Scotland’s salvation will be in foreign trade
 AlasDAIR Kerr, Managing Director of SCI.
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By HARRY McGRATH
EDINBURGH – A recent headline in one of Scotland’s newspapers caught my eye. “The nation’s salvation,” it declared, “will be in foreign trade.” It appeared above two letters to the editor – one analysing the importance of exporting for Scotland’s economic prospects and the other appealing for a “more focussed strategy” to help companies that want to break into foreign markets.
The idea that a small country with a limited internal market can flourish by looking beyond its shores is not new, but salvation is a strong word.
No matter what sense you use it in, its opposite is never good. And there has certainly been a sense of impending doom here with talk of spending cuts, delayed cuts, and double cuts when they finally arrive. Salvation through foreign trade is as appealing as it is timely.
Export performance is notoriously difficult to gauge. Scotland’s exports showed a slight growth for the last two quarters of 2009 but, according to the Scottish government data, fell 10 percent on the year.
Recently a London-based financial firm contradicted this and declared that Scottish exports actually rose 13.4 percent in 2009. Commentators are also divided with Scotland’s exporting performance described as “the best in the UK” or “dismal” depending on who you choose to believe.
However, there are some things that are certain. Scotland was once a producer of coal, cars, steel and ships for domestic and foreign markets and it no longer is. It now exports whisky and salmon in vast quantities.
One report says that salmon exports rose (no pun intended, apparently) by 25 percent in 2009 to the point where the market had difficulty keeping up with demand. Another finds that whisky, which already represents 20 percent of Scotland’s manufactured exports, exported an incredible 807.5 million bottles in the first nine months of 2009.
This success at the top end has masked the fact that small and medium sized companies in Scotland have been slow to break into foreign trade.
Only one in three of Scotland’s SMEs are exporting. Those that are not cite various obstacles including a perceived lack of expertise, language barriers particularly in emerging markets, and the absence of a central resource that can help them in Scotland.
Help is now at hand. The international divisions of Chambers of Commerce across Scotland have come together to form Scottish Chambers International and a delivery arm called Intelligent Exporter.
The initiative is supported by a European Social Fund grant of £3.4 million (the highest ever acquired in Scotland) and will provide specialist training, consultancy, business market support, on-line services and a national helpline.
The European grant was acquired by SCI Managing Director Alasdair Kerr who explained to me his vision for the project:
“International trade offers significant business development opportunities for Scottish businesses. International markets and global opportunities will allow Scotland to recover from the current challenging trading conditions at home.
“Many small to medium-sized businesses that are considering international trade for the first time are naturally cautious about investing significant amounts of time and money in developing new market opportunities. Support from the European Social Fund ensures that more tailored support is given to a wider range of companies with real export potential.”
The Scottish Government was quick to recognize the potential benefits of SCI/Intelligent Exporter and has match-funded the project. I asked Scotland’s Enterprise Minister Jim Mather for his reaction and he echoed Kerr’s sentiments:
“It is vital in the current climate that we support initiatives which will make the maximum possible contribution to helping Scottish firms, particularly those that can transform businesses and help them grasp opportunities presented by the global economy.
“The Intelligent Exporter will provide specialist support for small and medium-sized businesses which are considering international trade for the first time. It has the potential to boost levels of Scottish exports overseas and support employment right here in Scotland.”
In all of this, there is a natural tendency to focus on emerging markets though that doesn’t mean that traditional ones should be neglected.
Trade between Scotland and Canada has been in decline despite the oft-explored historical and contemporary connections between the two countries and SCI can provide the impetus that is needed to revive it.
The Vancouver Olympics and Paralymic Games showed what is possible. They were powered by Glasgow-based temporary energy company Aggreko. Watch the advertising signs around the fields at 2010 FIFA World Cup in South Africa. Aggreko is there too.
[More information on Scottish Chambers International and Intelligent Exporter is available at www.scottishchambersinternational.co.uk.]
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