Why we need a modern industrial strategy for Scotland - Liz McAreavey

It is a city that consistently shines in surveys and research on business resilience, often topping lists of places poised for economic growth in 2023-24.

With this in mind, it is fitting that the theme for the 2024 Edinburgh Chamber Annual Business Awards is “Grow, Scale, Succeed”. Yet, what are the driving factors behind our city’s success, and how can we further enhance our achievements?

Edinburgh boasts impressive statistics, including strong local business survival rates and above- average wages, firmly establishing itself as the UK’s most economically productive city outside London.

A significant contributor to this success story is the presence of our renowned universities and college, particularly in data, robotics, artificial intelligence and life sciences.

The city takes pride in its well-educated workforce, presenting a deep talent pool with more than 50 per cent of its workers engaged in high-skilled occupations. This figure is eight times higher than that of comparable cities like Manchester, Bristol, Leeds, and Glasgow.

Our technology sector’s prosperity is a testament to our thriving entrepreneurial ecosystem, nurturing a vibrant start-up scene that has already produced unicorns such as Fan Duel and Skyscanner, with more on the way. CodeBase Edinburgh, the UK’s largest tech incubator, is also one of the fastest growing in Europe.

CodeBase is delivering the Scottish Government’s Tech Scaler programme. Partners include Google for Start-ups UK, Barclays Eagle Labs and Reforge, a leading San Francisco-based membership programme.

Edinburgh’s tech sector has witnessed impressive equity investments totalling £940 million since 2011. Universities have spawned 83 spinout businesses dedicated to commercialising academic research, while an array of business incubators and accelerator programmes have further fuelled innovation. Local government has played its part, allocating funding through initiatives such as the Edinburgh and the South-East Scotland City Deal.

So, there is a lot we are doing well. But what could we do that would make things even better?

One clue might lie in the latest report from the Fraser of Allander Institute Business Monitor report, which was published in the past few days. More than 400 firms were surveyed. In the report, just 9 per cent of Scottish firms agree that the Scottish Government understands the business environment in Scotland, compared to 64 per cent of businesses that disagree.

The disapproval rating was higher still among hospitality businesses with a disagreement level of 80 per cent.

While First Minister Humza Yousaf’s commitment to resetting the relationship with businesses through the New Deal for Business initiative is a welcome step forward, it is evident that more must be done.

Edinburgh Chamber has also called for the creation of a Modern Industrial Strategy for Scotland setting out long term goals for our economy and mapping the way to reach them.

The strategy needs to be developed along cross-party lines to remove short-termism from the equation. Such a strategy would bring everything together, creating a cohesive, overarching and long-term aim for the development of our economy.

Liz McAreavey is CEO at Edinburgh Chamber of Commerce