid readers of Irvine Welsh’s books might be forgiven for thinking that certain parts of Scotland had fallen into a nightmare of urban decay.

Avid readers of Irvine Welsh’s books might be forgiven for thinking

that certain parts of Scotland had fallen into a nightmare of urban


Although, like almost everywhere, it has its inner city social problems

and seamier sides, for the most part times are good right now.

Last year’s massive vote in favour of devolution has created a buzz of

expectancy, while the underlying economy appears in more than reasonable

shape. At the same time, Scotland remains an attractive proposition for

inward investment. In 1996/7, Locate in Scotland helped attract 86

inward investment projects worth an estimated pounds 3.1 billion and the

prospects for further significant inward investment are still


’The underlying factors behind Scotland’s success in inward investment

will remain and probably strengthen as a result of devolution,’ says

Countrywide Porter Novelli Scotland managing director Chris Lansdell.

’One of the main attractions for companies is that land is cheap. We’ve

got a land mass roughly the same size as England with a tenth of the

people living on it. We also have a stable and well-educated


In fact, Scotland produces the highest number of graduates per capita in

the EU - worldwide only Norway and the US does better. There are 13

universities, nine specialist higher education institutions and 46

further education colleges. This has resulted in a good labour pool from

which companies can draw.

’One sector that has burgeoned, particularly in the west of Scotland, is

call centres,’ says Nevin McGhee managing director of Barkers Scotland

and chairman of the Scottish consultancies association the SPRCA. ’They

have taken off in the last year. A lot of companies have set them up

here because research shows they can get the right sort of people in

this part of the world.’

Another reason for this is that many have financial services


Scotland actually ranks third in the EU, behind London and Paris (but

ahead of Frankfurt) in terms of international funds under


A new pounds 400 million financial district known as the Exchange is

being created in Edinburgh, near the Edinburgh International Conference


Developer EICC has retained Shandwick to create awareness of the


The retail sector, often an accurate barometer of the health of an

economy as a whole, is also performing well. Mary-Jo Devlin, director of

retail PR specialist Spence Allan Associates is optimistic in the short

to medium term.

’In general terms, one can look at the retail developments going ahead

in Scotland including Buchanan Galleries, which will see John Lewis make

its Glasgow debut, the planned expansion of Princes Square in the city

and the forthcoming multi-million pound Ocean Terminal development in

Edinburgh to conclude that confidence remains very high in the Scottish

retail sector,’ she says.

One question that retailers, and some companies in other industries in

Scotland, have been addressing is one of national identity now that

nationalism is at the top of the agenda.

Safeway, for instance, is perceived as a Scottish company - even though

its headquarters are in Middlesex - as many of its key personnel, such

as CEO David Wright, are Scottish. However, it currently sources about

pounds 500 million of produce from Scottish suppliers and is looking to

increase the amount.

The conundrum for companies, such as Safeway, is how best to promote

their commitment to Scotland without damaging their reputation


’You don’t want to do anything to alienate other parts of the UK,’ says

Safeway Scotland public affairs manager Cameron Walker.

Walker, who is also chairman of the IPR Scotland Group, says that

membership of the organisation has been growing at a rate of ten per

cent a year.

He believes such confidence in the marketplace will create more

opportunities for PR professionals.

’The PR industry in Scotland is not booming, but it’s growing,’ he


’There’s a general feeling that it will grow further in the next five

years with the emergence of the Scottish Parliament.’

McGhee agrees: ’The year seems to be getting off to a hell of a flyer.

There seem to be a lot of new business opportunities out there and also

existing clients are doing more.’

Beattie Media managing director Gordon Beattie claims that January 1998

was the consultancy’s best ever month, with fee income climbing by ten

per cent. Much of this is from new business, and among the wins in

January were three ’property-related’ accounts - perhaps another

indicator of the vigour of the Scottish economy at present.

Beattie, which has offices serving Glasgow and Edinburgh, opened a

Dundee office around 18 months ago. Staff numbers there have risen from

one to four, and encouraged by this success, the consultancy intends

opening an Aberdeen office this spring. There are also plans to open in

Leeds and there is alreadya small London office.

