N-56 calls for new export strategy

Scots urged to build trade beyond rest of UK or slip behind other small nations

Scottish exportsScotland needs to reduce its reliance on trade with the rest of the UK to avoid slipping down the table of exporting nations, according to a new report.

Business organisation N-56, whose aims is for Scotland to become one of the five wealthiest countries in the world, says two-thirds of Scotland’s trade is with the rest of the UK and that its exports trail other advanced countries of a similar size, defined as 18 countries with populations of less than 10 million. These include Denmark, Ireland and New Zealand.

N-56, founded by property tycoon Dan Macdonald, says Scotland is missing out on £77 billion of trade and is calling on the Scottish Government to work closely with business to put exports at the centre of its economic strategy which will be unveiled next month.

In the latest in a series of papers, N-56 says Scotland’s trade volumes would need to increase by 41% to match the average for small advanced economies (63% if oil and gas exports were excluded).

The report notes research carried out by Scottish Development International in 2010 which found that companies entering international markets increased their productivity by almost 18%.

Mr Macdonald said: “Increasing foreign trade increases economic growth. We need to change our thinking and our culture, embrace the best examples of what we see elsewhere in the word and bring a global business mentality forward from which all of society can benefit. It means business working much closer with government in terms of designing and implementing policy that will energise an export based economy.”

Graeme Blackett of economic consultancy BiGGAR Economics, which compiled the report, said: “Our research shows that successful small economies tend to be those that have high levels of trade.  This is because businesses that export tend to have high levels of productivity.

“A renewed focus on increasing exports should therefore be a prominent feature of the Scottish Government Economic Strategy, which is currently being reviewed.  This will allow Scotland to close the trade gap with other wealthy economies, boosting productivity and achieving their economic growth rates.

“The lesson from prominent trading economies shows that initiatives such as the development of a realistic and authentic national brand can play an important role.”

The N-56 proposals to support an export-based growth strategy are contained in Export Based Growth – Global Competitive Advantage from the Scottish Brand. The main recommendations are:

·         Export growth should be more prominent in the Scottish Government’s economic growth strategy, since it is associated with productivity growth and improved economic performance.

·         Continued access to global markets is critical, with Scotland’s continued membership of the European Union providing the easiest access to markets.

·         The delivery of an economic strategy distinctive from that of the UK with its high reliance on the financial services sector in the City of London.

·         Building on current strengths – research and development, education and skills, with Scotland boasting world leading universities.

·         Addressing perceived weaknesses in infrastructure and global connections – with the potential to address this through developing airport hub services and international freight ports, lowering the barriers to export.

·         Targeted tax breaks in areas with the greatest export potential – those sectors where Scotland has existing strengths potential such as oil and gas, tourism and food and drink.

·         The potential to reach agreements for large companies to work with small and medium sized companies in export markets, as well as a role for government agencies to assist businesses to establish new distribution channels, particularly in emerging markets, should be explored.

·         An export-based growth strategy will require that skills gaps in sales and languages are addressed.

·         A realistic and authentic national brand should be developed for Scotland, building on existing initiatives and learning from best practice elsewhere, including the likes of New Zealand and Singapore. This is an initiative that should be developed through collaboration between government, civil society and business.

·         The Scottish Government should take a leadership role in internationalisation to boost key export sectors, including applying to join the Nordic Council (whose members include nation-states and devolved territories).

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