Business insight jan 2014 online

Business Insight Thursday January 9 2014

Well connected Brendan Dick explains BT’s most complex digital project to date

Collaboration on campus Four-page special report features Inverness Campus, a landmark development in the Highlands

in association with

Thursday January 9 2014 | the times

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Business Insight

Welcome

Reaching a new frontier The Highlands are a place of opportunity, the best place in the world to live and work, says Drew Hendry, leader of Highland Council. In this issue we look at the investment and vision creating this opportunity across the region.

We start our journey in Inverness and at Inverness Campus, one of the largest projects that Highlands and Islands Enterprise (HIE) has embarked upon and one that is being hailed as a project of national importance.

Brendan Dick, head of BT Scotland, discusses next generation broadband (NGB), its complexities and how it will benefit the people and businesses of the Highlands and Islands.

We also go north to Caithness and Sutherland and discover why the run-down of nuclear activity is creating major opportunities for the area.

COVER IMAGE: JAMES GLOSSOP FOR THE TIMES

Inside ...

‘Best place in the world’

How one of Europe’s most diverse regions is attracting business at record levels Page 4

Inverness Campus

A four-page special report highlighting the best of a confident, forwardlooking initiative Page 5

Cover story

Brendan Dick of BT Scotland explains the imperative for digital connectivity Page 9

Good taste

The thriving food and drink industry is serving the nation well Page 11

Constantly scaling GARY WILLIAMSON

The Highlands and Islands are experiencing a business renaissance, in inward investment and a new optimism

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here was little snow for skiing in early December at Cairn Gorm Mountain near Aviemore, but the funicular railway beetled steadfastly up and down the slope.

This scene at the gateway to the Highlands somehow symbolised the way it used to be for the region’s economy: nothing much doing but soldiering on and living in hope of jam (or snow) tomorrow. One indicator more than most once epitomised economic fragility: chronic depopulation. The same indicator now points to a region more vibrant and confident than many would once have imagined possible.

For decades the long-term population trend has been positive. It is now around 230,000 and is forecast to reach 256,000 in 2035, without taking into account what economic players such as Highland Council, development agency Highlands and Islands Enterprise (HIE), the Scottish government and others may do to spur the economy along.

As Highland Council leader Drew Hendry puts it “People are attracted to the Highlands like no other time in the past.” HIE’s chairman Professor Lorne Crerar says: “HIE is creating centres of excellence that pull in employers attracted by the unique benefits that we have in the Highlands and Islands.”

Investors are responding to opportunities in food and drink, tourism, life sciences and energy, particularly renewables, and especially offshore wind, tidal and wave generation.

The Highlands now have one of the highest rates of population growth within Scotland, with two hotspots in particular driving that: Badenoch & Strathspey and Inverness. Highland Council hopes to have seen at least another 5,000 new homes built in the region between 2012 and 2017 to meet likely demand.

Badenoch & Strathspey boasts the 1,400 square miles of Cairngorms National Park, the largest in the United Kingdom, covering almost 6 per cent of Scotland and offering spectacular landscapes and diverse and unique flora and fauna.

It is a magnet for outdoor activities, including skiing, walking, fishing, shooting and deer stalking, attracting some 1.4 million visitors a year. Its distinctive communities add to the appeal: Aviemore, Ballater, Braemar, Grantown-on-Spey, Kingussie, Newtonmore and Tomintoul.

The Malt Whisky Trail through Speyside draws visitors to seven distilleries and contributes to off-peak tourism through special events such as the Spirit of Speyside Whisky Festival next scheduled for May 2014.

You can find areas looking not much different from hundreds of years ago and a real connection with nature Aviemore, the resort and village near the Cairngorm Mountain ski areas, has seen recent significant investment in refurbished and new hotel space by groups such as Macdonald Hotels & Resorts, which has also opened a clubhouse at its Spey Valley Championship Golf Course..

“There is good awareness of Badenoch & Strathspey’s appeal, but we have not even begun to tap the full potential of what this area, Sutherland and the rest of the Highlands have to offer,” says Drew Hendry. “The great beauty of our diversity is that you can find areas looking not much different from hundreds of years ago and a real connection with nature, but can also get to the top-class tourism facilities quickly.”

On the approach to Inverness, Loch Ness remains a ‘must see’ for foreign and domestic visitors alike, thanks as much to its scenic beauty and leisure activities as the (unquantifiable) possibility its fabled monster might appear.

Fast-growing Inverness is a magnet and a hub for the rest of the Highlands.

The development of Inverness Campus, the education, business, health and leisure site is a “huge opportunity” for the city and the Highlands, says Hendry. The University of the Highlands and Islands (UHI) campus element of the development will be a “game changer” for retaining and attracting young people, he adds.

The rise of life sciences research and industry is marked along the A96 road corridor from Inverness to Forres, Elgin and Nairn, locations emerging as a focus for world-class remote and digital healthcare R&D and businesses.

LifeScan Scotland, owned by US healthcare giant Johnson & Johnson, employs more than 1,000 people in Inverness in its manufacturing and research facilities that focus on blood glucose test devices. Daktari Diagnostics, an American maker of diagnostic medical products for the developing world, plans to set up in or near Inverness, with Forres possibly in the frame. IT outsourcing giant

The UCI Mountain Bike World Cup will be staged in Fort William in June this year

the times | Thursday January 9 2014

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Business Insight

new heights Capgemini is to have 500 employees in Inverness.

While the Highlands will benefit from visitor interest during the 2014 Commonwealth Games in Glasgow and the 2014 Ryder Cup at Gleneagles, Perthshire, Inverness is pursuing its own sports ambitions with plans for a new hub that will include a golf course, football, rugby, shinty, swimming pool, and walking and mountain biking routes. A marina may also be included.

The complete dualling of two key roads from Inverness – the A9 to Perth by 2025 and the A96 to Aberdeen by 2030 – will speed access to other main cities.

State-owned Inverness Airport is the gateway to smaller airports and strips throughout the Highlands and to main UK and continental hubs “Business growth in the Highlands is making routes more sustainable, which is why we have investment from companies such as easyJet,” says Stuart Black, director of planning and development at Highland Council. “The opportunity is there and will increase as other things grow or come on stream, such as energy-related developments at Nigg, Ardersier and Kishorn.”

Alongside growth and the rise of knowledge-based employment, there are significant challenges in the few depopulating areas, such as northwest Suther-

land, Hendry acknowledges. “Most of the Highlands are able to participate in the growth we are getting across the region and we intend to make sure no community is left out as part of our journey,” he says.

Highland Council’s role in facilitating resumption of energy fabrication work by Global Energy Group (GEG) at Nigg, Easter Ross, and GEG’s setting up with the public sector of the Nigg Skills Academy to train thousands rested on the council’s desire not to see a repeat of the past when oil and gas fabrication jobs came and went in great numbers.

Says Hendry: “GEG are very forwardlooking. I think this model will be replicated on other sites in the Highlands over the coming years.”

Similarly, Caithness is reinventing itself to counter decommissioning of the

Stuart Black points to sustainability of air routes

Dounreay nuclear reactor. Scrabster harbour has been upgraded at a cost of £20 million for anticipated work from offshore renewables and oil and gas developments.

Investment has gone into the harbour at Wick which, with its airport, rail station and road links, is strategically placed to service offshore energy developments.

Engineering and technical skills from Dounreay will be available progressively over the next five years to cross over into industries such as tidal and wave energy.

The Caithness & North Sutherland Regeneration Partnership, which includes Highland Council and HIE among its partners, hailed the granting of permission to MeyGen Ltd to develop Europe’s largest tidal energy project in the Pentland Firth between Caithness and Orkney.

Law firm Harper Macleod opened a new office in Thurso last year to get closer to potential wave and tidal power developments in the Pentland Firth.

Since setting up the annual Scottish Highland Renewable Energy Conference in Inverness five years ago (the next one is in April 2014), Harper Macleod’s energy team has been involved in projects responsible for more than a third of the 6.4 Gigawatts of onshore wind generating capacity in Scotland to date and now sees more offshore wind, wave and tidal power technology looming.

“The spin-off effect from the ports and harbours activity cannot be understated,” says Chris Kerr, lead partner in the firm’s north of Scotland operation, with Harper Macleod having been involved in many port-related deals and significant harbour

developments across the region. “The impact goes way beyond direct job creation and the supply chain, to areas such as housing, leisure and general promotion of the region to entice people to live and work in the Highlands.”