’I’m convinced of the business case for opening a network of offices

throughout the UK,’ says Beattie. ’I’d say the Scottish economy is

really booming right now and more and more Scottish companies are

broadening their horizons.’

There are not that many independent agencies of any size in


The few that there are have been approached by English agencies without

a presence north of the border.

David Southern, head of group communications at Carnegie Public

Relations - part of Murray International Holdings - says his consultancy

has received several recent approaches from companies looking to forge


Now that the location of the Scottish parliament has been fixed and the

date of its first elections settled, there is no escaping the devolution

issue. While to the public, devolution is mainly about greater

self-determination, many companies are showing a determination of their

own to profit from the creation of another political environment.

’We’re seeing much greater effort from agencies that would historically

have positioned themselves as PR companies or management consultancies

to provide a package that includes political relations,’ says Strategy

in Scotland managing director Robbie MacDuff.

’At the moment, one sees in the marketplace a number of new public

affairs companies springing up, some of them little more than brass

plate operations,’ adds Lansdell.

Such comments evoke images of Sassenach carpetbaggers, trying to pass

themselves off as Scots in the hope of milking opportunities arising

from the new parliament.

Maybe Irvine Welsh will write a book on the subject and call it



In its role as Europe’s unofficial oil capital, Aberdeen employs the

lion’s share of Britain’s 30,000 off-shore oil and gas workers. A

further 300,000 people at over 5,000 companies spread throughout the

country work in onshore jobs, supporting and servicing construction,

operations and other needs.

According to the UK Offshore Operators Association (UKOOA), expenditure

offshore since 1991 has averaged out at pounds 10 billion per annum,

split between exploration, development and maintenance costs.

’It’s fair to say that the level of activity in the North Sea is very

high at the moment,’ says Aberdeen Press and Journal energy

correspondent Jeremy Cresswell. ’But I’d hesitate to call it a boom

because oil prices are only a fraction of what they were during the boom

of the early 1980s.’

Low oil prices have forced the industry to find ways of keeping costs

down. The introduction of the Cost Reduction Initiative for the New Era

(CRINE) has helped reduce the cost of capital projects while new

technology has enabled companies to exploit smaller pockets of oil that

were previously uneconomic.

Lobbying is going on to convince the Treasury not to increase the level

of tax on oil, which is currently one of the most favourable rates in

the world. The Offshore Contractors Association, supported by Shandwick,

leads the way.

Other major areas of communication for the in-house teams and external

advisers are internal communications, the environment and community


’The offshore part of our business is the showcase,’ says Andy Mitchell,

public affairs adviser at Amerada Hess, the third-largest producer of

North Sea oil. ’We often arrange visits for politicians, the media and

opinion formers.’

Memories of the Piper Alpha disaster a decade ago, in which 167 people

lost their lives, remain clear. Communication of safety information to

staff is now considered vital. Lorna Anderson, director of agency High

Profile, says a ’huge amount’ of her work involves using newsletters to

send safety messages offshore. Grant White, account director at Citigate

Scotland, says lessons learned are being passed on to the rest of the


’The thing about the UK oil industry is that it’s no longer just serving

the North Sea.’The expertise that has grown up in the North Sea is

exported worldwide.’

Other key issues facing the offshore industry include the further

development of the ’Atlantic Margin’ west of Shetland, which is

staunchly opposed by some environmental groups, and the difficulty in

attracting top-notch graduates into an industry which has a poor public



In December 1997, Scottish Enterprise announced that Cadence Design

Systems of San Jose, California was to establish its next generation

’system on chip’ design plant at Livingston, creating 1,895 jobs over

seven years.

Cadence is just the latest in a long line of hi-tech companies to settle

in Scotland, forming what has been dubbed the ’Silicon Glen’. According

to Locate in Scotland, the electronics industry today accounts for 24

per cent of manufacturing GDP. About 39,000 people are directly employed

in the industry with another 28,000 employed indirectly.

