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Business Insight Thursday March 27 2014

New Town, new outlook

Edinburgh’s Charlotte Square regains its lustre for business

Marching on Battle plan in place for our new reserve forces

Thursday March 27 2014 | the times

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Business Insight

Welcome

Weather eye on the future Scotland’s climate change targets to cut emissions are ambitious. In this issue we hear from Ian Marchant, former chief executive of SSE about Scotland’s 2020 Climate Group, an organisation he formed to help achieve these targets.

In Edinburgh we talk to the man behind the refurbishment of Charlotte Square and his vision and quest to re-establish this grand Georgian landmark into a financial services hub.

The Scandinavians have shown us how to furnish our homes, write crime novels and make cars.

They’re also the face of decentralised banking, as we discovered when we talked to Handelsbanken, a Swedish bank, in its branch office in Edinburgh’s George Street.

Inside ...

Capital performance

Optimism is riding high in Edinburgh as it bounces back from economic gloom Page 4

Squaring up

How Charlotte Square is regaining its lustre as a top business location Page 5

The Times Business Forum

We ask how best to maximise the benefits of Edinburgh’s financial sector Page 10

Know the drill

How the plan to deliver a transformed reserve force is being implement Page 11

Teamwork targets The 2020 Climate Group is a unique organisation that taps into the skills of the private and public sectors with a mission to drive environmental change, finds Ginny Clark

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o deliver a sustainable economy, sustainable energy resources are vital, and the pursuit of a low-carbon Scotland requires its very own unique energy source. The need for a collaborative approach was recognised

by Ian Marchant in 2009, when the then chief executive of SSE became the driving force for creating Scotland’s 2020 Climate Group, a unique organisation that brings together both the private and public sectors. This group, in essence, was set up to tap into the skills and strengths of thinkers and doers in every aspect of Scottish society, in the drive to deliver the country’s ambitious climate change targets.

“The genesis of Scotland’s 2020 Climate Group goes back to parliamentary deliberations that preceded the Climate Change (Scotland) Act in 2009,” explains Marchant, who stepped down as chief executive of SSE last June and is chair of the group. “There was a debate raging about whether it should be a target reduction in emissions of 42 per cent or 34 per cent by 2020. I took a public stance that it was better to go for the challenging target, because this is how business operates; you set challenging targets and see how well you can do. That also meant quoting The Hitchhiker’s Guide to the Galaxy, by Douglas Adams, where of course, the number 42 is the ‘Answer to the ultimate question of life, the universe and everything’.

“The Scottish government listened.

However, I remember sitting in the parliament debating chamber and hearing it said that they hoped whoever had been calling for the ambitious higher target would help to actually achieve it. That struck a chord with me, and I then had conversations with a number of people including John Sturrock QC, of Core Solutions, Campbell Gemmell, who was then chief executive of the Scottish Environment Protection Agency (SEPA) and Lady Rice, the managing director of Lloyds Banking Group Scotland. What

we agreed on was the need for an organisation that straddled both the public and private sector to help meet the targets.

“In late 2009 we set up Scotland’s 2020 Climate Group, an unusual coalition of the willing, with companies such as SSE, Lloyds, RBS and the Edrington Group, public sector organisations Scottish Water, SEPA and Transport Scotland and also NGOs Stop Climate Chaos Scotland and the World Wildlife Fund (WWF) Scotland. I’d describe our relationship with the Scottish government as that of a critical friend. It’s about trust — the government trusts us to provide data and ask provocative questions. We’re advocates for the success of the mission to reduce carbon emissions; the group is not part of the government or beholden to it but we’re working with the same objective in mind. Government officials serve on most of our sub-groups and the government asks our opinions on relevant issues.”

The group’s role is both advisory and inspirational, sparking partnerships and collaborations as they identify opportunities that will lead to a low carbon Scotland and asking where resources and expertise are best targeted in six key areas: heat, electricity, waste, transport, rural land use and forestry and consumer behaviour and attitudes.

“We started out by setting priorities,” says Marchant. “We set 12 for 2012, 13 for 2013 and now 14 for 2014. The group itself is changing too, and this year we are in process of evolving the Land-use and Forestry sub-group involving the Scottish Wildlife Trust. Our peatlands are the focus, and conservation and restoration of our peatland ecosystems offer huge benefits to society. However, our real climate targets are for 2050, as 2020 is about a position of responsibility for my generation.

For our children’s generation, we’ve set up a 2050 group, with entrepreneur Robyn Haggis as project manager to shadow our group. The 2050 Climate Group will recruit members aged 18-30 and they will have a similar work ethos to the 2020 Group but will be focused on engaging young people with longer-term goals.”

Last year’s 13 priorities included that target, now achieved, of setting up a 2050 group, and the Peatland Project has meant they’ve become directly involved in working with Scottish businesses to raise awareness about the peatlands as a carbon benefit and also to help identify funding opportunities for land management and restoration. Retrofit Scotland has also been created, an online resource in the form of a virtual organisation that provides information on refurbishment projects and best practice, while also providing access to reports, assessment tools and software.

For Marchant, it’s important Scotland’s 2020 Climate Group is not viewed simply as a forum for the exchange of ideas, but as a catalyst for real change. Group members are directly involved, not just in helping deliver the priority messages but in driving through new policies and new

Scottish forum at the heart of helping business

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hen sports brand Puma published their first environmental profit and loss account (EP&L) almost three years ago, it was no gimmick and much more than a gesture of corporate social responsibility. Working with PwC and Trucost, Puma developed a methodology to quantify the tonnes of greenhouse gas (GHG) emissions and the cubic meters of water used both in their business and in their supply chain operations and then

applied values to account for the associated economic impacts. The cost of this natural capital for 2010, it was calculated, was not insignificant.

However, assessing natural capital through an (EP&L) account isn’t just a process for demonstrating how resources are being depleted — it’s also a way of helping businesses understand how they need to work smarter, to help that business survive along with the planet.

Last year Edinburgh hosted the first World Forum on Natural Capital — an event that sparked the

creation of the Scottish Forum on Natural Capital, with the five founding partners of the Scottish Wildlife Trust, Scotland’s 2020 Climate Group, the University of Edinburgh, the Institute of Chartered Accountants in Scotland (ICAS), and the Institute of Directors, Scotland, an initiative that is also supported by the Scottish Government.

“Natural capital is our environmental stock, the natural assets contained within global ecosystems which we draw upon to service humankind, including soil,water,

Natural capital is key to industries that include Scotland’s food and drink

the times | Thursday March 27 2014

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Business Insight

a clean break Victoria Barby, project manager of the 2020 Climate Group and its chair, Ian Marchant, view the body as a catalyst for real change

strategies within their own organisations. “Our society, our whole economy was built upon high carbon consumption, a path that has put the world under stress,” he says. “This is all about a generational change to a low-consumption society. This is a journey for the whole of society. However, many organisations are struggling with that adjustment, looking at what disruption it will cause them rather than what opportunities it can give them.

“This is why we have a call to action.

We all have to find our role in addressing the challenges of climate change, and for businesses this can mean new opportunities. There are some great examples out there, whether that’s about increased teleworking, reducing environmental impact throughout supply chains or looking at anaerobic digestion for food waste. In Scotland’s 2020 Climate Group, everyone has a great story to tell.”

The third in the 2020 lecture series, Myths, Morals and Money will be held in St. Paul’s and St. George’s Church, Edinburgh on April 28 from 4.45pm. For more details go to www.2020climategroup.org.uk

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Building a wider audience Retrofit Scotland — involving organisations that include BRE Scotland, Napier University, Architecture and Design Scotland, and Historic Scotland — is a collaboration that resulted from the 2020 Built Environment Subgroup. The website provides information on refurbishment projects and best practice, with modelling and assessment tools and finance mechanisms. The aim is to give the widest audience possible to knowledge and information already gained around retrofit, a Scottish national programme focused on CO2 reductions and energy efficiency in buildings. Case studies, such as the refurbishing of World Heritage Site tenements in Gilmour’s Close in Edinburgh, where a ground source heat pump was used to create energy efficient social housing, demonstrate real successes in what can be challenging projects. www.retrofitscotland.org

and the planet survive and prosper biodiversity and geological resources,” says Jonathan Hughes, chief executive of the Scottish Wildlife Trust. “Thinking in terms of natural capital means putting an economic eye on the invisible values that nature provides to make them visible.

“It’s really a process of management so businesses can make better decisions and avoid mismanaging the natural environment they are ultimately dependent upon.

Businesses also have an impact on natural capital which can affect

the provision of vital ecosystems services. In China, for instance, they are closing down factories with high water use due to serious depletion of aquifers around cities like Beijing, an example of how poorly managed natural capital can cause severe volatility within the supply chain putting businesses at risk.”

Here in Scotland, natural capital is key to industries such as food and drink, and tourism and is estimated to be worth up to £23 billion per year to Scotland’s economy.

The Scottish Forum on Natural

Capital is now involved, not only in calculating the monetary value of Scotland’s natural capital, but also the cost of depleting it.

“We want to engage with Scottish business and learn from industries who are already leading the way, such as the whisky industry, which is reliant on water and the use of peat, to think about the impact they are having, the risks of depleting Scotland’s natural capital and the huge economic benefits that will be created from protecting it,” says Jonathan Hughes.

The challenge is taken to a new level of urgency

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alking about climate change and how it can be tackled is only the first step. Taking those ideas and then persuading businesses and organisations to innovate and to evolve is a whole new level of challenge. As project director of Scotland’s 2020 Climate Group, Victoria Barby is directly engaged in working with big business and SMEs and the general public to develop actions and changes that will deliver Scotland’s low carbon targets.

Barby has been involved, as a member, in the group, since the start in 2009. Seconded from RBS, she says her new role in the group has taken her further into what she describes as “the doing side”.

“The group is a platform for talking about the opportunities for changing and improving,” she says. “However, we’ve moved away from the idea of focusing on blame to looking at what can actually be done to mitigate climate change.”

One of the first initiatives was the launch of the Envirowheel just over two years ago. The group teamed up with Scottish Business in the Community and BT Scotland to create a unique online environmental support tool. The Envirowheel helps businesses to identify the help they need to save money and become more sustainable. Each section of the wheel shows the range of help available in key areas of the Scottish government’s Climate Change Delivery Plan — energy, transport, waste, water and behaviour change, in addition to business improvement, finance and legislation.

“It’s simple but effective,” says Barby. “A clear tool that businesses can use to apply across their supply chain, so it has the potential for a snowball effect.”