Nearby John O’Groats has been transformed after a multi-million pound refurbishment and extension of the reopened John O’Groats House Hotel by self-catering holiday specialists Natural Retreats.

Lochaber, outdoor capital of the Highlands, will enjoy global exposure in June when the UCI Mountain Bike World Cup is staged at Fort William, the staging post too for mountaineers tackling Ben Nevis.

The year of Homecoming 2014, when Scots and their descendants worldwide are invited to visit the mother country, will on previous evidence provide more tourism spend this year. The older generations of the Highlands diaspora will find a much more confident place than they perhaps left. The recent return of business confidence is seeing Highland companies refocus on growth, says Chris Kerr, who works with the region’s many owner-managed and family-owned businesses.

“We’ve seen a lot of internal corporate restructuring going on to be in the best position to grow. These companies are still around because they move with the times and evolve, often as new generations come into them. I am struck by the number looking at succession planning and there seems to be more willingness to identify skills gaps and consider bringing in non-family members where a need is identified.”

COMMERCIAL REPORT: HARPER MACLEOD

Law firm signs up to the future Harper Macleod looked to the north for continuing growth when others looked south . . . and the law firm has never looked back, says Rick Wilson

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ome eyebrows were raised in legal circles when, almost ten years ago, the well-established Central Belt commercial firm Harper Macleod upped a few sticks and branched out north, while other such big city legal eagles aimed to fly south. Even in Inverness, which was earmarked as the main outpost and beneficiary of the firm’s formidable expertise, more eyebrows were raised.

“We always try to do things a wee bit differently,” says Chris Kerr, the partner who led, and still leads, the northern operation. But, of course, the answer to “why?” was not as simple as that. “We had our ears to the ground, listened to the messages coming through from our contacts, and reckoned such a departure could contribute to what we hoped to achieve – healthy growth of our business.”

Perhaps one of the most significant

ears to the ground was that of the firm’s chairman, Professor Lorne Crerar — who is also the current chairman of Highlands and Islands Enterprise (HIE).

Nearly a decade on, then, the question, has to be: did it work?

“Undoubtedly. Inverness and the Highlands and Islands have been great for the firm,” says Kerr. “The business community has been appreciative of our presence and welcomed our approach. Early on, we occasionally had to address the idea ‘why would we need specialist lawyers in this or that area when a general practitioner might do?’. But, without exception, any client coming to us has realised it makes sense to use a lawyer who understands the particular discipline in question. And we’re on their doorstep.

“We have more lawyers recognised as leaders in their field than any other firm in the north. We operate from Moray in the east to Skye in the west, through Ross-shire into Caithness and beyond to the Islands.”

The firm is admired for its work in corporate — notably among the region’s many family or owner-managed businesses — and high-end private client concerns, as well as rural and commercial property, employment law, banking and finance, family law and dispute resolution.

“But we have also identified areas of growth specific to the region, where we could play an advisory part. Key among these are renewable energy and the life sciences.”

For advisory, read proactive. Getting thoroughly involved in these fields, hav-

Chris Kerr of Harper Macleod heads up the firm’s Inverness office

ing spotted that “energy was going to get bigger by the year”, Harper Macleod runs the Scottish Highland Renewable Energy Conference (SHREC) which marks its fifth anniversary in April and attracts 250 industry figures to Inverness each year. And the firm recently hosted the inaugural (to be annual) Life Sciences, Knowledge & Enterprise conference

(LiKE), addressed by John Swinney, in recognition of the area’s leading role in the burgeoning life sciences sector.

“So the decision to expand north has paid off,” says Kerr. “It has contributed to our sustained growth as a firm, with turnover rising year-on-year through the economic downturn. And we’ve grown the Inverness office to the point we need more space, created jobs and played our part in stimulating the local economy.”

Multiple reasons, then, for celebration in the coming year, with scores of new clients on the books and a second northern office opened in Thurso.

“We’re good at parties,” says Mr Kerr.

“We’re planning a ten-year anniversary event in Inverness in September and a first-year celebration in March in Thurso, where the business community turned up in droves for our launch party.”

What else is on the horizon? There’s the Inverness Campus, the 215-acre business-education development that sits on Harper Macleod’s Inverness doorstep.

The firm’s Infrastructure & Projects team advised on the £60m deal to build the new home of Inverness College UHI there, and the campus is central to developing in the region’s life sciences capability.

Meanwhile, Kerr is clearly interested in nurturing the entrepreneurial spirit he has detected in Morayshire, among other areas, but any other moves might be put on hold for a few months as Harper Macleod focuses on the culmination of its role as Legal Adviser to the Glasgow 2014 Commonwealth Games.

Thursday January 9 2014 | the times

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Business Insight

Regional support

Welcome to the ‘best place in the world to live and work’ One of Europe’s most diverse regions, the Highlands are grabbing every chance to attract new business and new people at record levels

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here are 10,000 employees among its population of 230,000 people, so Highland Council has a key responsibility for making the region a better place to live and work – and faces one of the biggest challenges among the United Kingdom’s local authorities.

“We are one of the most diverse regions in Europe,” says Drew Hendry, of the Scottish National Party, who leads a tripartite political administration, including Labour and Scottish Liberal Democrats, making policy between 2012 and 2017.

That diversity ranges from the demands of fast urban growth in Inverness to the economic and social fragility of some of Europe’s most sparsely populated areas.

“There is certainly complexity, but a big region offers the opportunity to harness the diversity of our people and industries, so the whole is greater than the sum of the parts,” says Hendry, an entrepreneur who founded and is still a shareholder in Highland-based Digital Marketing company Teclan.

“The Highlands are the new frontier, a place of opportunity, the best place in the world to live and work. We are open for business, welcome enquiries and will do what we can to accommodate opportunities, increase their value for our people and enhance our communities. It is an exciting place and people are attracted to it like no other time in the past.”

Hendry describes the council as an “enabler” for companies and organisations buying into this story. He says: “Typically, we help bring people together,

Angus MacSween of iomart points to entrepreneurialism in the region

co-ordinate projects and, of course, set the policy context.”

While individual planning applications are necessarily judged on their merits and within statutory policy constraints, Highland Council is committed to progressing applications “really quickly” where possible, Hendry says.

“We are open for business but not at any cost. We try to provide a clear position as rapidly as possible on what can be done in the context of local and Highland-wide plans already in place. For a particular type of development, we can say where in any given area that might be enabled.

“If it is bringing work in, we will facilitate it as much as is possible by connecting investors to the right organisations to get the best possible outcome within the planning framework. We try to make this as cooperative a place to work as we can and the processes as simple and easy as possible to access.”

Hendry is a member of the Scottish National Party (SNP), which of course wants Scotland to be independent of the United Kingdom, but at Highland Council he leads a multi-party political administration: SNP, Labour and Scottish Liberal Democrats, covering centre to centre-left shades of opinion.

There is a common agenda to create the right planning environment and to support businesses as an enabler.

Hendry says. “We put together a 129-point written strategy when we came together. That’s allowed us to focus on the things that we agree about – the needs of the economy, jobs, infrastructure and social needs – a very clear path to follow.

That is a real strength.”

He cites the June 2014 arrival of Capgemini in Inverness: “It tells you

about our attitude to enterprises that they want to invest here and also how attractive the Highlands is to science and technology-based businesses. We have the perfect environment and that is being backed up in bricks and mortar at Inverness Campus. And, of course, you can surf in the morning, and go skiing or play golf or go walking and enjoy nature in abundance.”

The SNP’s Drew Hendry, leader of Highland Council

Similarly, Highland Council has worked closely with Global Energy on the re-emergence of Nigg in Easter Ross as a manufacturing site for energy industries and the establishment of the Nigg Skills Academy.

“We made sure the right planning conditions were in place and were able to support them by sourcing some regeneration funding for part of the site,” says Hendry, who sits on the board of the Academy.

“We have played a role in spreading awareness about what the location has to offer because it has to be a sustainable future.

“The council has been committed for 10 years to seeing Nigg back in operation and we are delighted that Global has achieved something that will be very productive for the Highlands.”

To meet population growth and the rise of new industries, Highland Council hopes to have seen another 5,000 homes built in the region between 2012 and 2017, a construction programme that would itself boost the regional economy.

“We would actually like to overachieve that target,” says Hendry.

“If we see the new jobs growth that is predicted in life sciences, oil and gas, and renewables, then you have to be able to house the people who are attracted to them. We are tackling the issue early on.”

