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Linklater's Scotland:
once a nation of adventurous entrepreneurs
Magnus Linklater
Columnist, Scotland on Sunday
This article, which
was originally published in the Spectrum section of Scotland on
Sunday
on 15th May 2005, is reproduced on Land-Care with the kind permission
of the author and the newspaper
Filed 16 May 05
"WHAT,” demands the man with the silvery
hair and pinstriped suit, “are we going to do about Scottish
business? Here we are, six years into devolution, and what have
we achieved? Where is this smart, successful Scotland we were all
meant to be talking about? Where are the entrepreneurs, the new
companies, the big risk-takers? Who's creating the wealth of the
nation?” He looks around at a roomful of loudly chatting, cheerfully
eating, prosperous-looking folk. “What,” he asks, “is
keeping them all afloat?”
It is a good subject for a boardroom chat, but
an inauspicious one for a magazine article. This kind of thing is
best kept firmly locked up in the business pages, where commentators
can wax serious about GDP, R&D, labour productivity levels and
high-growth business start-ups. Except that it won't stay there.
It is the skeleton in Scotland's closet, the ghost
in the attic, the boring stranger at the party who refuses to leave.
Politicians do not like talking about it, because they do not understand
it any more than the average voter does. It scarcely raised its
head during the election. It is, nevertheless, the single most important
issue facing the country.
The statistics are dramatic and depressing. Scotland
is averaging a growth rate of 1.6%, compared to 2.7% for the rest
of the UK. This amounts to about £1 billion pounds a year
we are failing to make, and places us down near the bottom of the
European league table. Look through the recruitment pages of the
newspapers and almost all the careers on offer are in the public
sector rather than in private companies. Nationally, more than half
of all salary-paying jobs are in public services, compared to 42%
in England. What that means is that the best prospects, the most
security, the highest guarantee of pensions for young graduates
are in careers funded by the taxpayer. For the more adventurous,
the ones who want to build wealth rather than benefit from it, opportunities
are likely to be sought elsewhere.
While a small country like Ireland has ploughed
its EU subsidies into creating one of the fastest-growing economies
in Europe, Scotland has poured its own generous UK funding into
not very successful public services. As one top Scottish businessman
said gloomily the other day, “We're trying to be like Estonia
used to be, just as the Estonians are managing not to be like Estonia.”
He added one other, sobering statistic. “If you take oil out
of the equation, we take £9.3 billion from the Treasury, but
only put £4.5 billion back. So we're just not paying our keep.
How long can we go on like that?”
What happened, then, to our great entrepreneurial
tradition, the small businesses determined to become tomorrow's
giants, the hard-headed ambition that can turn bright ideas into
world-beating companies? In short, where is the energy and inventiveness
that once made Scotland the engine-room of the industrial revolution?
The answer, I thought, should lie in Livingston.
Not perhaps the most beautiful town in Scotland - a place of concrete,
glass and more roundabouts per square mile than anywhere else I
know - but one which was once said to be the capital of silicon
glen; this was where, in the great electronics explosion of the
1980s, big multinational companies such as NEC, IBM and Motorola
came to set up shop, and where, presumably, a generation of young
entrepreneurs should have learned their trade, picked up ideas and
launched their own companies.
Twenty years on, however, the multinationals have
packed up their tents and moved on. Scotland, it seems, was a good
place to do business for a time, but it was never more than an assembly
plant for global operations. When the going got tough, the big names
pulled out. What, if anything, have they left in their wake?
The answer, if there is one, should be found at
the Alba Centre, set up with the enthusiastic backing of government,
the universities and Scottish Enterprise to spawn a new generation
of world-class companies. I went there in the aftermath of yet another
setback: Cadence, the electronics company for which much had been
expected, had just announced more job losses in its design department,
the very area where most growth was once expected.
The office building seems strangely empty, echoing
perhaps with the heady promises once made for it. But it does not
mean that this is a lost cause - far from it. An hour spent talking
to David Srodzinski, a young Welsh engineer now domiciled in Scotland,
and Steve Wood, his Scottish partner, tells me more about the opportunities
ahead for Scottish business than I have learnt from any number of
Scottish Executive reports. Their company, Elonics, deals in the
cutting-edge of chip design, offering a range of services and products
worldwide in one of the most competitive industries anywhere.