Retrofit Scotland is another online initiative that provides a range of information across retrofit energy efficiency, particularly valuable for any planned projects, where previous experience and practice can give vital detail for those looking to build a business case. Now there is another important resource, the Choose Another Way website, aimed at assisting organisations in Scotland to help reduce travel costs for their employees, along with the environmental impact.

“Businesses can consider a number of options to help reduce travel emissions,” says Barby. “This might include working from home, conference calling, fleet reviews or cycling schemes.” The group had also been working with businesses to help prepare them for the zero waste legislation brought in last January, where organisations must sort and separate all their rubbish.

“As members of the group, we also have the opportunity to go back to our own organisations where we can use peer pressure to help other businesses take on new ideas and make use of existing support and information,” says Barby. “Because we are a membership organisation it’s up

to those members to put forward ideas, it’s a bottom-up structure — that is then active in helping develop wide-ranging policy and delivery.

“One of our key activities is providing a business case for low-carbon opportunities. For example, although we produce a lot of heat through home and business energy use and industry production, it’s all then wasted. Heat is a valuable resource and we’ll be working with the Scottish government using its ‘heat map’ to help businesses to look and see what they can do with it.

“Climate justice is also a key issue.

More exciting than carbon offsetting, it makes more sense to actually be working with communities to find ways of linking economic growth and development with climate change and sustainability. It’s about the circular economy, rethinking business models and looking at making the whole supply chain more sustainable.

Look at what has been achieved at the Gleneagles Hotel.”

Gleneagles chairman Peter Lederer, vice chair of Scotland’s 2020 Climate Group and recent winner of the VIBES Lifetime Achievement Award, has been recognised for leading the way with a variety of business innovations, including installing a biomass boiler, recycling everything from glass, cardboard, paper, and cans to even plastics and sending biodegradable waste from the hotel to a local farmer for compost — then bought back by the hotel for use on the estate. Even wine corks are sent to the Botanic Gardens in Edinburgh for use in drainage.

Clearly, keeping the lowcarbon conversation going is hugely important.

“Last year the group kicked off a series of lectures and debates designed to provide an opportunity for networking and for bringing more interested people into the 2020 fold,” says Barby. “Nuclear energy and extreme weather events have been among the previous topics. On April 28, the former Bishop of Liverpool will be coming to Edinburgh to talk about morality and climate change, and climate justice. It’s a free event, with all welcome.”

The Right Reverend James Jones, when he was still Bishop, proposed his Liverpool congregation should ‘give up carbon for Lent’ some years ago, a move that was soon taken up by others, including Labour leader Ed Miliband, and the so-called carbon fast is now a popular annual campaign. Cutting down on car use, taking a lightbulb out of one room, making sure TVs and computers are not left on standby — these are all small, simple acts that can collectively make a huge difference.

It’s a principle that Barby says Scotland’s businesses are embracing too. “What I find really interesting is that businesses have a real opportunity here to try to help meet the low carbon targets in Scotland, and we can help make sure they can innovate and collaborate as they do so.”

It’s about the circular economy, rethinking models and making the supply chain more sustainable

Thursday March 27 2014 | the times

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Business Insight

City of Edinburgh

Resurgent face of a capital city

IAN BRITTON

Optimism is high – and with increasingly good reason, the chief executive of Essential Edinburgh explains to David McWilliams

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dinburgh’s city centre has emerged from recession with ambitious plans to recover the visitors that it lost over years of economic weakness and construction upheaval.

“We’re very pleased with the footfall trend over the past couple of months,” says Andy Neal, chief executive of Essential Edinburgh, the organisation behind the Business Improvement District (BID) where businesses identify opportunities to benefit their own activities locally.

Footfall in Edinburgh was up 6.6 per cent in January year-on-year compared with 3.4 per cent for the UK and there was a marked 11.8 per cent rise in post6pm evening footfall to encourage more businesses and attractions to open later.

Growth in footfall has been outstripping growth in retail sales.

“This highlights Edinburgh’s strengths as a city centre that appeals to both locals and tourists: we are second only to London as a tourism destination in the UK,” says Neal.

It is also a bounce back from the disruption suffered while tram works were being installed. Such were the diversions and traffic delays that some people stayed away. Now the trams are going through test runs and the city centre looks so much better, shoppers and leisure visitors are returning.

To the outsider, Essential Edinburgh’s most visible face is its current marketing campaign, which includes television advertisements. It targets people who live within two hours by car and shows that there is so much to do in the city centre.

“It’s to keep up the momentum of get-

ting the locals back over the next couple of years,” says Neal. “We hope people from the suburbs will come three or four times a month. For people from, say, Dundee we hope for one or two visits a year. As the capital, there are unique things here.”

Even during the tram disruption, footfall held up fairly well during the week as locals still came in to work. Much of the current campaign’s thrust is aimed at weekend visitors.

“We want people to choose us for shopping, but Edinburgh has to re-present its credentials” says Neal. “These are very strong. There are many things you can do for free too, such as visit the National Museum of Scotland, an incredible experience.”

Big name stores — some unique to Edinburgh, such as Harvey Nichols — are not the only lure for shoppers. “We win out because we have many fantastic, independent, boutique stores in places such as William Street and Thistle Street in the West End,” says Neal.

“The big win compared with out-oftown shopping is the whole Edinburgh experience. If you want something to eat and a glass of wine then we have some of the best hospitality businesses in the world. You can take a break from shopping to experience that.”

Launched in July 2008, Essential Edinburgh’s life has spanned the slide into, and re-emergence from, recession. It has made a difference, Neal maintains.

“We have clearly added value as a BID,” he says. “The proof was that last May we went to a re-ballot and the percentage of businesses that voted went up from 44 per cent in 2008 to 58 per cent, showing much greater engagement. Those voting ‘yes’ to our continuing rose from 58 per cent six years ago to 78 per cent. Clearly,

they saw we were adding value and liked our current five-year business plan.”

If the first five-year plan was about how much quicker Edinburgh could grow than other areas, the agenda for many businesses quickly became more about survival.

One project developed to help them used the BID as a buying group that could negotiate for up to 600 businesses.

Trade waste was the first such project.

A preferred service provider was chosen.

“They offered a good price based on a volume discount and, importantly, encouraged businesses to separate waste into recyclable groups.” Neal explains.

“Some 80 per cent of this trade waste was going to landfill when we first started that project.”

214 of the 600 businesses in the BID now use the preferred supplier at a cumulative saving of more than £250,000, Neal says.

Working closely with utilities — gas, electricity, water, telecommunications and merchant services such as credit card providers — has also delivered benefits.

“We now have 30 or 40 businesses saving more on their utilities than they pay in

Business in Edinburgh has emerged from recession with a shift in its priorities

Andy Neal, CEO of Essential Edinburgh

their annual levy to the BID,” says Neal.

He continues: “These initiatives have seen the BID add value in tough times by helping the bottom line. Meanwhile we continue to work on the top line, how to get more people into the city centre and increase their spend.”

Essential Edinburgh has been on its own learning curve. “We have had to learn how to communicate benefits more clearly to businesses,” Neal says.

One example: a campaign called Checkout through which some 170 businesses and the police share information and CCTV pictures through Essential Edinburgh to counter shoplifting. “Members signed up to the scheme can stop shoplifters at the door or watch them to stop them stealing, or arrest them if they do,” Neal explains.

This is one reason, he maintains, that retail crime in Edinburgh city centre has fallen by around 30 per cent over three years. This measure was initially chosen as the main metric for presenting the benefits of the campaign to businesses.

When Neal arrived with a marketing background from drinks giant Diageo and brewer Scottish & Newcastle, he realised that the benefit that businesses would understand most was if a reduction in stock losses could be demonstrated.

“Several of them had not really looked at it that way and realised they were saving a lot more than their levy to the BID.” In the economic upswing, priorities are shifting. “There are still difficult times ahead. I would not say that all our problems are solved, and we will continue these programmes,” says Neal. “But we are now concentrating too on the top line and asking how we can accelerate the slight upturn.”

The current marketing campaign fulfils a major promise made when the latest five-year plan was presented last year.

Having pledged to put £400,000 on the table in the event of a ‘yes’ vote, Essential Edinburgh was able to lever in another £600,000 — from Marketing Edinburgh, which promotes the city, and the economic development department of Edinburgh City Council — to create a £1 million budget.

“Research told us businesses wanted the marketing campaign,” says Neal. “It is gratifying that we have been able to do that within a year.”

The TV advertisements have been running since February 24 and a poster campaign will be in evidence over the course of the year.

The push is now moving into an events phase. There will be fashion-led events at the end of March into April. A focus on health and beauty will follow in May. Film-based activities in June will lead up to the Edinburgh International Film Festival. Food and drink will feature in September. “These activities in the city centre will bring locals back in,” Neal says.

A resilient economy that attracts new business is key to prosperity

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ttracting new businesses to Edinburgh is critical if we are to ensure that Scotland’s capital remains the most prosperous UK city outside London. We are starting from a strong Cllr Frank Ross position as our economy is resilient and diverse. The number of jobs in the city has now recovered to above the pre-recession level. In the financial sector in 2008, 375 registered enterprises employed 36,000 people

in Edinburgh and by the end of 2013, this had increased to 485 employing an estimated 40,000 people. And our ‘Strategy for Jobs’ has been implemented to support the creation or safeguarding of 20,000 jobs in the years to come.

Twelve development sites have been identified in Edinburgh, which if transformed into exciting new ventures, could be worth up to £2.41 billion with the potential to create 20,000 jobs.

International real estate events such as MIPIM and Expo REAL are attended by thousands of potential investors from hundreds of countries and our attendance at them ensures investors are aware of the opportunities Edinburgh has to offer.

Our strategy is award winning and for the past three years Edinburgh has been ranked top of its category in fDi magazine’s European Cities and Regions of the Future 2014/15 awards. When the big businesses arrive they often create a knock on effect as they generate work for small to medium sized businesses and start-ups.

The council offers support through a one-stopshop to all businesses in our headquarters. This integrates Business Gateway with other frontline services including planning, recruitment support and building standards.

Responding to a particular request for more flexible workspace, we have opened four incuba-

tor spaces that include Entrepreneurial Spark in Edinburgh Park and the Creative Exchange in Leith. We are also leading an “interspace” initiative to connect to other incubators in the city to help ensure that they are all used to full capacity and can feed of each other.