Private house builders are responding well, says Hendry.

“They are beating our predictions for their contribution towards that target, but we also have a very demanding council house building programme and are working with housing associations to ensure there is even more affordable housing across the Highlands.”

Council housing is “vital” to retain population too, he maintains.

“Many of our people are sustained by council housing around the Highlands and we are working hard to go from a position of having had no builds in previous years to nearly 1,000 additional council houses in the five years to 2017.”

New enterprise means having our feet on home ground and our heads in the cloud

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or me the Highlands has always been a good place for business. When I founded iomart as a telecommunications and internet company 15 years ago this month, we chose the company’s name in homage to the Gaelic word for enterprise, ‘iomairt.’

Stornoway, the town where I grew up, was the site of our first customer contact centre. We employed 80 staff, making us one of the largest private-sector employers in the Western Isles.

The statement we were making was that the internet was going to provide a platform for anyone to do business from any location. Many of our employees had left Lewis for economic reasons but retained a strong attachment and wanted to come back and contribute to the economy and community. The internet made this possible.

The market has changed since those dial-up days. We now have more access choice with 4G, satellite, cable and fibre broadband but without speed of connectivity, commerce in the new digital economy is difficult.

There’s also the advent of video and media-rich content. A B&B owner in the Hebrides wants to point a camera out of their window and let Mother Nature do their promotion – this content is bandwidth heavy and depends on connectivity.

The Highlands continues to produce people with entrepreneurial spirit but without these tools they are disadvantaged. I am delighted that this has finally been recognised at national level with the recent announcement of a £264 million investment in high speed broadband across Scotland. It is welcome, although later than hoped for.

We have heard success stories from customers in the Highlands — one coded a leading online educational game on his laptop in a caravan on Skye. We want to hear more.

The cloud computing revolution means today’s entrepreneur doesn’t need to invest heavily in IT start-up costs. Everything you need to take your idea to market — website, CRM software — is now available on a per-use basis.

If we can get the connectivity right, there is no reason why the Highlands cannot be even more innovative and competitive. As I realised 15 years ago, the region has the people, the skills and the spirit – it just needs the infrastructure to be delivered.

Angus MacSween, is CEO of cloud computing company iomart

Inverness Campus Special feature

A landmark new development is set to stimulate business growth in the Highlands, says Frank Simpson

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ake the phrase ‘Inverness Campus’, what images come to mind?

If you pictured a landscaped, modern business park, you’re on track. But that’s not the complete picture.

Imagine a prestigious site for the University of the Highlands and Islands’ (UHI) … new laboratories for pioneering scientific research … international-class sports and leisure facilities … a four-star hotel providing jobs and training to disadvantaged young people … plus an open space for community arts and cultural events.

Each of these elements would be a significant development in its own right.

Combining them into a single initiative, as Highlands and Islands Enterprise (HIE) is doing with Inverness Campus, is what makes this ambitious project unique.

Infrastructure work has been completed on 89 acres of the high quality, 215-acre site located on the eastern side of Inverness. With seven of the 17 plots under development or attracting interest, six of which will benefit from Enterprise Area status for life sciences companies. This will provide incentives such as rates relief, ‘fast track’ planning and support for training.

There is also advance planning approval for a life sciences business unit for which HIE will consider funding in the first quarter of this year meaning construction could start in April with the building complete a year later. As a further incentive to investors, plots are being offered at local market value and HIE is ready to assist with support packages that are on par with the best in the UK. Work is also progressing on the cam-

We wanted to encapsulate the spirit of a confident, forward-looking initiative

pus’ largest building (18,500 sq m) which will house Inverness College UHI, part of the University of the Highlands and Islands (www.uhi.ac.uk) which is a network of 13 colleges and research institutions and a network of 50 outreach learning centres throughout the region that provide local access to more than 7,500 students. Plans for several other projects are well advanced, including new Inverness premises for Scotland’s Rural College and a 120-bed hotel that will be run by Highland social enterprise Calbyn.

A plot has also been earmarked for an innovative building to be shared by HIE and UHI allowing collaborative opportunities between research, education and businesses to be explored and developed.

Rounding off HIE’s vision, the campus will also provide sport, culture and leisure facilities for both locals and visitors from its accessible, attractive environment and the planned multi-disciplinary sports centre.

“You would find the ambience difficult to beat anywhere in the UK” says Ruaraidh MacNeil, HIE’s director of Inverness Campus. “It’s an innovative design with an excellent public realm and landscaping.”

The key challenge was how to create a location which would meet a diverse range of needs from businesses, academic and research institutions and locals who will use the campus for leisure and recreation.

“We wanted to encapsulate the spirit of a confident, forward looking initiative,” said Ewan Anderson, who leads master planners 7N Architects, Edinburgh. “It is designed to connect to the Highland scenery, encourage users to collaborate, communicate and share ideas with the structural design of the landscapes providing its character”. says Anderson.

Positioned between two national trunk roads, the A9 and A96, Inverness Campus is also set to become a core element of Inverness’ growing life sciences quarter, with close links to Raigmore Hospital; LifeScan Scotland, the country’s largest life sciences company and the Centre for Health Science.

Inspiring example of close cooperation

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s chair of the Inverness Campus Partnership Forum, I am delighted to be a part of the implementation and strategic vision for the new campus, said Cabinet Secretary for Finance, Employment and Sustainable Growth. “Inverness Campus is one of the largest projects that Highlands and Islands Enterprise has undertaken and will deliver a major boost to the economy and the infrastructure of the Highlands. It is not just a campus for Inverness, it is a project of national significance.

“It is groundbreaking in bringing together the academic institutions of UHI, Inverness College UHI, SRUC, University of Stirling and the Centre for Health Science with space for business to work alongside them.

“The multi-million pound project will bring together business people, academics, researchers and the local community to stimulate strong economic growth in Inverness and further afield.

“The campus is a clear example of what can be achieved through close collaboration and an example of the confidence that Highlands and Islands Enterprise, the further and higher education sectors, The Highland Council, NHS and the third sector have in the future of Inverness, the Highlands and Islands and Scotland as a whole.

“The region is already home to a wealth of expertise in life sciences and the campus will enhance the attractiveness of Inverness to businesses in that field, securing international investment,

John Swinney MSP boosting employment and providing top-class academic facilities.

“Inverness Campus will play a crucial role in the expansion of research and further and higher education in the Highland region.

“When it opens in summer 2015, Inverness College will provide our young people with new skills and opportunities to fulfil their potential and contribute to Scotland’s economic success and prosperity, helping us to deliver more employment opportunities for our young people.

“This is great news for the Highland economy. The investment will bring construction jobs to the area, attract new businesses and highly trained professionals to the Highlands.

Thursday January 9 2014 | the times

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Business Insight

Business Forum

If you build it, they will come

JAMES GLOSSOP FOR THE TIMES

The latest Times Forum debated the merits of the new Inverness Campus, a unique collaboration which will benefit the economy, higher education and the community, reports Barry McDonald

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he 215-acre Inverness Campus is set to be a transformational development for the Highlands and Islands, providing a state-of-the-art environment for businesses, students and local residents. As a new centre for business, research and teaching, work is ongoing to attract regional, national and international investment. So what does the panel feel needs to be done for the campus to realise its potential?

Work is ongoing to attract new businesses and research organisations to Inverness Campus. What is the USP of the campus and the region?

Stuart Black from Highland Council said: “There are clear business benefits for companies locating here. It’s a life science enterprise area, it’s close to the main hospital for the region, it has the Centre for Health Science and it’s got LifeScan Scotland.”

He believes the campus is truly distinctive in nature and said: “It’s an exciting place for the locals as the quality of the environment in the campus is something quite special. There are excellent water features and footpaths and I think it will become a very popular recreational area for Inverness.”

Collaboration will be the ethos of the campus. How can this best be fostered?

Ruaraidh MacNeil said: “We feel the Inverness Campus is a unique project because of the collaboration between the NHS, university and private sector locally. It’s a project which compares favourably with any major campus development around Europe.”

The collaborative nature of the campus is the key to future success, said James Cameron. “Its specific USP is the collaborative nature we have between the health service, academia and the business community. That is the blend that will make the Campus a success.”

Professor Alasdair Munro agreed. He said: “The life science sector is in a very collaborative frame of mind.

“We’ve been working for the last ten years in developing the academic aspect of health sciences, particularly research, along with the strong commercial sector represented mainly by LifeScan with well over 1,000 jobs and the hospital which employs something like 3,000 people. So

there’ a lot of collaboration.”