Semi-conductor fabrication plants alone employ over 7,300 people and

Scotland has a 13 per cent share of European chip capacity (and over 50

per cent of British capacity). Scotland is home to five of the world’s

top eight computer manufacturers. It produces 32 per cent of branded PCs

in Europe, almost 80 per cent of Europe’s workstations and 65 per cent

of Europe’s ATMs.

On the back of Microsoft’s desire to expand its activity in Scotland,

its agency Text 100, recently opened an office there.

’Microsoft recognises that it is a very important market,’ says Text 100

country manager, Scotland, Sheila Kennedy. ’We’re hoping that some of

Text’s other clients will recognise that they should have more of a

Scottish focus in their business.’

There are over 500 software businesses in Scotland and plenty of

research being carried out. Edinburgh University is the UK’s leading

research centre into IT, and is in the world’s top ten research centres

in computer science.

Agencies handling hi-tech business in Scotland include: Scribe Marketing

and Communications, Carnegie PR, Beattie Media, Countrywide Porter

Novelli and Shandwick.

’The industry is booming, but that doesn’t mean the PR opportunities are

booming,’ says Lara Bayley, managing director of Scribe. ’A lot of these

(potential clients) are new companies which haven’t grown up on the

concept that there should be PR. You have to sell the concept of a

communications strategy to them.’

Scottish Enterprise has announced a long-term strategy for

commercialising the science and technology base. The Communication Group

Scotland has been appointed to handle the campaign, known as Technology

Ventures. The aim is to encourage closer ties between financiers,

academics and the IT industry. One of its first initiatives is the

Scottish Technology Fund, set up with the support of venture capitalist

3i to provide seed capital for commercialisation.

’It is an exciting time to be promoting commercialisation as the

technology scene in Scotland is growing rapidly,’ says Julie McGavery,

managing director of The Communication Group Scotland.


There is a popular misconception south of the border that because

Scotland has roughly one tenth of the UK’s population, readership of

most UK ’national’ newspapers must be approximately ten per cent


This is far from the truth.

’The combined circulation of the English broadsheets in Scotland is less

than that of the Dundee Courier,’ says Countrywide Porter Novelli

Scotland managing director Chris Lansdell. ’There is an assumption that

good coverage in the London-based dailies will give you proportionate

coverage in Scotland. It won’t.’

Scots buy proportionately more weekly newspapers than anywhere else in

the UK. There is a strong regional loyalty among readers, which anyone

seeking to reach the whole of the country needs to bear in mind.

Although the Scotsman and the Herald lay claim to being national titles

their core markets are in Edinburgh and Glasgow respectively. While the

Dundee Courier (DC Thomson) and the Aberdeen Press & Journal (Daily

Mail) are often the papers of choice in and around Dundee and


In the tabloid market, British nationals have fared better in recent

years. The Scottish Daily Mail has quadrupled its circulation from

30,000 to 120,000, largely by assuming a more Scottish identity, while

the Sun has closed the gap on Mirror Group’s market leader the Daily


Scotland also has two highly regarded business magazines of its own,

both of which have a readership that includes many top business


CA Magazine, is published by the Institute of Chartered Accountants but

reaches beyond the purely financial; Scottish Business Insider is

independently owned.

In broadcast terms, the picture is one of consolidation. Scottish Media

group owns STV and Grampian (as well as the Herald and Glasgow Evening

Times). Scottish Independent Radio Holdings owns all of the larger ILR

stations, with the exception of Scot FM, which is in the hands of the

Independent Radio Group.

In the cable TV sector, meanwhile, competition is set to increase.

’Broadcast media in Scotland will grow fairly rapidly, especially with

the number of franchise applications put forward,’ says Medialink

Scotland consultant Clare Stephen. ’In the near future there may be up

to three times the TV stations in Scotland than there are now.’

The creation of the Scottish Parliament is also giving the news

organisations pause for thought. The BBC, for instance, has established

working parties to look at tackling post-devolution coverage.

There has even been talk of replacing the Six O’Clock News with a

programme edited and produced in Scotland, with input from network news

and current affairs.

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