Finally, but importantly, we also have a responsibility to our help our young people into employment. Our Edinburgh Guarantee programme is spreading throughout the city where companies are pledging jobs, paid work experience, training, or mentoring and other support every day.

Councillor Frank Ross is Convener of the Economy Committee at Edinburgh City Council

the times | Thursday March 27 2014

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Business Insight

Feature At Handelsbanken in Edinburgh the philosophy is decentralisation – and it’s working, finds Neil Clark

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ur banking sector in general has not received a glowing press in recent years.

When will they ever learn, we ask with increasing incredulity, as a litany of stories about executive rewards soaring while profit dips continue to hijack the headlines. In Edinburgh, up a staircase and behind a discreet Georgian façade in George Street, Handelsbanken is ploughing a remarkably different furrow.

Its branch manager, Mike Mullins, refutes the excuse that a bank needs to pay its staff stratospheric bonuses to ensure that it stays competitive and successful.

“We don’t pay bonuses,” he says matterof-factly. Neither does the bank set sales targets or market itself other than locally, and largely by personal recommendation.

However, when the Edinburgh branch of the Swedish-based bank opened in 2009 it was the 64th to be opened in the UK and over recent years one has opened on average every eight working days. “There are now 172 branches across the UK, more than 100 of those opened during the economic downturn,” adds Mullins.

Founded in 1871, Handelsbanken has long been a household name in Sweden, and now has more than 800 branches in 24 countries with more than 11,500 employees. It commenced activities in the UK in 1982 and from the outset it announced that it would pursue “true banking activities” with deposits and loans, with a focus on the local banking market.

It’s a philosophy that has endured — one that emphasises decentralisation and proclaims that ‘the branch is the bank’.

And it has delivered consistent results — last year the financial data and media company Bloomberg reported that in terms of financial stability it was Europe’s and one of the world’s strongest banks, ranked below Hong Kong’s Hang Seng bank and just two below US giant Citigroup.

It now has five Scottish branches and is planning to open a second branch in Edinburgh in the city’s Haymarket, an area currently undergoing a major property development.

“We came to the UK initially to serve Scandinavian customers out of London, then opened our offering to customers beyond that base. About 20 years ago we started opening further branches in response to the growing demand seen across the UK for local relationship banking”, says Mullins, who explains the rationale for decentralisation. It is, he says, about knowing the needs and intimately understanding the profile of your own parish.

“We work to a church spire principle, so we only deal with customers in our own locality. When we set up in Glasgow and Edinburgh the branch territory was quite wide but when we opened in Aberdeen, Perth and Stirling in 2012 we transferred customers to those branches, so they could be served more locally. The principle, which comes from Sweden is that if you

Mike Mullins points to a banking philosophy of long-term consistency

Banking devolution that delivers results stand on the top of the church spire, the tallest building in the town, you should be able to see all your customers from there.”

After the recent crisis which engulfed Britain’s high street-cum-investment banks there was much wringing of hands and a wistful looking back at more measured times, the good old days when every manager had a personal relationship with the customer and was able to tailor their lending and bespoke financial package on the basis of that knowledge.

That, Mullins points out, is the way that Handelsbanken has operated since 1871. “It’s nothing new. This is a consistent, long-term approach underpinned by old-fashioned values. We are continuing a philosophy that has been practiced by the bank across the Nordic Countries for the past 143 years and that’s why we are increasingly seeing customers join from other banks.”

And that has not been the result of a sophisticated marketing campaign. “We don’t market ourselves nationally; we grow by word of mouth and on the back of building relationships. For example, in any deal we do there will be accountants and solicitors involved who find out about us, see the service we offer and how satisfied our customers are. It builds from that, as customers tell their colleagues, contemporaries and advisers.”

Neither does Handelsbanken divert their customers’ enquiries to a call centre.

“Everything is dealt with in the branch: in Edinburgh we have 12 staff and you can phone up and talk to one of us. Quite often a busy business person will phone us in the morning with an issue and we will contact them between 4pm and 5pm

having done our best to resolve it. Our customers deserve a different approach to their old bank, where it can be very difficult to speak to the same person twice.

“Basically, as a Handelsbanken branch manager, your branch is your franchise and everyone buys into that culture. It’s crucial that your staff are very focused on customer service and relationship management.”

It has been a change of culture for Mullins, who joined the bank 18 months ago as Edinburgh branch manager and whose career spans 31 years building his knowledge in Edinburgh, Manchester, London and New York. “The staff in this office have more than 250 years of banking experience between them and we know the Edinburgh market, we know the customers and have built up relationships with professional advisers.

The bank is also a mortgage provider and its customers are split roughly 50/50 between private and corporate clients, bring with them a reassuring degree of personal financial probity. While they are not necessarily high net-worth individuals, the bank has a low risk tolerance and the business model is focused on underwriting and managing ultimate credit default risk at branch level.

“No, we aren’t mass market,” agrees Mullins. “But we do focus on the customer’s ability to repay, so we can take on young professionals if they can afford to repay the debt and if they have the prospects of growing with us then we will support them.

“We are looking for a long-term relationship with the customer: we’re not saying that they have to be earning

As a manager the branch is your franchise and everyone buys into that culture

£50,000 or £100,000 — we look at each case on its own merits, ask if it’s a customer who is looking for a long-term and strong relationship management, one we can support throughout the life cycle and those range from students through to pensioners.”

Staff at the bank benefit from a unique profits-sharing system: Oktogonen, instituted in 1972. The Oktogonen Foundation holds more than 10 per cent of Handelsbanken’s shares, making it one of the largest shareholders. In a remarkable departure from most staff rewards schemes, every member of staff receives the same amount — not the same percent.

“This is very democratic, which is a good thing, because it obviates the friction that can easily be created by bonuses. It also steers all Handelsbanken employees in making sound, long-term decisions in the best interest of both our customers and the bank ,” says Mullins.

He appears to be savouring the degree of freedom and responsibility invested in him by a bank with no sales targets, no bonuses and no budgets, which it believes risks creating unwanted incentives and behaviour. Instead, the bank says that it focuses on being flexible and quick to adapt to changes in the business environment. Its record during the recent financial crisis appears to give this a high degree of credence.

“Here everything is focused on the customer, it’s what we call the arrow: at the end is the customer and their nearest contact point is the branch. Everything further back, including head office, are support functions for my team and I in the branch; that is the key differentiator.”

Thursday March 27 2014 | the times

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Business Insight COMMERCIAL REPORT: THE AIMDAY INITIATIVE

Academic Industry Meeting Day in Edinburgh will bring academics and business together in a new and innovative exchange of ideas, writes Tom Donald

Companies were delighted with the expert feedback they received and the academics gained insights into industry

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hat’s the problem?

The good news for any company anxious to have a perplexing technical, scientific or engineering challenge solved, or at least illuminated, is that a new light is about to be switched on by the University of Edinburgh as it adopts a collaborative knowledge-exchange idea previously employed only in Sweden.

The AIMday initiative, as it’s called, does what it says on the tin. It stands for Academic Industry Meeting Day and it earmarks a certain day, in this case June 18, in which brain-stretching aims will be presented to the university’s academic experts by industry executives – in the form of one specific question each that captures a particular company objective.

“It will be organised as a series of individual workshops within that full-day time frame, with teams on each side of the table discussing submitted question based on the event’s chosen theme,” explains commercial relations executive Alex Cassidy. “By setting the questions themselves the companies and organisations also set the agenda for the day-long event.

“Each question is then analysed before the company’s representatives in small group sessions with academics who have a specific competence and research interest within that topic. It will be looked at in general terms and in a relaxed, informal way. The meetings won’t be formal question-and-answer sessions. But they should define a direction of travel towards solving a given problem.”

AIMday is thus designed as a launchpad to generate further cooperative development between the parties – to create fruitful relationships and opportunities in the form of contacts, ideas and collaborations.

Not to mention additional revenue for the university, whose commercialisation office, Edinburgh Research and Innovation (ERI), is already recording “real interest” in the forthcoming event.

“The university has long had worldclass research, expertise, facilities and inventive solutions capable of helping the business world,” says ERI’s marketing manager Alex Proudfoot, “and we want companies to know we are here as an accessible resource.

“We passionately believe in translating this know-how out of the labs and into industry but we have been somewhat challenged in delivering.

“All universities are trying to establish the best methods of knowledge exchange and, up to now, this has taken something of a scattergun approach. This is why we are encouraged by the prospect of the structured method offered by AIMday.”

The idea is an unapologetic borrowing from the Scottish university’s old friends at Uppsala University, famed for its

The University of Edinburgh is the first institution in the world outside Scandinavia to be named an approved host for AIMday

Sights set for a new level of cooperation world-class research – and its long history as Sweden’s oldest university, founded in 1477. Not surprisingly, as the essential link between the universities, Ms Cassidy has been spending some time there recently, garnering advice and hints and witnessing the system in action.

She has concluded that there are only winners among AIMday attendees, as both parties gain new perspectives – the help-seeking companies get up-to-theminute research and expertise while the academics get “a better picture of real-life business challenges”.

In other words, the university sees the initiative as a unique opportunity to give academics valuable insights into what kind of issues companies are having difficulties with and how these might relate to their own research.

Edinburgh’s higher academic institute is the first in the world outside Scandinavia to be an approved host for AIMday – a registered trademark owned by Uppsala University – which contends that by working collaboratively on real industry challenges, fresh understanding and perspectives can be brought to company strategic objectives. Surveys have demonstrated the uniqueness and effectiveness of the AIMday format, plus the fact that it leaves both company representatives and academic scientists satisfied with their participation.

Launched in Sweden six years ago, its roots are in the Ångström Materials Academy at Uppsala which – unsurprisingly – chose materials as its first theme.

Success was immediate. Companies were delighted with the expert feedback they received on their day-to-day challenges and the academic scientists gained valuable insights into typical issues faced by industry.

But more importantly, while ideas for further research were generated and various forms of collaborations established, specific problems were solved.

Since that first appearance in 2008, the Swedish AIMday has tackled no fewer than 20 subjects – such as ageing, cancer, diabetes, energy, diagnostics and imaging

– and seen the concept continue to flourish, generating conspicuous gratitude and success among business interests. It has also been extended to other “pure” disciplinary areas, like life science, humanities and social sciences.

Modelling and simulation will be the dual theme for the first event to be held in Edinburgh, where high hopes of similar success stretching into the future are being entertained – after the June event, another is already being planned for September.