For Professor George Gunn, it’s about attracting people and businesses with specialist skills and expertise. He argued: “The incentive for my team is to be part of a team of like-minded people. My niche is to focus on the research elements. A lot of the kudos of an academic institution are going to revolve around the quality of research that we grow and one angle of that is to have it associated with businesses. To bring like-minded people gives a sense of belonging.”

Back row, left to right: Fiona Larg, Stewart Nicol, Ainya Taylor, Stuart Black, Diane Rawlinson, James Cameron. Front row, left to right: Isobel Grigor, Magnus Linklater, Ruaraidh MacNeil, Prof Alasdair Munro

As well as promoting economic growth, can the campus act as a driver for demographic change, enabling the area’s young to stay in the region and encouraging relocation?

The campus, said Fiona Larg, must act as a catalyst to retain the region’s young people. “The campus will be a great attribute to us in terms of persuading people to stay but we don’t just want local

Around the table The Business Forum was chaired by Magnus Linklater CBE, columnist for The Times Scotland, who was joined by: n Ruaraidh MacNeil, Project Director, Inverness Campus, HIE n Stuart Black, Director of Planning & Development, Highland Council n Diane Rawlinson, Principal, Inverness College UHI n Fiona Larg, Chief Operating Officer, University of Highlands and Islands n Stewart Nicol, Chief Executive, Inverness Chamber of Commerce n Prof Alasdair Munro, Chairman, Centre for Health Science Company n Prof George Gunn, Head of Veterinary Epidemiology, Scotland’s Rural College n Isobel Grigor, Chief Executive, Calman Trust n Ainya Taylor, Highland Youth Convenor n James Cameron, Head of Life Sciences, Highlands and Islands Enterprise

young people to stay in the region, we want to attract young people from the rest of Scotland, the UK and international students. One of the problems that we have in the region is not so much a lack of skills but a lack of people.

“We have very low unemployment but it’s estimated we’re 19,000 people short between the ages of 16 and 30.

The campus will play a major role in redressing the balance. It will give our young people the option of being able to stay in the area, whereas before they would have maybe gone to Edinburgh or Glasgow.

“It’s also very important to bring new ideas, new young people and I’m sure if they studied here there’s a greater chance they’ll stay and get jobs and bring up families here.”

From an academic point of view, Diane Rawlinson stated the close working links between the Higher Education establishments and businesses can benefit both in the campus. She said: “The University of Highland and Islands is unique in that it can offers something to every member of the community and also because of its offering to business.

“Local, regional and international businesses can engage with the university and have a response to their workforce needs at every level. They can come through a single door for work and enterprise.

“We can provide them with apprentices and support them through their programme and when they leave and go to work they can then re-enter the university and develop further to research or degree level all within the one institution. That’s unique in the UK. We’re excited about the potential to attract companies to the Highlands and Islands.”

Ainya Taylor, who represents young people in the region and feeds their views to the area’s decision makers, agreed. She

added: “Young people in the Highlands and Islands will be attracted to the campus.

“Fewer young people can afford to move away and to see such a great campus being developed has really encouraged more people to stay here. It will also encourage people from across Scotland when they see the great opportunities that studying in the Highlands can offer, such as the outdoor sports and the Cairngorms. There are a lot of opportunities here which students wouldn’t have elsewhere. I think young people will recognise that and want to come here to study.”

How important is connectivity to the success of the region and the campus?

Stewart Nicol is convinced that connectivity is vital for the campus and the region’s success. He argued: “I think the connectivity we have both in terms of physical infrastructure, road, rail and air links, is massively important for Inverness and the Highlands. But so is digital connectivity.

Hotel Artysans, which will be located on the campus, will operate as a social enterprise run by the Calman Trust and Albyn Housing. Should entrepreneurs be given more support to create social enterprises?

Isobel Grigor, believes social enterprise could prove a huge boost to the region.

She said: “A well run business is going to be a very good learning environment.

Hotel Artysans will directly combine the business of delivering service to customers of a high quality with a simultaneous learning experience for young people.

Any surplus generated will be delivered directly in return to sustain that work in the long run. For the area there is no question that this will be more advantageous than a business that takes its profit out of the area.”

the times | Thursday January 9 2014

7

Business Insight

The Golden Bridge links the Inverness Campus with the city

HIE the driving force in a dynamic region JAMES GLOSSOP FOR THE TIMES

The Highlands are now a premier hub for ambitious and innovative business

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ighlands and Islands Enterprise hit on a bright solution when it was bidding to attract French IT outsourcing multinational Capgemini to bring 500 new jobs to Inverness: give up its own headquarters and move to Inverness Campus. “It’s a symptom of our devotion to developing sustainable economic growth,” says Professor Lorne Crerar, HIE’s chairman and a founding partner of the Scottish corporate law firm Harper Macleod.

Significantly, HIE’s plan is to co-locate on the campus with staff of the University of the Highlands and Islands (UHI).

It is believed to be the first time a university and a development agency have chosen to share premises, and provides a powerful signal of the collaborative environment the campus is designed to foster.

As the economic and community development agency for more than half the land area of Scotland, HIE is acutely aware of its responsibilities to all parts of the area it covers.

Some of its investment is directed to

HIE chairman Professor Lorne Crerar

There are great opportunities for trading at a distance for small companies

projects which benefit the entire region, such as the University of the Highlands and Islands.

Another is the £146 million rollout of next generation broadband (NGB) currently being led by HIE and BT across the Highlands and Islands. The UK’s most complex broadband project, this will cover up to 84 per cent of premises by the end of 2016. HIE’s ultimate aim is for NGB to be available everywhere in the region by 2020.

“It will create great opportunities for trading at distance,” says Crerar. “Think of the opportunities for small businesses with phenomenal services and products.”

Look around the Highlands and Islands, and you’ll find ample physical evidence of HIE’s spend being widely distributed in line with strategic objectives based on the location of resources, and

opportunities in growth sectors including energy, marine sciences and digital health.

HIE, the Scottish Government, and Scottish Development International (SDI) have since 2008 supported infrastructure and business development at the former NATO airbase now owned by the Machrihanish Airbase Community Company (MACC) just north of Campbeltown in Kintyre. The site hosts tower manufacturing for wind power, other renewables activity, and Campbeltown airport.

Wind Towers (Scotland) Ltd, the largest single employer in the area, is a joint venture between energy company SSE and HIE, the agency owning 19.9% of the ordinary share capital.

At Dunstaffnage near Oban, the European Marine Science Park is being developed by HIE as a location for marine science R&D and enterprise, capitalising on the success of the adjacent Scottish Association for Marine Science.

HIE part-funded development of a masterplan based on redevelopment of the dry dock at Kishorn, Wester Ross, the former scene of large offshore oil fabrication projects. “Kishorn is extremely well placed for the development of wind, wave and tidal energy resources off the West of Scotland,” says Crerar.

The agency is also contributing more than half the cost of the £9.5 million Port of Entry project at Lochboisdale, South Uist. Creating new marine leisure and fisheries facilities and providing land for community and commercial development, the project is due for completion in

2015. “It will support economic and community development in a fragile area. It could very well be transformational for that part of the outer islands,” Crerar says.

Over at Arnish on Lewis, HIE is supporting development of a major manufacturing site tenanted by Burntisland Fabrications (BiFab) to support fabrication work for oil and gas and offshore renewables. The site enjoys Enterprise Area status. The Outer Hebrides aspire to become a global player in renewable energy generation.

HIE invested £2.95 million, including £1.18 million from the European Regional Development Fund, to create industrial units next to Hatston Pier, Kirkwall, Orkney.

These meet the needs of wave and tidal and energy developers using the European Marine Energy Centre (EMEC) test site at Eday. EMEC, the world’s only grid-connected and accredited wave and tidal energy test centre, was established in 2003 with HIE’s backing.

Across the Pentland Firth, HIE has supported the £20m upgrade of port infrastructure at Scrabster, Caithness, anticipating construction and supply chain needs of the offshore wind and wave energy industries as well as oil and gas developments west of Shetland. The world’s largest array of tidal energy machines is to be installed in the Pentland Firth.

“The investment at Scrabster shows our confidence in future opportunities,” Crerar says.

At Nigg, Easter Ross, over 1200 people are employed on the fabrication site owned by Highland-based Global Energy Group (GEG). “When I first went there five years ago, the site was virtually derelict,” Crerar recalls. “It shows where the public sector really can help with infrastructure projects of that magnitude, driven clearly by a private sector partner.”