It is young, it is small, but in terms of ambition
and hard commercial realism it cannot be faulted. From a standing
start last November, it is now booking orders of close to £1
million, and it has an order book of double that for the next financial
year. But the figures are less important than the attitude. What
both men seem to have grasped is the clear view that, to succeed
in today's global markets, what you need is not just a world-class
product, but the means of selling it.
Undaunted by the competition, they positively
welcome it. Their ambition to succeed seems to be matched only by
their hard-headed realism about selling and how to do it. “You've
got to understand the value of what you are offering, the commercial
side of the enterprise,” says Srodzinski.
“You can't progress by sticking yourself
away in a room, designing some product and expecting it to suddenly
appear on the world market. You have to start off by building relationships
- this business is about people. It comes back to selling, trading,
being fair and all the things that encourage people to buy - it's
not just about some whiz-bang gadget.”
He stops and thinks for a minute, then adds, “You
may think your assets are your brain-power and your technology,
but when you're in this business you realise that the key assets
are the people you know, your networks, everything you need to get
your business off the ground.”
All this talk about markets and selling and building
business networks is - dare I say it - rather un-Scottish. But Wood
goes further. He thinks that if you are confident enough about the
need for your product, going global is easy. “In the Scottish
context, it is quite easy to be unambitious, to aim low. But in
the world context, in the semi-conductor business, it's easy to
aim high. You have to convince people you have a good idea, but
if you can do that, the capacity to produce it is there at the end
of a telephone. What you need is product-definition, timely execution,
then networks and customers around the world.”
Elonics, like a handful of other companies, has
benefited from support and business contacts supplied by Scottish
Enterprise, the government agency whose track record has been uncertain
in the past, but which now realises that giving new businesses access
to global markets is just as critical as seed-funding.
Breeding Elonics-type companies, educating a new
generation of young Scots to think as globally and as ambitiously
as it does, will, however, take more than just pump-priming here
and there. It will take a sea change in attitudes, a creative surge
as dramatic as anything since the industrial revolution, and a hard-headed
realism that has to start from the top to the bottom of government
and the civil service - to say nothing of our schools and universities.
Unless we place this issue right at the top of
the national agenda, we will fail, both economically and socially.
We need a debate about this, and we need it now.
©Magnus Linklater
This article:
http://scotlandonsunday.scotsman.com/spectrum.cfm?id=521592005
Earlier articles in the series
 1.
Linklater, Magnus (2005). Linklater's Scotland. Scotland on Sunday
20th March 2005
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 24 Mar 05,
www.land-care.org.uk Click
Here to View
2.
Linklater, Magnus (2005). Linklater's Scotland - Easter in Easterhouse.
Scotland on Sunday 27th March 2005
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 31 Mar 05,
www.land-care.org.uk Click
Here to View
3.
Linklater, Magnus (2005). Linklater's
Scotland - Farming. Scotland on Sunday 3rd April 2005
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 07 Apr 0505,
www.land-care.org.uk Click
Here to View
4.
Linklater, Magnus (2005). Linklater's
Scotland - Pitlochry. Scotland on Sunday 10th April 2005
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 15 Apr 05,
www.land-care.org.uk Click
Here to View
5.
Linklater, Magnus (2005). Linklater's
Scotland - Supermarkets. Scotland on Sunday 17th April 2005
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 19 Apr 05,
www.land-care.org.uk Click
Here to View
6.
Linklater, Magnus (2005). Linklater's Scotland - Kelvingrove. Scotland
on Sunday 24th April 2005
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 29 Apr 05,
www.land-care.org.uk Click
Here to View
7.
Linklater, Magnus (2005). Linklater's Scotland - Scottish regiments.
Scotland on Sunday 1st May 2005
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 05 May 05,
www.land-care.org.uk Click
Here to View
8. Linklater, Magnus (2005).
Linklater's Scotland - Pete Irvine, impresario. Scotland on Sunday
8th May 2005
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 13 May 05,
www.land-care.org.uk Click
Here to View
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