Modelling is a tool used when a system is too complex, too costly or too vast to measure on a real scale. Simulation technology has long been included in the body of knowledge of engineering management. The combined discipline has proved effective in reducing costs and increasing the quality of products and systems, and is becoming increasingly important across all industries.

AIMday Modelling and Simulation will help to identify ways of examining and testing various scenarios by translating many business problems which academic scientists can relate to, therefore pinpointing where improvements can be made using these techniques.

“Businesses can often face what they might perceive as insurmountable challenges to get a product or service to the next stage of its evolution,” says Ian Sharp, ERI’s commercial relations manager. “With this modelling and simulation focus, AIMday will be ideally suited for many businesses hoping to seek an academic partner with the pedigree to work through a range of options for testing and experimenting with potential improvements.

“Through our science and engineering disciplines, we cover a broad range of such research, including product life cycle modelling and designing model organisms for biological tests and access to a range of simulation software for physics and engineering applications.”

To give a specific example of resources available: the University’s College of Science and Engineering holds seven schools, including five engineering institutes and more than 1,000 research staff.

“We’re thrilled that our university has been chosen to host an AIMday and we’re hoping for a good level of engagement from the industrial and business communities,” concludes Ian Sharp.

Raise your sights and take aim Registration is now open for the University of Edinburgh’s AIMday business-academic event to be held on June 18 in the Swann Building on the King’s Building Campus and themed on modelling and simulation.

AIMday will focus on companies’ challenges and needs for new knowledge in that area. The meeting will centre around workshops where questions raised by the companies are discussed together with academic scientists and experts from several different disciplines.

Enquiries — and example questions — are welcomed from both companies and public organisations.

It starts with your question Submit yours to the University of Edinburgh’s academic experts by April 11. This is your free registration deadline for participation in AIMday.

While researchers can sign to address questions up until May 30, the date of the meeting is June 18.

Equally important, of course, is the follow-up programme subsequently agreed between the parties.

Contact the Commercial Relations team of Edinburgh Research and Innovation Ltd: crm@ed.ac.uk Or visit: www.aimday.se/modelling-simulation

Special feature

Charlotte Square The beginning of a new enlightenment

One of Britain’s most distinguished Georgian squares has seen its lustre restored in a development with a long-term approach to custodianship, writes David McWilliams

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HE Charlotte Square Collection, a farsighted property development launched in 2010 just after the UK and Scottish Economies slumped into the Great Recession is emerging as one of the places to be as revived growth becomes entrenched.

There has been a flurry of lettings in its august environs in recent months and more were in the offing as Business Insight went to print.

Scoban, Scotland’s newest private bank is at 9, Charlotte Square, a townhouse redeveloped on the north side as high quality offices. The office is the headquarters for Scoban, which is raising £40 million to make loans and take deposits.

Privately-owned investment manager Ruffer LLP is at 31, Charlotte Square on the south side of the square. Cornelian Asset Managers are next door in number 30. Both properties were completed only last November.

The Charlotte Square Collection was named as one of the best new property developments in Scotland at the inaugu-

ral Scottish Property Awards last month.

If it is not yet quite like old times when Charlotte Square was the best Edinburgh address a boutique financial services firm could have on its calling cards, it is proof positive that the lustre is returning to a location that lost its cachet in the 1990s as tenants relocated to spanking new developments — such as Saltire Court and the Exchange District — providing facilities fit for the modern IT age and acres of open plan space.

In short order, law firms Dundas & Wilson and Shepherd & Wedderburn, investment managers Martin Currie, fund managers Ivory & Sime and others opted for modern premises and moved from the square.

Unable to respond, not least because of strict planning controls in a sensitive conservation area, Charlotte Square started to decline.

“What set in then was a process of managed decline around Charlotte Square,” says Nick Ball, director, Corran Properties, which acts as developer and asset manager for The Charlotte Square Collection and is itself based at Number 18. Corran became involved in 2010 after owners Fordell Estates Limited ac-

quired properties on the west side of the square.

A large part of the problem was that this magnificent square — considered by some to be the architect Robert Adam’s great masterpiece even if it was completed after his death — remained in multiple ownership due to its origins as 46 individual housing plots, conceived as part of James Craig’s first New Town Plan.

During the economic travails of the early 1990s this led to multiple owners facing vacancies and voids and unable to take an estate approach to the renovation of the whole square rather than individual buildings.

This was quite unlike London’s great squares — Grosvenor, Bedford etc — that tended to be in the ownership of single estates and could be managed coherently.

“By and large, these were developed by the family estates that still own them to this day,” Ball notes.

“Three hundred years of ownership and management has enabled them to constantly evolve, change and reinvent themselves while remaining bustling, lively and popular with occupiers.”

For Charlotte Square, things began to change with that 2009 acquisition of eight properties on the west side in a single portfolio.

Almost all of these properties were tenanted and income producing, an investment proposition rather than for development.

However, the opportunity to reinvigorate the square came about as a consequence of Fordell Estates’ acquisition of

The vision was to return the square to its position at the epicentre of boutique financial services

six town houses on the south side of the square that were occupied as a headquarters and visitor centre for the then owners, the National Trust for Scotland.

“All of a sudden, it was possible to take a long term custodianship approach to a growing portfolio of property in Charlotte Square which was effectively becoming an estate nearly 230 years after its time,” Ball says.

“It’s unusual throughout Scotland because of the previous feu system of ownership for many of the country’s great squares.”

The vision became, in Ball’s words, to “restore the fortunes of Charlotte Square and return it to its pre-eminent position as the epicentre of Edinburgh’s more boutique financial services sector”.

That said, the ‘old’ Charlotte Square was not exclusively about the financial sector. It was also favoured by leading law firms such as Dundas & Wilson, Shepherd & Wedderburn, and Maclay Murray and Spens.

“But it did have that gravitas for financial services,” says Ball. “It really does resonate, as we have discovered on our travels around the UK. It is the Edinburgh address that is recognised elsewhere, particularly in London, and more so than other streets in Edinburgh’s New Town and West End.” The result is just the kind of Grade A office space that occupiers want as Edinburgh’s continuing economic diversification adds demand from knowledge based industries to that from traditional occupants, financial and professional services.

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Charlotte Square Collection

“It is important that developments such as Charlotte Square are coming through to provide the vital stock for Edinburgh to attract more businesses,” says Angela Lowe, partner, business space, at the Edinburgh offices of international estate agents Cushman & Wakefield, letting agents for the development.

“As a Grade A office in the city centre, Charlotte Square addresses a critical factor — location — that occupiers are looking for as work-life balance becomes more important in recruitment. Companies want to know that staff can get to work and have amenities such as restaurants and bars on their doorstep. That’s the biggest selling point of Charlotte Square, lying at the heart of a vibrant city,” she adds.

The connectivity of Edinburgh Airport is also helping as it adds more direct international flights, while Terminal 5 at London’s Heathrow airport is a much easier link than before for travellers from Scotland, she adds.

Given the conservation constraints, Corran conducted an intensive programme of study tours to assess best practice in locations such as London.

They took soundings from The Crown Estate, a large owner of property in London’s West End and Mayfair and particularly the St James’ Estate.

“One thing the head of St James’ told me was that the difference between property and estate ownership is public realm,” says Ball. “That is very logical.

While we can lavish care on the buildings, if what you see from the windows is not up to scratch then you are not doing yourself any favours.”

Local planning consent has been secured for Corran to work on the adopted public areas of the square and ministerial approval is awaited for this.

“One of the great things is that the smaller numbers of proprietors on the

You approach these buildings and their 230 years of history with a degree of trepidation square are all now very like-minded, long term owners. They want to see it prosper and for the best environment to be created,” Ball says.

“So we are able to think more about the use of the Square, about the Edinburgh Book Festival to which it is home, and about improving those areas, which will be to the benefit of all the proprietors and of course the city itself.”

Robert Adam’s architectural heritage brings “huge responsibility with it” Ball says. “In approaching these buildings, you do so with a certain amount of trepidation because you are tinkering with 230 years of history. That said, they cannot be museum pieces. The buildings need to have a life for the next 230 years.”

There is clear recognition among heritage groups — Historic Scotland, Edinburgh World Heritage Trust, The Cockburn Association and others — that the buildings must be put to good use, he adds.

“During our process of applying for planning permissions and listed buildings consents we adopted an approach of engaging very completely with all stakeholders, particularly those in the heritage field, so that we had consulted fully and widely before our planning application was submitted,” he says.

“You cannot please all of the people all

of the time, but I feel we achieved a tremendous consensus that we were treating the buildings very respectfully and giving them every opportunity to thrive in future. When consents were granted it took just three to four months from application, which for a development involving buildings of such importance is almost unheard of. ” He adds: “We have nothing but praise for the way Edinburgh City, Edinburgh World Heritage Trust and Historic Scotland engaged with us — it has set a real template for the future for us.”

Remarking on the boutique financial services firms already attracted to The Charlotte Square Collection, Ball points out that they are all very client-led, personal businesses.

“They are able to see the buildings for the value that they bring to the business, not simply as a place to have desks and telephones,” he suggests. “The front door says something to their clients. The interiors speak of the quality of the business being operated there — not in an ostentatious way but in a very classical one.”

While this is all well and good, it is worthless if the quality of the accommodation is not exemplary from a technical perspective, including modern communications.

“So we have ensured that these buildings provide a 21st century environment in which to work,” Ball explains.

“That includes the quality of cabling, data communication, complying with the standards set ordinarily for brand new buildings as well as the quality of lighting, and the heating and cooling systems.”

Much of this would have been difficult if not impossible to do 20 years ago when the exodus from Charlotte Square was in full spate, but technical advances have removed obstacles.

“Modern features can be installed and provided in these environments without

detracting in any way from, or damaging, the historic fabric of the building,” Ball says. “It makes all the difference for occupiers of the kind we are attracting.”

For many of these businesses, he suggests, “the combination of beautiful classical elegance and modern facilities is like welcoming people into their home — very different from an anonymous glass and steel box on a business park”.

How has the development fared over the plunge into an economic trough and the subsequent grinding, then convincing, recovery in GDP? “Over the past two or three years we have seen a bit of confidence coming back in financial services and that extends to start-ups, either small teams of people or individuals breaking away from larger organisations to launch on their own,” says Ball.

Scoban, with its emphasis on clientfacing customer care illustrates the point “That applies not just to the financial sector,” Ball says. “We are seeing it in other

Nick Ball of Corran Properties says that the boutique financial services firms attracted are very client-led, personal businesses

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Business Insight

businesses as people emerge from recession, readjust and remember what it was that made businesses successful in the first place.”