HIE provided £1.8 million towards GEG’s development of the former oil fabrication yard and is supporting other port infrastructure improvements in the area.

Oil fabrication has returned and GEG and the public sector have set up of the Nigg Skills Academy that aims to have trained up to 3,000 people in fabrication skills between 2012 and 2015. Nigg has Enterprise Area status.

Aside from coastal infrastructure, HIE invests in industrial units and other facilities bringing employment inland.

The 100-acre Enterprise Park Forres (www.enterpriseparkforres.co.uk) hosts engineering, business outsourcing, medical diagnostics, and aquaculture systems companies, among others. Units and land are available in a location with Enterprise Area status.

Set in a beautiful environment, it is towards the eastern end of the ‘A96 corridor’ between Moray and Inverness that has become popular with digital health and other companies. Co-funded by HIE, The Alexander Graham Bell Centre being developed at Moray College UHI, Elgin, will be a research, education and continuing professional development facility for life sciences. Remote and digital healthcare based on R&D by clinicians in the area will be the main initial focus.

Commercialisation activities will increase knowledge transfer to and from local companies.

“The A96 corridor will continue to attract people who want to live and work in a beautiful place with a great social and geographic environment,” Crerar says.

“HIE is about creating centres of excellence that pull in employers attracted by the unique benefits that we have in the Highlands and Islands.”

Thursday January 9 2014 | the times

8

Business Insight

Knowledge-based economy Inverness Campus looks set to become a role model for bringing together learning and business, reveals Rob Stokes

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he foundations of Inverness Campus are not so much set in cement as in the economic history of the Highlands and Islands over recent decades. With a growing population, and unemployment rates consistently below national averages, the region’s fortunes as a whole have improved dramatically in the last 50 years. The creation of the Highlands & Islands Development Board (HIDB) in the 1960s and its successor Highlands and Islands Enterprise (HIE) in 1991 were major steps which, under successive governments, helped to reverse previously chronic depopulation and create a more diverse economy.

“Population is growing sustainably in around 90 per cent of the region,” says Ruaraidh MacNeil, director of Inverness Campus. “But the 16 to 25 year olds demographic remains an issue.” Which is due largely to young people leaving to access mainly higher education and first jobs. MacNeil is himself an example of this trend. Originally from Barra, he left the region in his twenties for a job in London before returning to take up a post at the HIDB in Inverness.

However, many such migrants end up staying in areas where they studied or started a career. The result is that their skills can be lost during the years when they could make a considerable economic impact. Hence the emphasis on creating and developing the University of the Highlands and Islands for which HIE has been a main proponent and driver.

“For hundreds of years, the region had aspirations towards its own university but never managed it until now,” MacNeil says. “It has grown out of awareness that the healthiest economies have strong universities at their core.”

The evolution of UHI’s federal structure, embracing 13 colleges and other research institutes across the region, culminated in formal university status being awarded in 2011. The Inverness College UHI building under construction at the heart of Inverness Campus will be a powerful symbol of its status.

“With the title secure, the aim is that UHI becomes a very strong university that young people from the region and elsewhere will want to put down as their preferred choice,” MacNeil says.

“It’s a brand new university with a unique model. With so many young people now being technology literate, and with new means of distance learning, the time is right for UHI to make a powerful impact.”

HIE and UHI are negotiating to share 4,200 square metres of space in another new building on Inverness Campus.

UHI wants an Inverness site to support its partner colleges and institutions, so is looking for a research and education building on the Campus as a partnership asset. HIE needs a new headquarters as it has to hand over its present offices to Capgemini in the summer as the firm will use the location to bring 500 jobs to the city. “UHI and HIE agree that as we

The landscaping of the campus provides its unique character

Foundations for a place to learn, lead . . . and live

The people in Oulu advised us to focus on key strengths – in our case, healthcare and life sciences

collaborate on economic development we should perhaps co-locate, leading potentially to even more cross-fertilisation,” says MacNeil.

UHI is talking to Scotland’s Rural College, which is focused on agriculture research, about sharing part of its building.

Other proposals to join HIE and UHI on this plot include a Science Academy to promote science, technology, engineering and maths to school students. “It’s still being fleshed out,” says MacNeil. “But it is an exciting idea which could open up new opportunities for young people as well as broadening the regional skills base.”

Inverness Campus became a coherent project in the last decade as three themes converged: HIE’s mission to attract and foster more knowledge-based industries; the need to replace Inverness College’s outdated building if UHI was to have an iconic focus; and the rise of the region’s life sciences sector, which employs over 1,000 in Inverness alone.

“In LifeScan Scotland, which is part of Johnson and Johnson, we were fortunate to have Scotland’s largest medical technology company in Inverness, and that shaped our thinking about what could be achieved with UHI and the knowledge economy,” MacNeil recalls.

HIE’s vision for Inverness Campus really crystallised following its success with the Centre for Health Science, which opened in 2007.

Casting around for appropriate development models among similar regions, with a university and one major city considered remote from the rest of a country, HIE lighted on Oulu in northern Finland.

“In the early 1960s, Oulu was similar to Inverness. Yet it had managed to transform itself over 30 years into a high technology based city with a population around 192,700,” says MacNeil. “This transformation was on the back of the local college becoming a university fo-

Ruaraidh MacNeil project director, Inverness Campus

cused on electronics and technology.”

“It was a good model,” says MacNeil.

“The people in Oulu advised us to focus on key strengths — in our case healthcare and life sciences — and make sure we have a strong, research focused university.”

The result was the innovative Centre for Health Science a partnership led by HIE to capitalise on the region’s growing reputation in life sciences.

Bringing together units from four Scottish universities, pioneering diabetes research, a leading dental school, and clinical care and treatment for patients, the Centre was conceived as a model of productive collaboration between academics, health professionals and business people, facilitated by the public sector.

Success with this multi-million pound project, which opened in 2007 and now employs around 250 people, helped drive and focus the agency’s vision for Inverness Campus. Indeed, it could almost be seen as a trial run for what HIE aims to achieve, on a larger scale, with the Campus over the coming years.

In a reverse move, Scandinavia now comes to Inverness in search of models. “A lot of interest in the Centre for Health Science and Inverness Campus has been from Norway,” MacNeil says. “Overall, we’ve hosted well over 100 visits now, and the response has been overwhelmingly positive. Once people understand our vision, and see the effort that is going into ensuring the new landscaping and built environ-

ment match the superb quality of the natural surroundings, they’re just blown away.”

He admits that 15 years ago, the notion of building a knowledge-based economy in the Highlands and Islands seemed a tall order. “I think our confidence has grown,” he suggests. “Back then, because it had never happened before, people imagined that it was impossible. But when we went to Oulu they advised us to just start doing it.

“One critical piece of advice they gave us was the importance of partnership - bringing together interested parties, exploring themes of common interest and developing highly ambitious ideas which a broad community of interest could get behind.

“As well as being the catalyst for the highly collaborative model which we then developed for the Campus, that really got us thinking about the need for a community purpose to be at the core of the project. And that’s an aspect which really makes Inverness Campus unique.”

Community and leisure aspects of Inverness Campus include proposals for significant sports facilities. Most existing facilities are in the west of the city while the majority of population growth has been to the east, close to the site of the Campus.

In discussion with sports associations and with UHI, which is keen to develop its academic interest in sport, HIE is working on a model to provide sports facilities for students, staff and the community at large.

“It may also focus in time on supporting elite sports and on growing the academic content around that,” says MacNeil.

“A key point is that we want the campus to be exciting for young people. We want there to be lots of activity on site, accommodation for them, and a healthy cultural scene — music, drama and so on — attached to it. That’s the mission for the next five to ten years.”

the times | Thursday January 9 2014

9

Business Insight

With every fibre of our being JAMES GLOSSOP FOR THE TIMES

A faster and more reliable broadband system could radically transform how we communicate in many different areas of life, writes Ginny Clark

Those in government and business really do understand that to compete globally you must have digital connectivity

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t seems incredible that it is only 37 years since the GPO closed the last manual telephone exchange in the UK, at Portree on the Isle of Skye, paving the way for Subscriber Trunk Dialling, then wholesale conversion to electronic systems, a modernisation programme that was not completed in Scotland until the mid-1990s. However, less than a generation after that, in 2014 and beyond, BT will be spinning out a network web that offers fast, efficient digital connectivity to some of Scotland’s most remote corners.

In their most complex digital project yet, BT will be tackling Scotland’s rugged terrain to deliver next generation broadband (NGB) to homes and businesses in a £146 million investment project that has been developed by Highlands and Islands Enterprise (HIE).

This project, representing another step towards the Scottish Government’s target of making world-class NGB available to all by 2020, will increase high-speed fibre broadband coverage across the Highlands and Islands to up to 84 per cent of premises by 2016. Public sector investment will total £126.4 million, and it is being delivered through a Scottish Government fund that includes finance from Broadband Delivery UK (BDUK), and up to £12 million from HIE, with BT investing an additional £19.4 million.

It’s an ambitious move on a number of levels, explains Brendan Dick, Director of BT Scotland, as it’s not only the most significant digital infrastructure project in Scotland’s history, helping Highland and Island businesses to compete on the international stage; it’s also part of a wider aim to revolutionise the way in which we deliver everything from education to public services.

“We’re at a really interesting time for high-speed digital services,” he says.

“Those in government and business do genuinely understand that to compete globally, you must have digital connectivity. HIE understands this, but with this programme in particular there has been a significant step change in the emphasis on gaining economic and social value from the infrastructure by helping communities and businesses to exploit it.

“It’s striking that the latest research shows for every £1 invested in broadband infrastructure, the UK economy will benefit by £20. That’s a really impressive figure, which emphasises the importance of looking at high-speed connectivity in terms of economic benefit.

“The Scottish Government’s ambition for 2020 recognises that it’s not just about finding partners for investment, but at the same time driving the exploitation of NGB through a digital participation programme into the third sector and out into

The latest research shows for every £1 invested in broadband the UK economy will benefit by £20 the communities. If we only put pipes in the ground, and no one does anything to make sure people benefit from that, it would be a waste.”

Dick believes initiatives such as BT’s partnership with the Scottish Government and Glasgow Housing Association (GHA) are good examples of the way forward. GHA has been involved in trial projects to encourage digital participation by tenants. In a city reported to have a low level of broadband take-up, at just 60 per cent compared to the UK average of 78 per cent, GHA’s figures showed only one third of their tenants were online, and that 90 per cent of their tenants over the age of 65 had never used the internet.

“It’s very apposite in looking at the broader aspect of connectivity, where GHA have demonstrated to a number of

their customers who were not engaged in the digital network that they would be disadvantaged in future. It’s cheaper to buy online, while the ability to get jobs without online access is also decreasing, and there are other issues, such as interacting with public bodies and accessing services following welfare reform.

“So there is an opportunity in Scotland, not just to catch up England on take-up, but through a joined-up approach to transform the landscape of how we exploit connectivity.”

First, however, must come those “pipes in the ground”. Improvements are also being rolled out in Dumfries, the Borders and Aberdeenshire, among other places, in a second Digital Scotland Superfast Broadband partnership with the Scottish Government, local authorities and others, but the Highlands and Islands project represents an incredible undertaking for BT. Their engineers have started work on an infrastructure project that will be using more than 800km of fibre to build a ‘backbone’ that will run from Campbeltown in Argyll to Brae on Shetland. They will also use a further 1100km of existing fibre that is already in the ground, linking in dozens of exchanges to ensure this web of fibre will extend from the backbone out into local communities.

In summer, around 400km of subsea cables will then be stretched across 20

Brendan Dick, Director of BT Scotland, emphasises the opportunity for a joined-up approach

points to the islands. This will be a huge task in a challenging environment, but what it will achieve will be measured in how the communities that will benefit then realise the potential.

“This will be a journey of some years,” says Dick. “This is phase one, and what will be really interesting, where there’s a hunger for more connectivity in more rural parts, is how people recognise this as an opportunity not just locally, but internationally, to transform how they gain value from it.

“The vast majority will get high speeds, but how to get this to the last few homes and businesses is a journey that will take time. Yet in these areas digital access can be particularly important, not just for business, but also for other reasons such as learning.

“The network is designed to be open to the whole communications industry, and the UK has one of the most competitive retail communications markets in the world. Fundamentally, what is going to drive the exploitation of this capability are the hundreds of providers selling services and applications at very competitive prices, and as prices drop the market grows.

“The upload speeds are going to be higher and guarantee a better service, which is particularly important not just for social media, and the creative industries, but also for video interaction and business tools. Digital delivery is increasingly an issue in the area of health, too, and in education. So in terms of delivering better services to people in our communities, the pressure on public bodies to drive efficiency is strong, and so the circle is back to participation.

“As digital platforms are changing how we deliver these fundamental services, issues such as the low take-up in areas of deprivation, which are well served by infrastructure, shows the hard part is understanding why. Is it to do with the numbers of older people or poverty or both?

Understanding this is very important for taking Scotland to the next level in terms of a society that is inclusive.

“BT, a company with a history of having employees living throughout our Scottish communities, strongly believes it has a place in answering this.

We need to listen to hard evidence, and to think more holistically about infrastructure. We have an additional role to help make Scotland successful. For BT there is a genuine desire to be part of delivering that future for Scotland and the UK, it’s part of our legacy, and we’re a big part of the engine driving this forward.

“The aspiration for 2020 is just the start, and here in Scotland, a country with a history steeped in innovation, there is now a great opportunity to take us to another level.”

Thursday January 9 2014 | the times

10

Business Insight

Communications

Our cable knit communities A better and faster broadband will help to create a virtuous circle in even the most remote areas

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he most ambitious digital infrastructure project in Scotland’s history will transform lives as communities are connected in some of the most challenging environments in Europe to underpin the successful economic development and regeneration of the Highlands and Islands.

Stuart Robertson, HIE’s director of Digital Highlands and Islands, is heading up the £146 million partnership infrastructure project, where BT will deliver high-speed fibre broadband to more than eight in 10 homes and businesses across the area by the end of 2016.

“This is the most significant upgrade to digital infrastructure involving public money ever in Scotland,” he says. “ The whole way we live our lives now means

connectivity is not only important but vital. Big changes to government departments and services mean internet access is now key, and it’s getting to the point where it’s almost essential to have access in the community, if not the house.

“High-speed fibre broadband in the Highlands and Islands will make a real contribution to our communities’ prosperity. Good broadband supports growth, particularly in remote areas. It opens up the door to new opportunities for existing local businesses and makes investment more attractive.”

Without this public sector support fewer than one in four properties in the Highlands and Islands would have fibre broadband through a commercial approach. This project will bring fibre broadband speeds of up to 80Mbps to 156,000 homes and businesses that will be served by more than 250 exchanges.

HIE is also providing help to communities to get online and information roadshows are being rolled out for the first areas around Inverness and Moray to go live early next year: Ardersier, Buckie, Milton of Leys, Fortrose, Hopeman, Culloden, Lhanbryde and Lossiemouth.

There are some particularly remote

corners that are beyond the reach of existing next generation broadband technologies. However, a part of the Highlands and Islands Next Generation Broadband Project will begin the job of looking for solutions. Alternative technologies such as wireless, satellite and advanced copper are being explored.

The Scottish Government has also launched the £5 million Community Broadband Scotland (CBS) initiative to provide advice and support for the most remote communities to help them secure their own broadband solutions.

“CBS is a parallel project that can help those communities that might miss out,” says Robertson. “Some people might say it’s most important to have connectivity

Stuart Robertson says that high-speed fibre broadband will make a real contribution to communities’ prosperity

in the areas where there are the most people, others argue it’s the people at the more remote edges of Scotland who have a greater need for connectivity. The fact is it’s crucial to both, and we must strive to introduce access to connectivity everywhere. There is much emphasis on the ‘84 per cent by 2016’, but let’s not forget, while it’s a great first step, we want to go further.”

This might be a huge infrastructure undertaking, with more than four and half times the money invested than in all previous telecoms project since the late 1980s, but installation is just the start.

“There is huge enthusiasm for this project, but we won’t just step back and say ‘job done’ once the infrastructure is delivered. It’s crucial in tandem we have initiatives that encourage businesses and individual people to use it — to go online and see the many benefits of connectivity. HIE is already leading on a project that has seen more than 100 businesses take individually tailored ‘digital health checks’. As well as business benefits the region benefits from higher take-up of services too. There’s a virtuous circle whereby money comes back in to help get faster broadband out to those who are currently not in the plan.