So while The Charlotte Square Collection has not been developed at the top of the market, its timing has not been terrible by any stretch of the imagination, he adds.

“It needs a lot of hard work and communication. One thing that makes us different is the scope we have to be very flexible with our occupiers. We are not institutional in our approach; the fact that this is a long-term hold for us enables us to act a little different in our leasing strategy.”

“For example, we can think about the mixture of occupiers on the estate — is the occupier a good fit and is it a company that is going to grow?” He continues: “In a very loose way, we can in some cases take a kind of incubator approach and say it would be great if these guys were on the square. If they are successful, they will grow themselves and maybe draw other people in.”

For example, a building was renovated for Scoban at an early stage in their evolution, just as they were starting the process to secure its banking licences.

“We could see from the calibre of people involved, and their business strategy, that it made absolute sense that there would be a market for what they do,” Ball recalls. “We could also see why they would want to be in Charlotte Square in a very beautiful building.”

Clearly, taking a flexible view is in some cases driven by market circumstances. “But in our case it’s about our desire to attract the right mix and blend of occupiers,” he maintains.

Of the six former National Trust for Scotland buildings that have been redeveloped, three have been restored to individual townhouses. One has been taken by Cornelian, half of another by

City rents leap as takeup gets back to ten-year levels

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atest indicators for the Edinburgh office property market show many fundamentals are positive when viewed against historic averages, says Angela Lowe, pictured right, Partner at the Edinburgh offices of international real estate advisors Cushman & Wakefield.

Office takeup in Edinburgh is back in line with 10-year levels. According to Cushman & Wakefield’s annual Office Space Across the World report, headline rents in central Edinburgh leaped 7 per cent to £29 per square foot per annum over the past year. This was a higher percentage rise than even the most expensive parts of London, though Edinburgh still offers fantastic value for money when compared with London or even Manchester, Lowe said. Rents at out-of-town sites in West Edinburgh rose 10 per cent.

Demand is up on the same period in 2013. Grade A accounted for 72 per cent of take-up in the city centre, Lowe said. On the supply side, there were three completions in 2013: 26 to 31 Charlotte Square, Atria, and 145 Morrison Street. As demand grows and vacancy rates fall, supply is becoming constrained and incentives to tenants are declining across the size

Organisations want to be close to the universities and their talent range. “There’s only 9 per cent of total stock available just now, a low figure,” Lowe says. An occupier looking for more than 50,000 square feet will find only four new or refurbished buildings to consider.

There are no new developments under construction. “If I were acting for an occupier, I would say the developments most likely to be commenced in the near future include 3-8 St Andrew Square and Quartermile,” Lowe says.

Standard Life Investments and Peveril Securities are developing a mixed used site including offices at the former Scottish Provident building in St Andrew Square in the city centre.

Moorfield Group last September purchased future development sites at Quartermile, a mixed use redevelopment of the 19-acre site of the former Royal Infirmary in the heart of Edinburgh. This underlines the rise of the knowledge economy, not least because of the catalytic effect of world-class research excellence at Edinburgh and Heriot-Watt universities.

Says Lowe: “This has had a huge impact on the types of organisation looking for offices. A lot want to be close to the universities and their talent.

It has caught people’s attention and we will play a longer game for the right occupant Ruffer, and there was serious interest in the rest.

The central three buildings linked together with an atrium behind them offers 30,000 square feet and is a different proposition to the townhouses. “We are seeking an anchor tenant for the square to make it their home,” Ball says. “There is interest in it. It has definitely caught people’s attention and we are prepared to play a longer game for the right occupant for the square.”

Financial and professional services remain the core market for both Charlotte Square and central Edinburgh, says Cushman & Wakefield’s Lowe, while stressing how things are changing.

“The universities are starting to attract private equity firms that want to locate close to them to invest in start-up companies. The universities are absolutely critical to us in selling the city. The growth of Edinburgh’s IT industries has been a factor too.”

Says Ball: “We’re not absolutely prescriptive about tenants. Having a good blend of occupiers is our goal. Dickson Minto (law firm) and BNP Paribas Real Estate are already occupiers within the Collection. So there will always be complementary mixes. Our primary focus remains financial services, but it is by no means a red line.”

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Business Forum

Future needs sound investment JEREMY SUTTON HIBBERT FOR THE TIMES

Our gathering in Edinburgh discussed how best to capitalise on the city’s financial sector to benefit the local and national economies, writes Graham Lironi

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t is the UK’s second most competitive financial centre, a major European centre for asset management and asset servicing and home to the headquarters of the UK Green Investment Bank. In world terms Edinburgh ranks ahead of Dublin, Istanbul, Beijing, Prague, Bahrain, Moscow, Mumbai and Budapest in the Global Financial Centres Index. Its financial services sector is diverse and it has critical mass in banking, life insurance and pensions, asset servicing and investment management, but is the impending independence referendum a threat or an opportunity to this jewel in the crown of Scotland’s economy?

Can more be done by organisations such as City of Edinburgh Council, Scottish Financial Enterprise and Scottish Enterprise to attract financial services companies to Edinburgh?

Nick Ball suggested that there is scope for these organisations to coordinate their approach to determine the best way to collectively market the city while Hamish Baillie proposed that greater cohesion could be achieved if there was a figurehead that people could look to.

“The major financial centres in the world — New York, London, Hong Kong — all have a mayor or equivalent and I’ve always thought that Edinburgh could benefit from that to bring those various bodies together,” he said.

When Alan Aitchison raised the point that he has clients around the country who would rather not come into Edinburgh because of the difficulties of its transport infrastructure, Councillor Frank Ross answered that there has been significant investments in transport infrastructure, highlighting the change to both Waverley and Haymarket stations, the imminent arrival of the trams and recent developments at the airport.

What is the perception of Edinburgh as a city? Do people perceive it as a good place to live and work?

Ball said that it is unquestionably the case that people from outside Edinburgh view it as an attractive city. “It’s the quality of housing, the quality of lifestyle, the quality of schooling that features exceptionally highly on all our indicators when we’re marketing real estate to companies, particularly in the financial services sector,” he said.

David Young noted that his firm has been successful in attracting Londonbased lawyers to live and work in Edinburgh — the attractions being the quality of the lifestyle and, more importantly, the quality of the legal work available.

“That work comes from the quality of the financial services industry to support it in Edinburgh, where there are clients doing exciting work — and that creates a critical mass of activity in Edinburgh,” he said.

In this sophisticated age, coupled with the decline and fall of bankers’ reputations, how can Edinburgh build on its shrewd approach to finance?

Mike Wardlaw suggested that when the public thinks of financial services, the dominant brand is banking, but that the recent banking crisis, despite media reports of bankers’ bonuses, does not necessarily put companies off committing to inward investment in Edinburgh.

Councillor Ross noted that, at the peak of the post-crash era in Edinburgh in 2008, there were 375 organisations within the financial sector in Edinburgh employing just over 36,000 people. In 2013 there were 445 organisations employing over 40,000 people.

“We’ve gone through a crash and we’ve come out the other side 12 per cent higher in terms of employment within the financial sector in Edinburgh and 20 per cent higher in terms of organisations,” he said.

“The perception is that there have been massive job losses in the financial sector in Edinburgh — and that’s not the case.

We’ve seen fantastic growth.”

Back row, left to right: Douglas Barton, Nick White, David Young, Paul Jourdan, Alan Aitchison, Mike Wardlaw Front row, left to right: Andy Neal, Nick Ball, Magnus Linklater, Hamish Baillie, Cllr Frank Ross

Around the table The Business Forum was chaired by Magnus Linklater CBE, columnist for The Times Scotland, who was joined by:

Nick Ball, Corran Properties

Cllr Frank Ross, Edinburgh City Council, Economic Committee

Andy Neal, Essential Edinburgh

Hamish Baillie, Ruffer LLP

Nick White, CuthbertWhite

Paul Jourdan, Amati

Alan Aitchison, Quilter Cheviot

Mike Wardlaw, Towry

Douglas Barton, SG Hambros

David Young, MacLay Murray & Spens

Nick White said that Edinburgh has done an exceptionally good job of feeding off HBOS and RBS, through attracting companies like the Green Investment Bank, Sainsbury’s Bank, Tesco Personal Finance and Virgin Money.

“That’s an extraordinary story at any time — but to do it in the teeth of a recession proves that there are some very good, well qualified individuals who are capable of starting and reinvigorating businesses.”

Paul Jourdan noted that the headquarters of the two major international banks have recently moved out of Edinburgh and suggested that, looking forward, there was a strong gravitational pull of jobs away from Edinburgh.

“That’s why I think there is a strong need for a public figure within the City of Edinburgh Council to be an advocate for its financial services sector,” he said.

“There’s been this subtle shift in the banking sector, which is very important but hasn’t yet had an impact. This is clearly a red flag that everyone should be concerned about.

“The banking shift has already happened and there’s really nothing we can do to reverse it — but Edinburgh is also astonishingly successful in the asset management business and, culturally, its reputation for shrewdness and being detached from the heat of the markets are great selling points.”

What is it that attracts companies to Edinburgh and what can we do better?

Councillor Ross suggested that education is key, pointing to the fact that Edinburgh has 25 per cent of its school age children educated within the private sector, compared to the Scottish average of only 4-5 per cent. There is a student population in Edinburgh of more than 60,000 and around 50 per cent of its workforce is educated to degree standard, the highest percentage in the UK. “A key element to businesses coming here is the quality of the workforce,” he

said. “We’ve got a lot of young, highly educated and highly motivated people coming through our system and that’s very attractive to organisations who want to move here.”

Jourdan said that the number one factor in driving success is critical mass.

“Edinburgh is the number two financial centre in the UK and the number four in Europe and it’s all to do with critical mass,” he said. “That’s why my company is based here — we could only do our job in Edinburgh or London.”

With the ambivalence and lack of clear information on the effects of independence, what strategies are required for Edinburgh to remain a desirable location for financial services? How important an issue is the referendum?

Jourdan said that the referendum is of massive importance and Edinburgh’s astonishing success as a financial centre hangs in the balance because of the uncertainty surrounding financial services regulations.

“Financial services is an intensely difficult industry to regulate, it took five years to negotiate RDR (retail distribution review), so the chances of producing a new regulatory regime that has international respect and in which everyone knows what they’re doing within the space of two years is negligible,” he said.