“We get caught up in discussing this in terms of the infrastructure, but the key point is about how people use it. So it’s important to demonstrate the potential, show how to make the best use of this technology. Connectivity is important on many different levels, from health care and education to communications and creativity – it’s not just for faster email.”

COMMERCIAL REPORT: QUILTER CHEVIOT

Wealth management’s stellar growth A recently-merged fund management company has seen double-digit growth in 2013 in its Scottish based operations

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Scottish wealth management company is celebrating double digit percentage growth in its funds under management during 2013.

Quilter Cheviot Investment Management’s offices in Glasgow and Edinburgh now manage over £674 million of funds – a growth of more than 21 per cent compared to the start of last year when it was managing about £554 million.

The company, which employs 21 at its Castle Terraces offices in Edinburgh and West Nile Street base in Glasgow, was formed last year when Quilter and Cheviot Asset Management merged.

The Glasgow and Edinburgh teams advise clients across Scotland and the company is one of the UK’s largest independently owned discretionary investment firms, with offices in 13 locations across the UK, Jersey and Ireland.

Quilter Cheviot CEO Martin Baines said the growth in Scotland had helped the firm to break the £15 billion barrier

for funds under management.

He added: “Everyone has worked extremely hard to make the merger of the two businesses a success. At the same time we have continued to deliver for our clients and are delighted to be able to celebrate such stellar growth across our Scottish operations.”

Quilter Cheviot focuses primarily on structuring and managing bespoke discretionary portfolios for private clients, charities, trusts, pension funds and intermediaries. It recently won a major industry award when it was named the best overall large firm at the Citywire

Wealth Manager Investment Performance Awards.

Head of the Glasgow office Alan Cameron said the company intended to capitalise on its record for consistency and quality of performance.

He added: “That track record is unquestionably helped by our position as an independent company which combines an unashamedly old-fashioned approach to client relationship management with a very forward-thinking approach to asset management.”

The head of the Edinburgh office, Alan Aitchison, said: “The merger of the two

Alan Aitchison, head of Quilter Cheviot’s Edinburgh Office says the merger has created a firm with significant resources

businesses has created a dynamic firm which has significant research and analytic resources so can bring the very latest insight and intelligence to bear. We are pleased to be part of Scotland’s international reputation as a centre of excellence in asset management.”

Mr Aitchison, who is also a Trustee of the Church of Scotland Investors Trust, added: “In 2014 we will be focused on continuing to drive fund performance and on cementing our marketplace reputation. We believe our proposition gives us real opportunities to win new clients and extend our reach with financial advisers and professional intermediaries such as lawyers and accountants.”

Mr Cameron, whose clients include trusts, private individuals and pension accounts, added: “There is a real sense of the UK and global economies turning a corner and that gives us real confidence for the year ahead.

“There is growing business investment, exports are picking up and will remain solid and we reckon the economy may grow by about 1.5 per cent in 2013 and about 2.5 per cent in 2014.

“The signs elsewhere are also encouraging. The US economy, in particular, looks as if it may achieve 3 per cent growth in 2014 and the Eurozone, notwithstanding long-term challenges, has avoided the meltdown that many feared.

“The anecdotal evidence in Scotland also suggests we can be optimistic. Our contacts and clients all report increased confidence, which we believe will be one of the key components of sustainable recovery.”

the times | Thursday January 9 2014

11

Business Insight

Food & drink

Fish farmers tip the scales in our favour The success of the salmon industry has seen Scotland become a major world player, reveals Rick Wilson

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ith a little more than four decades on the clock, Scotland is the now the world’s third largest producer of Atlantic salmon, exporting to more than 60 countries. It’s a fact of which the chief executive of the Scottish Salmon Producers’ Organisation (SSPO) is justifiably proud. He is similarly proud of the health record of the country’s salmon farming industry – “it’s exemplary” – and the fast-growing investment that has so impressively stimulated its economic performance.

“Last year saw the biggest year-onyear increase on record,” says Scott Landsburgh, referring at his Perth office to the organisation’s most recent economic report. “Up to nearly £62 million, bringing the total for the past three years to nearly £154 million.”

In the meantime, the industry delivered product to the value of almost £600 million a year, with exports of whole,

fresh salmon rising in 2012 to an all-time high. And for the third year in succession new lifeblood was injected into remote areas, with direct employment by SSPO members rising by 76 jobs. While Landsburgh says “we’re not a labour-intensive industry”, he calls such a figure “significant” when it boosts indirect jobs in infrastructure and processing.

In fact, 3,960 jobs are supported by the organisation’s members alone, with 3,548 in the Highlands and Islands, while over the piece the industry has benefited that region to the tune of £145 million. Indeed, with its buoyancy so reflected in the success of the communities it helps to sustain – where employees’ total gross pay has increased to a total of £61.5 million – Landsburgh sees its relentless growth as adding up to “one of the great economic success stories of modern times”.

The story began with the first recorded salmon aquaculture site set up in Scotland in Loch Ailort in 1970 with a production of just 14 tonnes, “but the industry didn’t really take off properly functioning and producing until about 1980, so in a way we are really only 33 years old”. In the meantime, it has seen not just that rapid growth – to 160,000 tonnes a year – but a “huge consolidation” among producers, from more than 100 involved companies to the current seven, with 90 per cent of production generated by five of them.

The SSPO economic report cites “sig-

nificant increases” in emerging markets, such as the Middle East and the Far East (64 per cent and 95 per cent). However, growing demand seems unlimited, with a suggested short-range target of an additional 50,000 tonnes to the market by 2020. Is that achievable?

“Quite easily,” says Landsburgh, “simply because demand is much greater than

There are significant increases for Scottish salmon exports in emerging markets such as the Middle East

supply. And when provenance, traceability and identity are being ever more valued by consumers, it’s heartening to know that our largest food export ticks all the boxes.”

While 60 per cent of production still stays within the UK economy, he sees the rising remainder destined to go abroad, with the European Union as a conspicuous target, noting that 65 per cent of all EU seafood consumption is imported.

“It’s no secret that we need to grow this industry, not only to supply worldwide demand,” he says, “but also to sustain and develop the communities in which we operate.”

But while the industry may help revive fragile communities, the fish communities are also fragile. So SSPO members take nothing for granted, spending large amounts of money and energy on keeping stocks in robust health.

Landsburgh is quick to concede that salmon farming is “not for the fainthearted”, by which he means managing welfare is vital “when we have some 80 million fish in the sea at any one time — that is a huge amount of money at stake”.

He adds: “Fish farmers must be able to protect their fish in the same way as a shepherd or chicken farmer would protect their livestock against foxes.

“We must always keep in mind the old adage: ‘Look after the fish and they’ll look after you’.”

Industry displays a healthy appetite for success JAMES GLOSSOP FOR THE TIMES

A bountiful natural larder and reputation for quality have seen the food and drinks industry serve the nation, says Heidi Soholt

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ome to some of Scotland’s most iconic food and drinks manufacturers, the Highland and Islands region has built up a worldwide reputation for quality and innovation. Some products define a country and, in Scotland, a large proportion of instantly recognisable brands are produced in the Highland and Islands. Goods such as salmon, whisky and shortbread are transported across the globe, and the region also boasts a thriving sector of small, innovative producers.

The influence of the food and drinks industry on the local economy cannot be overstated. It currently generates over £1 billion turnover per annum and encompasses more than 1,900 businesses, supporting around 25,900 full time jobs.

Much of its success is down to quality and diversity. The region is endowed with excellent raw materials and ingredients, high in healthy oils and compounds such as Omega-3. Producers also benefit from a strong support system, enabling them to compete effectively both domestically and overseas.

Scottish whisky is a major export, contributing over £2.5 billion to the economy nationally. The Speyside area has a high concentration of distilleries, including Aberlour, Cardhu, Glenlivet and Glenfiddich.

The area is also home to flagship Scots firms, Walkers Shortbread and Baxters.

Both are major exporters and employers

with the latter, famed for its soups and preserves, employing around 500 people locally.

Highland and Islands Enterprise (HIE) believes the food and drinks sector has significant future potential for growth, and is working with the region to achieve £525 million additional turnover by 2017.

“Not only is the food and drink industry a significant economic driver with great potential for further development, but the quality of our food and drink products plays a key role in defining our region to the rest of the world,” said Iain Sutherland, HIE’s senior development manager, food and drink.

“The sector comprises farmers, fishermen, fish farmers, food manufacturing businesses that process the primary food products, and businesses that provide the goods and services required up and down the food and drink supply chain.”