“So what happens to the financial services industry if we go down the path of independence? What worries me is not what happens up until the vote; it’s what happens in the two years following the vote because I think being a fund manager in Scotland will become extremely difficult.”

Aitchison suggested that a lack of guidance left him unable to advise his clients about the implications of the referendum whilst Ballie said that it was the uncertainty surrounding the referendum rather than the result that causes problems.

Wardlaw said that a ‘yes’ vote would have an enormous impact on everyone’s financial planning and pointed out that uncertainty also creates opportunity.

Douglas Barton’s concern was not the outcome of the referendum but the journey to it, which is causing uncertainty.

“If you are an external investor in the UK and you have the option of investing in a company in Scotland with an unsure future — unsure what the currency is going to be and its regulatory regime — or you can invest in a company down south and not have to worry about all that, surely that could lead to the demise of the industry in Scotland.”

Councillor Ross suggested that the journey to the referendum would be easier if the UK Government would enter into discussions about potential structural changes, which they refuse to do, and pointed out that the White Paper is clear that an independent Scotland would take a pro-business stance.

“Uncertainty is an issue for any business and, after September 18, the next uncertainty becomes potentially a referendum in 2017 which could see the UK leave the European Union,” he said.

“Is there then a risk that London’s financial services sector could migrate to Frankfurt because of the uncertainty surrounding financial services within the UK? I would suggest not.”

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Business Insight An ambitious action plan has been set in motion to deliver a transformed reserve force by 2020, reports Dominic Ryan

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nsuring a flexible, agile defence force for the United Kingdom is at the heart of the consultation document, Future Reserves 2020: Delivering the Nation’s Security Together. An ambitious action plan, it envisages not only a reduction in the number of regular armed forces, down from 102,000 to 82,000 by the year 2018, but increasing the number of reservists from 19,000 to 30,000.

Defence Secretary Philip Hammond believes these changes are vital to safeguard a sustainable and properly funded future for the Army. A total of 33,000 personnel, or 19 per cent of the armed forces, have been earmarked to leave by 2020, where possible through a combination of redundancies, natural wastage and reduced intake. Four waves of redundancies have taken place already and the final one will make redundant up to 1,500 personnel, affecting mostly the Army and a small number of Navy and RAF medical and dental personnel.

So how will this business model — which is essentially, a reduction in full time staff, while at the same time recruiting more reserves — help Britain’s defence in the short and long term? “The Army 2020 structure is not simply about a reduction in size,” says Brigadier Paul Harkness, Commander 51 Scottish Brigade, “it is a complete overhaul of how the Army works to deliver a fully-integrated force, using a better mix of regulars, reserves and contractors to get the maximum Defence effect from the budget.

“The shape of future conflict will be very different from previous operations.

We have previously said that cyber war-

Brig Paul Harkness says the shape of future conflicts will be different fare will play a much larger role in how we conduct operations.”

With this in mind, the increase in reservists will add specialist capability and skills to both strategic and operationally deployed Military Intelligence capabilities. It will also enhance the training support to UK forces.

Brigadier Harkness says: “Many of these skills are not routinely available to their regular counterparts so they will complement the overall intelligence capability. The utility of the reservist has been a critical and valuable element of support to deployed operations since the Gulf War of 1991.

“The Army is going through significant restructuring but there are safeguards in place to ensure frontline operational capability is not affected. We are confident that we have, and will continue to have, the right personnel with the right skill sets to satisfy all strategic defence priorities.”

Reserves powering up for the challenge of change

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he Army 2020 proposition requires an integrated force of 112,000, which sees the reserves being used routinely, rather than in extreme circumstances, for defined tasks and capabilities including providing troops for enduring stabilisation operations and defence engagement overseas.

Becoming a reserve is a major commitment, of course, but it is a move that can offer huge rewards to the individual: a minimum number of training days each year and the possibility of being called up for service means learning invaluable skills that are necessary to the forces but are also attractive to current and future employers.

Right now there are around 750 reservists from across the UK currently deployed, of whom about 550 are in Afghanistan. The remainder are involved in tasks throughout the world, including anti-piracy missions in the Gulf and operations in Cyprus. Key to the ultimate success of attracting another 15,000 will be actively engaging with their current employers — establishing a close dialogue that can benefit the needs of the armed forces and the business itself.

Brigadier Harkness comments: “Integral to this is a shared understanding that, while a reservist’s training, skills and experience will serve them well in their military role, they will also be valuable assets in civilian life and of direct benefit to a reservist’s employer.”

Reservists bring some extremely valuable skills that don’t naturally reside in the regular military. These may be engineering or academic expertise, so one of the aims of the recruitment drive is to tap into that broader base of experience that resides in the civilian workplace.

Conversely, the training undertaken by

reservists enables them to develop skills and abilities that can benefit not just the armed forces but also the workplace back home. Education and training is also possible, meanwhile, with a range of fully recognised apprenticeships for reservists.

The student support policy aims to help a reservist study at the same time.

And, while the prospect of someone leaving for an extended period can be challenging to employers, there are measures such as financial incentives to SMEs of £500 a month which can help.

There is much to offer both those who wish to join and their current and future employers. But can the required number of reservists be recruited in the timescale envisaged?

Brigadier Harkness says: “We are confident the plans we have in place to increase the number of Reservists in the UK Armed Forces are robust and viable. They have been very carefully developed over a period of time, in consultation with a wide range of stakeholders, and have been scrutinised closely for their cost effectiveness.

“We have previously acknowledged that 2013 was a difficult year for recruitment, but with a new recruitment campaign for 2014, we are confident we will see recruitment numbers rising.

“We pride ourselves on recruiting individuals who demonstrate talent and promise, and then provide them with all the training and development opportunities they need. The Army remains on target to achieve the manning figures set out by 2018.”

The Future Reserves programme is a key part of the work being done to transform defence. To this end, the MoD is changing the way in which it trains, equips and uses reserve forces to ensure they complement regular capabilities

Lance Cpl Hannah Knox has gained self confidence

within an integrated whole force.

“To bring us better into line with our closest allies, who make much more use of reserve forces, we are investing £1.8bn in more modern equipment, increased training and incentives as we build a fully integrated Army with regulars and reserves training and operating alongside each other,” says Brigadier Harkness.

Hannah Knox, a 26-year-old physiotherapist, has been a reservist with 71 Engineer Regiment for six years and joined while she was studying at university. “I went along to the centre in Paisley after seeing an advert in a newspaper,” said Hannah when asked what prompted her to become a reserve.

Like many reserves, Hannah was looking for something different to her day job as well as something challenging. She continued: “I certainly found it.

Being a reserve has taken me to the London Olympics, where I was involved in security and a few years ago I took part in a training exercise in South Dakota with the US National Guard.”

Hannah admits that she spends a lot of time being a reserve but she is quick to point out that that’s her choice. “They are very flexible.” she says and qualifies by saying that during her first year she had to put her studies first and her CO was supportive of this choice.

“Apart from being great fun and physically challenging, being a reserve has allowed me to do things that most people will never do. It’s also given me self confidence which has definitely helped me in my job.” finished Hannah.

For more information about the exciting full-time and part-time job opportunities with the Army, visit www.army.mod. uk/jobs, search ‘Army Jobs’ or call 0845 600 8080

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The new reserves

A need to raise eyes to bold new horizons Those deployed to augment the Royal Navy in times of conflict will be part of a leaner, more flexible force, writes Alexander McDiarmid

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ometimes you just have to weigh anchor and go. No matter how much you appreciate your day job, the urge for new excitement can just kick in — along with the travel agent’s reckoning. But there is another way to experience action, adventure and travel, without paying; indeed, while being paid.

As you would expect, the Royal Navy Reserves don’t beat about the bush when setting out their attractions to people on the look-out for something different.

Would-be part-time reservists can expect flexible commitment, travel opportunities, operational service, new friendships, an annual tax-free bounty up to £1,674, and Royal Navy pay rates (pro rata, of course).

As one uniformed reservist says on the relevant website: “Skiing, kayaking, sailing exercises … whatever you can think of, the Navy does it. And the training is first-class.”

Entry-level training is a ten-week course based in HMS Raleigh — stretched across a year — in which trainees are placed in classes of about 30 to develop the Royal Navy’s core values of commitment, courage, discipline, respect, integrity and loyalty.

Basic seamanship and safety-at-sea awareness go alongside self-discipline, teamwork and overcoming problems.

They learn to handle a SA80 assault rifle and other military skills. They also get a taste of how to operate as a team tackling floods and fires at sea, and must pass a first-aid course and fitness tests.

Fitness is crucial and the progressive regime will test individuals’ ability to climb high ropes and complete assault and obstacle courses. But training is as practical and active as possible, using simulators and a decommissioned warship to give a real taste of the environments in which they will work and fight.

What does the Navy get in return?

Time, of course: a total commitment of 24 days a year made up of weekends, drill evenings and longer training packages — as well as a whole variety of talents.

But essentially another step towards the meeting of its targets under the Future

Reserves (FR20) plan conceived in 2010 for the needs of a different posture come 2020.

To be precise, whereas the Navy had 35,500 regulars and 2,630 reservists in 2010, a decade after that it expects to have 30,000 regulars and 3,100 reservists.

That’s a net increase of more than 2,000 part-timers to compensate for the loss of over 5,000 regulars; but the idea is that both camps will be much more closely trained, coordinated and operated. In other words, a leaner, more flexible and better-equipped fighting force when needed.

Fighting can still be expected then?

“A reservist should expect to experience a period of mobilisation no more than one year in five,” says Commander Roger Curtis, commanding officer of HMS Dalriada, a reservist himself, though with a background as a navigating officer in the regular Royal Navy. “They will be deployed to augment the Royal Navy in times of tension, humanitarian crisis or conflict, and obviously anyone coming aboard has to be comfortable with that.”

HMS Dalriada is one of two centres in Scotland currently equipped to take in and train such recruits — the other is HMS Scotia in Rosyth, Fife; and new sub units are set for development in Dundee and Aberdeen. Together the main units account for almost 200 heads, and there is an aspiration to at least double that figure; while the whole-UK total of naval reservists currently stands at 2,300.

“We are very keen to reach our target numbers,” says Commander Curtis, whose

Commander Roger Curtis, left, says there is a need for divers in the naval reserves

Edinburgh-based day job is as a building surveyor with Historic Scotland. “We need all kinds of people with the potential to learn new skills, but equally some types in particular for their existing skills.”

For instance? “Divers! We need divers, and they needn’t be professionals, though that would be nice. Recreational divers with a PADI civilian qualification would be fine. And merchant navy officers, they are very welcome. Not to mention medical people. We have an excellent relationship with the NHS, so we

Case study: Adventure on ice Six weeks in the South Atlantic and Antarctica is not everyone’s idea of a relaxing holiday but for Naval Reservist Stephen Allan, main picture, just returned from that, it was “fabulous fun, a great experience”.

Temporarily away from his wife, two teenage daughters and day job as a contract manager with Renfrewshire Council he flew to the

Falklands to join the patrol vessel HMS Protector as a leading seaman.

Would he thrive on board even with 27 years as a Reservist under his belt?

While the survey ship and its crew updated charts and monitored tidal movements, he did all manner of tasks on board and joined crew members camping on ice “for

several nights here and there”. Was it cold? “Definitely; but I was warmly accepted on board as just part of the family.”

So how did it affect his day job?

“The council is very accommodating in granting annual and special leave,” he says, “but I am expected to crack on and catch up when I get back.”

look forward to recruiting more doctors, nurses and other staff for logistics and practical roles.” They are also keen on the “seamless” transfer of regulars into reservist roles.

Excellent relationships with employers are vital, of course, if key workers are to be absent even for short periods. “The idea of incentive packages is currently being worked on, but some bosses can see the advantages immediately, with training and development benefiting all three parties.”

Regular staff officer Lt William Inglis, concurs: “I genuinely believe that increasing the Reserve Armed Forces is a major bonus to community and business life … in that we are sharing some of their training burden; so generally, we’re helping each other to develop our people.”

Both he and his senior colleague see the monetary rewards for the recruits as an important element in attracting them.

While Lt Inglis explains that the rates rise from £36 per day for a junior recruit through £110 per day for a lieutenant to £220 for a captain, Commander Curtis says: “I do find that is quite an incentive to most applicants. It doesn’t take much imagination to see how attractive the extra money would be to, say, students, with away-from-home accommodation, meals and leisure to pay for.”

But apart from the extra income, what would he see as the main attractions of becoming a Naval Reservist? “Learning new skills. Travel. Joining a naval community. The challenges of doing something completely different. And of course, the chance to serve your country.”

For more details, see www.royalnavy.mod. uk/careers/role-finder/naval-reserves

the times | Thursday March 27 2014

13

Business Insight

The standards are soaring

The RAF Reserves in Edinburgh undergo specialised training that focuses on the skills needed to support the regulars on operations.

Rick Wilson signs up to discover more

H

e is not quite as airborne as you would expect a squadron leader to be, but Jerry Riley is a high ranking person in more ways than one: he runs the interests of 603 (City of Edinburgh) Squadron of the Royal Auxiliary Air Force from a fourth-floor eyrie atop a magnificent Victorian building in the capital’s Learmonth Terrace; and, if the eagle’s nest picture is not graphic enough, his elevated office could also seem like an airstrip control tower.

In fact, he and his charges — about 100 at any one time — have their boots very much on the ground. They are largely made up of what he calls “air-minded infantry — or the RAF Regiment’s soldiers, if you like” — though the squadron’s recruitment focus has been, since last year, on “force protection”; in effect, the further development of a reserve RAF Police unit embedded within the service.

The imposing building, currently under exterior refurbishment, houses one of four units in Scotland actively attracting reservists at this vital juncture in Britain’s defence restructuring, the other three having different themes: Glasgow hosting a wider range of roles related to operational flight; Leuchars focusing on medical skills, and Lossiemouth geared to the continued signing-up of RAF Regiment personnel.

Dotted throughout the stunningly opulent wood-carved interior of 603’s handsome home is evidence not just of the squadron’s current role — training

desks, screens and rows of trainees’ chairs — but also reminders of its remarkable history: a famous officer’s uniform here, an old propellor there, and dozens of nostalgic photos celebrating the legendary status of the squadron, which was always a part-time auxiliary unit from its inauguration in 1925.

Its Second World War performance still stirs pride in local hearts and minds.

With the Luftwaffe’s main operations being targeted on the Royal Navy fleet in Scapa Flow, the squadron was operational with Spitfires in time to intercept the first air raid on the UK, shooting a Junkers Ju88 bomber down into the Firth of Forth, so claiming the first RAF “kill” of the war.

The squadron continued its success after moving temporarily to RAF Hornchurch in Essex for the last months of the Battle of Britain. By shooting down the greatest number of enemy planes, it earned the title of “the greatest squadron of them all” by the station’s commander, Group Captain “Boy” Bouchier, and more than justified its good Doric motto ‘Gin Ye Daur’ (If You Dare).

Crucial to this was its extraordinary esprit de corps built up from its birth among “weekend flyers from the city desks of Edinburgh and the fields of the Lothians” — sons of wealthy society who could afford flying lessons to indulge their love of the then-new craze of aviation.

To illustrate the point, a smiling Sqn Ldr Riley finds an old book listing their jobs — solicitor, surgeons, sheep farmer, bank agent — but sombrely notes their fate. “As many as one-third of these young men were dead by 1942,” says the former regular who has been “a rare RAF

animal now for three years — being in full-time reserve service”.

While his group of today’s part-time reserve service fulfils a changed groundbased role as part of the Future Reserves 2020 programme, which aims to reduce regulars by over 5,000 while adding almost 500 reserves, recruits don’t need much reminding of the squadron’s heroic past. Indeed, that reputation must be an added attraction for each would-be reservist pulled in by the current advertising campaign that includes unmissable back-of-the-bus posters offering the excitement of extra skills and adventure in contrast to the day-job routine. Without actually giving up the day job.

For them, the squadron’s specialised training consists of a 12-month “battlefield policeman” course, focused on developing the skills — including weapon handling — needed to support the regular RAF on operations. Although most serving RAF Police Reservists have previous civilian or military police experience, this is not a prerequisite and required qualities or skills are not much beyond that expected of Police anywhere.

“Subject to security vetting, anyone aged from 18 to 50 can join if they pass the fitness and assessment tests. Let’s face it, for this kind of work you’ve got to be physically pretty robust, and also mentally: there are basic, simple tests, too, of their mental, linguistic and mathematical abilities. So they either pass or they don’t.”

If the recruits can offer such physical and mental strengths — and of course their time at the rate of up to eight weekends a year — what do they get in return?

Sqn Leader Riley offers a precise list of plus-points: “Financial rewards, new skills — such as first-aiding — transferable to civilian life; more self-confidence; improved communication skills; the kind of satisfaction you get from camps and adventure training; and of course the honour of seriously serving your country.”

He points out that RAF Police duties are diverse, ranging from protective

RAF Police are focused on providing people who will go to protect Air Force bases wherever required

Sqn Leader Jerry Riley highlights initiative

policing — safeguarding personnel and equipment from enemy, criminal and terrorist threats — to policing supply routes, conducting searches, and supporting non-combatant evacuation from trouble spots. However employed, RAF Police need to be ready to react to a wide range of incidents professionally and effectively, and use their own initiative to resolve potentially stressful situations.

Is the squadron’s work ever in the context of flying these days? “RAF Police also have a role in air transport security duties, searching passengers and cargo, guarding aircraft and their payloads, and assessing the security of airfields. But we don’t recruit flyers. We are now wholly focused on providing people who will go and protect, defend and secure RAF bases wherever that’s required.”

Afghanistan? “Yes, 603 squadron currently has ten people there, with six preparing to go right now. Such a deployment is for six months and, when you count in the special training time needed, the mobilisationand therefore absence from the day job will be a year.

And we expect to make such mobilisation demands roughly every five years.”

He doesn’t deny that can be a lot to ask of the individual’s other employer. “We are fortunate not to have encountered much resistance there, as we have some self-employed people and one unemployed. But where such an allowance is not built in to a company’s policy, where a smaller business might be worried by, for instance, an employee’s required twoweek camp absence, we do understand that and try to be sympathetic.”

The fact is that, in the end, these individuals — 10 per cent of whom are women these days — are putting their lives at risk especially when expected to go “outside the wire” in to the heat of a combat zone. So it can’t be seen, as it once was, as just an adventurous weekend hobby. “Oh no,” says the squadron leader. “It’s a job.”

For more details, see www.raf.mod.uk/rafreserves

Thursday March 27 2014 | the times

14

Business Insight

The new reserves

Surviving on the white stuff Joining the Royal Marines Reserves in the Arctic helps their employers better understand the objectives, writes Rick Wilson

I

t’s cold, risky, muscle-stretching and unforgiving in many ways, but 68 Royal Marine reservists — 18 of them Scots — are confronting the challenges of training on Norway’s snowy mountains with characterforming enthusiasm. Not only that: the employers of several of them have come along for (part of) the ride. It’s a bold strategy being pursued by Royal Marines Reserve Scotland, the framework unit that organises not just invitations to reservists from elsewhere in the UK but also to the employers — letting them see for themselves what their people are getting up to on such exercises.

Such involvement — organised under the aegis of SaBRE, the employers’ support organisation — can reinforce service chiefs’ relations with companies that might otherwise feel the sacrifice in giving up resources to the country’s defence as demand for Marine reservists is stepped up to compensate for reduced regular numbers come 2020.

Being swept into a foreign field on a snowmobile can present a whole new perspective to bosses feeling that extra pressure. So it’s a big adventure for them too, with opportunities for real participation, such as military-skiing sessions, while spending two nights in barracks and one under canvas in Arctic conditions.

“We are immensely grateful to helpful

employers, and such trips are designed for them to get a better understanding of what we do with reservists in training,” says Lt Col Richard Parvin, Commanding Officer of the Royal Marines Reserves in Scotland.

“They go into the field, meet their own people in action and often get a whole new perception of them. But they no doubt go home, too, with inspiring tales of their own derring-do.”

Not that the employers — in this case eight of them, including senior representatives of the police, the NHS, an outdoor clothing company and a high school — are expected to take part in the kind of super-tough training given to the enlisted commandos. For those wearers of the legendary green beret, the annual Exercise Hairspring involves one week of mobility (mainly skiing) and learning self-administration (cooking, etc), while a second week is about survival – seeing how to “dispatch” a reindeer for food, for instance, and how to dig snow holes and shelters.

Such time away from the day job does, then, depend on understanding employers. So precisely how much employees’ time has to be borrowed? “The minimum requirement is for two weeks a year continuous training and then about one weekend a month once you’ve completed your training. It can be a bit more intense before that; but we’re eminently flexible and have opportunities for people to train overseas or in the UK for as much of the year as they can give up. Some who are students or self-employed or between contracts can give us quite a lot of their time and we’re then able to train them in specialist areas such as, say, becoming instructors.”