Salmon is arguably the area’s most important product. Currently exported to 64 destinations worldwide, the industry also supports around 6,200 jobs.

The Scottish Salmon Producers Organisation (SSPO) reported record figures for exports with significant increases in emerging markets such as the Middle East and Far East. Recent figures show the food export was worth £150 million in the first five months of 2013, compared to £132 million for the same period in 2012.

Gross pay received by employees, 90 per cent of whom are located in the High-

lands and Islands, increased to £61.5 million, with an overall benefit to the region of £145 million.

SSPO chief executive Scott Landsburgh believes current growth is sustainable. Major investment in new production facilities, £62 million in 2012, means that the industry is confident of achieving its 220,000 tonne target by 2020, with some 30 to 35 per cent increase in employees.

“From a market point of view, the demand for Scottish salmon is there – it’s no longer about creating that demand, it’s about creating the capacity to meet it,” commented Landsburgh.

“We need to do this in a sustainable manner that is in keeping with being good to the environment.

Scotch whisky now contributes more than £2.5 billion to the economy nationally

“If we can attain our goals, this will have a very positive impact on the local economy – not only in terms of creating direct jobs, but also those in ancillary services such as processing.”

Highland Council supports the food and drinks industry through a number of successful initiatives, including the Food and Drinks Strategy, which promotes local produce at events such as the Royal Highland Show.

“We also work with partners in the tourism industry to promote linkages between food and drink and hospitality, ensuring visitors are able to sample our world famous high quality produce,” said Councillor Thomas Prag, chair of planning, environment and development.

Thursday January 9 2014 | the times

12

Business Insight

Energy investment

Where the future can be renewable ‘Opportunity’ is the key word as Caithness and North Sutherland face change after Dounreay’s decommissioning, reveals Heidi Soholt

W

ITH not the least of them being its northernmost location and often-hostile climate, it’s an area well accustomed to challenges – from Norse rule to Highland Clearances – but Caithness and North Sutherland is all set to face yet another.

Contrary to what some might believe, that ‘faraway’ geography has never meant an absence of advanced thinking.

And this time it’s a seriously 21st century situation — caused by recent history.

This saw the region, though Dounreay, become the hub of UK nuclear research and development, and the challenge today — with cessation of electricity generation in the 1990s and run-down of decommissioning work – is how to achieve a successful transition from a nuclear-dependent economy to a more diverse and sustainable one.

“Of course there’s a challenge, but there’s every reason to believe we can rise to it,” says Sir Anthony Cleaver, chair of the body overseeing this transformation – the Caithness and North Sutherland

Regeneration Partnership (CNSRP) that includes organisations such as Highland and Islands Enterprise (HIE), the Highland Council and the Nuclear Decommissioning Authority (NDA).

With a vision to provide a healthy, economically stable environment by 2020, it is currently working with the energy and business service sectors to support growth, jobs and diversification.

It aims to deliver a targeted programme of inward investment as well as key infrastructure to ports, harbours, road, rail and air transport, and skills transition through the major partners’ investments.

The region is blessed with enviable natural resources in wave, wind and tidal power, already near to the UK’s first commercial wave and tidal energy sites in the Pentland Firth and Orkney Waters, and offshore wind energy sites in the Moray Firth. And the CNSRP believes the highest jobs growth will come from the renewable and oil and gas sector. Plans have been drawn up to build Europe’s largest tidal power project off the coast of Caithness.

What’s more, the area is also home to three of the five sites competing for the Scottish government’s Saltire Prize for marine energy.

It also boasts a new Engineering, Technology & Energy Centre (ETEC) in Thurso; and along with the neighbouring Centre for Energy and the Environment, this places the region is at the heart of research and skills development in marine energy.

Digital connectivity is another focus, with Next Generation Broadband (NGB) being rolled out across the area.

Tourism is also viewed as a growth sector, with a £6 million project underway

Sites such as Scrabster in Caithness are key to the economic rejuvenation of the area

to develop John o’ Groats into a worldclass visitor destination, and the newlycompleted first phase of the project — by Natural Retreats, Heritage GB and HIE — is the first step in establishing the landmark town as a leading destination.

A key advantage all round has to be a workforce with decades of experience in the nuclear industry. Skills gained at Dounreay are transferable to other sectors, such as renewables. Meanwhile, locally-based supply chain companies have diversified into new areas such as oil and gas, having secured contracts from other nuclear sites; and the area is now being used as a base for international companies such as Kongsberg Maritime and Subsea 7 which have a track record of servicing UK and international markets.

Businesses are well placed to take up new challenges, according to Caithness Chamber of Commerce, which delivers key aspects of the area’s diversification programme. “Our region has an exceptional supply chain track record gained from 50 years of servicing the Dounreay nuclear facility which has proved to be dynamic and innovative in the decommissioning work,” says its CEO, Trudy Morris. “These skills are transferable, as is the high-quality safety driven, can-do 24/7 culture and attitude. You don’t get an industry more regulated than nuclear which means the business community has proven track records in demanding environments under rigorous health, safety and environmental standards.”

CNSRP chair Sir Anthony concludes: “We have enough time to look ahead and decide what we need to do to bring in resources from elsewhere and build on what we already have here. The rundown of nuclear activity is a big opportunity — not a big disaster.”

COMMERCIAL REPORT: MEYGEN

Power to people has tide of support A giant scheme for underwater energy in the Pentland Firth is Europe’s largest tidal stream project. Rick Wilson examines the possibilities

T

here is surely a certain irony to be found in the super-ambitious underwater energy scheme currently getting underway in the Pentland Firth – for while it may be on the very outer edge of Europe, it is also the continent’s largest-ever tidal stream energy project.

The thumbs-up came from the Scottish government four months ago after completion of the statutory approval process with the regulator Marine Scotland, and the measure of the exercise’s scale was summed up by its first phase generating target of 86MW – or enough to power 42,000 homes, the equivalent of 40 per cent of homes in the Highlands.

However, the site – in the Inner Sound of the Pentland Firth off the north coast of Caithness – could eventually boast 400 turbines and yield no less than 398MW to make it the first commercial deployment of tidal turbines in Scottish waters.

The Inner Sound was assessed as the best site because of its maximum current speeds of five metres per second, suitable water depth and good access to the grid.

The company behind the giant project is Scottish-registered MeyGen – 100 per cent owned by Atlantis Resources Ltd – which has agreed a 25-year lease with the Crown Estate for an area encompassing about 1.4 square miles of fast-flowing water between the island of Stroma and the mainland.

It sounds promising for residents, but what of the area’s delicate wildlife? Ed Rollings, MeyGen’s environment and consents manager, comments: “We are committed to ensuring that the exploitation of this clean, predictable and sustainable energy resource is done in a manner that has no detrimental effect on the species and habitats in the area.”

But perhaps the biggest environmental plus-point of tidal power is its invisibility, revealing as it does nothing that might upset view-conscious residents or even a certain Mr Trump; especially as power delivery factors are comparable with wind.

“Yes, it was quite amusing when we did a before-and-after photo visual of

Dan Pearson, MeyGen CEO, says that local people are ‘thrilled’ with the project

the scheme,” recalls Dan Person, CEO of MeyGen, “and there was no difference! Clearly, this could be a very elegant solution to many of our power supply challenges.”

Happily too, there is little or no dissent locally. “Most local people are thrilled that it’s happening, bringing the prospect of jobs, and we are equally thrilled about how they offer a highly capable and intelligent potential workforce, thoroughly experienced in building nuclear equip-

ment. “When I took my first open days the questions included some detailed engineering points. It was quite refreshing, to be talking to such an on-the-ball community.”

This step forward for Scotland’s marine renewable energy industry will begin with a 9MW demonstration project of up to six 73ft-tall turbines, whose performance should prove to major investors like the UK and Scottish governments that starting the major construction programme – expected to take place on a phased basis until 2020 – will be a worthwhile exercise.

Mr Pearson adds: “The UK and Scottish governments have been very consistent in their support. They have not wavered. Through the hardest recession that we’ve seen they have stood by this project. Weaker governments might just have let it go, but their faith has been quite outstanding.

“While there is still much work to be done, the prospects for delivering the first tidal energy array in the Pentland Firth, thereby establishing a stepping stone to commercialising tidal energy, are very promising”.

It is hoped that construction, assembly and pre-commissioning of the offshore works (mainly turbines) will take place in Scrabster Harbour which – subject to commercial terms being agreed – will be used as the marshalling yard.