The recruited reservists have already been well tested to reach this stage, after completing one of the world’s toughest military training courses. So what are the special qualities needed to qualify for that beret?

Lt Col Richard Parvin stresses determination

“It’s really about determination,” says Lt Col Parvin, a regular himself who presides over RMR activities in Aberdeen, Dundee, Edinburgh, Rosyth, Glasgow, Belfast and Newcastle and is currently occupied with intensified recruitment.

“We need people who like to be challenged, who get a thrill from achieving difficult goals. Therefore the people we recruit are rather fewer than you might expect. So we have to push quite hard to get the numbers to choose from and we generally end up with about 40 to 50 per cent success rate from those who start training.”

What is different about wearing the green beret? “The beret is different, the training is different, and we feel that the rewards of belonging to this very special organisation are very different.”

By rewards, he does not necessarily mean pay rates, which generally align with those applied to the navy reserves, although there may be marginal differences to do with special skills and qualifications on offer.

Reserve recruits become part of a

Graduates make the grade “Elite” is a word often used in reference to Royal Marine Commandos; and while being adventurous, tough and wellcoordinated are great qualifying qualities, it also helps to be well-educated, if only to keep up with your colleagues.

Two examples encountered on that training exercise in Norway are Marine Dave Philipson of Glasgow and Lance Corporal Gareth Wilkinson of Aberdeen.

Both are certainly fit and motivated enough, always relishing sporting activities and the physical and (sometimes Arctic) weather challenges set to test

them. But neither are they fazed by any attendant intellectual tests.

Dave, a 30-year-old running enthusiast with a day job in an outdoor shop in Partick, has a master’s degree in forensic science and analytical chemistry.

Gareth, 34, a day-job policeman from Aberdeen and reservist for seven years, has a degree in politics and international relations. “It’s not uncommon to find graduates in the Marines Reserve Service,” he says. “The level of graduates within our Aberdeen detachment is around 70 per cent.”

600-strong UK-wide force, 150 of whom are Scots, while up to 88 are in training at any one time.

In relative population terms, that is quite a high proportion coming from north of the Border, and Parvin feels this is attributable to environment. “The Scots’ background certainly gives us an advantage when we come to Norway,” he says, “because they will have been training on the rugged terrain and around their country before they arrive. So being used to the cold, wet and snowy hills gives us a definite edge.”

But why Norway? “We first started training here in 1970 as part of NATO defences against the Soviet Union — when there was a fear that the Soviets might invade Europe through northern Norway, or the ‘northern flank’ as it was known.

“We soon realised that this was an environment so challenging and demanding that by training people here you could bring out some really special qualities; and if you can train and fight and survive in such an environment, you can train and fight and survive in any environment in the world. So it’s a great training area, an excellent springboard.

“But also, there is renewed interest in what is now termed the High North.

Something like 30 per cent of the world’s gas reserves are contained within the Arctic and a huge percentage of the UK’s energy comes from Norway; so having a good relationship with that country is extremely important.”

In that exercise, there could not be a better physical link than his highly trained winter warriors. “We are the only troops within the UK who are trained to fight in the Arctic, and therefore it’s Britain’s safety line as it were, giving us an ability to operate in those environments that no one else in the army or any other part of the services can do on a routine basis.”

Interested? Visit: www.royalnavy.mod.uk/ Careers/Role-finder/Naval-Reserves

the times | Thursday March 27 2014

15

Business Insight COMMERCIAL REPORT: SCOTTISH DEVELOPMENT INTERNATIONAL

How Dubai means business for Scotland

O

utward-looking Scots enterprises have double the motivation these days for doing business in Dubai – considering first the dynamic nature of its development in recent times and, secondly, the immediate attraction of its forthcoming Big Business event.

That’s the staging up of the international trade exhibition Expo 2020, in which companies and industries showcase and demonstrate their latest products.

Lord Livingston, Minister of State for Trade and Development, recently pinpointed great opportunities in the setting of the expo. That view is shared by Fayha Sultan, marketing manager (commerce) with Dubai’s Department of Tourism and Commerce, who says: “This offers outstanding opportunities for UK firms.

Government and private sector spending will be huge and HSBC reckons this could reach £11.4 billion, while Deutsche Bank estimates go as high as £27 billion.

“This will create 277,000 jobs and in view of this expansion, we see a prosperous future for Dubai and its partners. Even before Expo was won Dubai was a fastdeveloping market, ranked the third most dynamic city in the world to conduct business, according to the Jones Lang LaSalle’s 2014 City Momentum Index,” stated Colin Crabbe, international senior manager (Middle East) at Scottish Development International (SDI), the business-

stimulating joint venture between the Scottish government, Scottish Enterprise and Highlands and Islands Enterprise.

“As Dubai and the wider Middle East region looks beyond oil, there are lots of new industries opening up and with that comes problems that need to be solved,” he says. “If you have a product or service that addresses a problem in the UK then invariably that problem will exist in the Middle East, creating a demand for your product.”

Many of the Dubai government’s industry priorities tie in with Scotland’s strengths – from healthcare and education to renewables and hi-tech products.

“As a company considering entering the market, I would look at the government’s industry priorities. If they tie in with what you offer there should be strong demand for your product.”

So how to approach the market?

SDI offers all kinds of “good on-theground support”, not least the backing of GlobalScots, an affiliated network of Scottish foreign-based advisers with refined knowledge of their particular area.

One such GlobalScot is Alex Watson, of Corporate Services at Davidson & Co, who has been in Dubai for 14 years.

He says. “While there are methods and processes to go through to get to market, the key message is that Dubai is very much open and ready for business.

There is a massive call to quality at the moment, where various skills and market sectors are being targeted: in particular,

According to one ranking, Dubai is the third most dynamic city in the world in which to do business

aerospace, trains, oil and gas, education, technology, professional services – all of which are required to help move Dubai and the UAE forward with their goals focused on Expo 2020.

He points out that GlobalScots like himself can help Scottish companies access the area – “providing free-ofcharge, advice, counselling and general information using our own experience of the markets” – and he adds: “I know all the legalities, all the routes and pitfalls, so I offer access to my knowledge to any Scots business people planning to make their way into this market.”

Win a business trip to Dubai With a few days left to enter, here’s your chance to win a business trip – worth £2000 – to Dubai. The competition is run by the Government of Dubai, Department of Tourism and Commerce Marketing (DTCM) in partnership with Scottish Development International, JW Marriott Marquis Dubai Hotel and Trans Arabian Travel Management.

The prize is a fact-finding trip for one person from each of three winning companies to explore business opportunities and set up a Dubai presence. Applications close March 31; judging is in the first week of April; the trip is June 7-12. To enter and for further information, visit: www.scottish-enterprise.com/dubaicomp2014

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Tuesday March 25 2014 | the times

16

Business Insight COMMERCIAL REPORT: IOD SCOTLAND

Who will be Scotland’s Director of the Year?

I

t’s one of Scotland’s leading business awards and tonight someone will join household names like Robert Wiseman, Jim McColl and Sir Bill Gammell on being named Director of the Year by the Institute of Directors (IoD) Scotland.

Now in its tenth year, the award – which is open to all Scottish directors whether they are institute members or not – was the brainchild of IoD Scotland’s executive director, David Watt, who has plenty of experience of running things himself, notably two and a half years leading Scotland’s Millennium activities.

His idea was to recognise Scottish directorial excellence in the private, public and third sector organisations, and it now covers a range of types.

As well as the Director of the Year award, which has been split into two categories – one for businesses up to £35 million turnover and one for businesses turning over more than £35 million – there are also six regional Director of the Year titles being awarded in Glasgow’s Crown Plaza tonight, along with another nine “best director” categories in different fields: non-executive, female, public

sector, third sector, emerging, sustainability leadership, flexible working policies, workplace health, safety and wellbeing; as well as the Prince’s Trust Youth Business Scotland Director.

David Watt, who is a GlobalScot and serves on several boards and bodies including the Scottish government’s small business advisory group, declares himself especially delighted with the calibre of the 100-plus applications, the highest in the award’s history.

“Once again we have had an outstanding number of quality entrants in every category and it’s particularly pleasing to see more female nominations, along with quality applications from emerging directors,” he says.

“These are all potential leaders of tomorrow in terms of gender balance, age and diversity. The calibre of the people short-listed has made this a hard-fought race and extremely difficult for the judges.”

The judging process, undertaken by a team that included business people, academics and Scottish government representatives, was “rigorous” with extra-dimensional factors – such as the

David Watt, executive director, IoD Scotland

“

The calibre of the people short-listed has made this a hard fought race

director’s role in the community – being considered along with his or her personal achievements and commitment to making their business successful.

David Watt is enthusiastic about the role IoD Scotland can play in developing and providing benefits not just for its members but for their organisations which contribute to a growing Scottish economy. He believes “excellent corporate leadership is vital for Scotland going forward and the IoD has a key role to play in delivering this through supporting and developing directors”.

The institute, which has 35,000 members UK-wide, was founded in 1903 and obtained a Royal Charter in 1906.

Membership includes directors from

across the business spectrum from CEOs of large corporations to directors of small start-up companies. The IoD in Scotland has 1,700 members with branches in Glasgow, Edinburgh, Tayside, Fife, Aberdeen and Highlands & Islands, and it is currently witnessing a healthy growth in its membership. There are several reasons for this, says Katherine McCudden, its head of membership support and event partnerships.

She says: “Members in Scotland can hone and learn additional skills through our director development programme, and they also have the opportunity to participate in high-level networking.”

Other advantages? “There’s a full calendar of events, and members travelling with ScotRail can get a free upgrade to first-class. There are also discounts on hotels and meeting rooms throughout the country, as well as discounted car hire, purchasing affinity deals and market research on a comprehensive range of business matters.”

She reminds interested parties of some of last year’s highlights enjoyed by members, which included leadership lectures from permanent secretary Sir Peter Housden, and Commonwealth Games communications chief Gordon Arthur.

There were also “Influencers” dinners with Rupert Soames, formerly of Aggreko, Donna Malone of Howden Group, Colin Robertson of Alexander Dennis, and master classes with Bob Keiller, CEO of Wood Group; not to mention the annual conference held at Gleneagles with keynote speaker Jayne Anne Gadhia of Virgin Money.

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