 Good morning, and welcome to the 15th meeting of 2021 of the Economy and Fair Work Committee. Following advice that was issued by Parliament last week, this committee will be held in virtual. The first item of business is a decision to take items C and 4 in private. Are the committee members agreed? Thank you. We will now move on to the substantive part of the meeting this morning, which is our evidence-taking session into Scotland's supply chain. We are looking at the short and medium-term challenges that are facing Scotland supply chain and how the challenges and shifts in supply chain and impact them on Scotland's economy. We are also looking at some long-term solutions as well. We want to consider how to build future resilience and whether there are opportunities to develop domestic supply chains in Scotland. I am very pleased to welcome this morning's panel and the witnesses. Professor Ian Bonfrey, who is director of Lightweight Manufacturing Centre, Professor Keith Ridgway, executive chair of the National Manufacturing Institute Scotland, and Nick Shields, who is head of business support services at Scottish Enterprise. As always, I will ask members and witnesses to keep the questions and answers as concise as possible. It is helpful once you ask a question if you could indicate to our finalists that you would like to respond and that will make it easier for broadcasting to keep us on track for the meeting. I would like to start the questions. First, I can start with Professor Bonfrey. As I said, the committee is looking at some of the solutions to the supply chain challenges that we are facing. The issues that we have identified over the course of the inquiry, because we are now in the large stages of the inquiry, has been pressures around Covid, around the different trade arrangements through Brexit, around labour supply and skills markets, and those are the kind of pressure points that we have identified. I am interested in, as an organisation, looking through the papers. You are an organisation who are looking to respond to some of those challenges but have been in place for a few years. Over the landscape for supply chains has changed dramatically since Covid started. Have you changed as an organisation? How are you responding? Do you agree with the pressures that we have identified? What can it impact? Has that made for what you are trying to achieve? Has it made it more challenging? Of course. Good morning, everyone. Thanks for having me today. I think that the organisation that I run has definitely changed without question. We have had to reassess where we can have impact in the supply chain. It is particularly important for us because the types of organisations that we are looking to attract do not really exist within the Scottish ecosystem in the same way that they do down on the south coast. I have spent 30 years working in England and in France. The supply chains are much more readily developed for my particular industry. That is about composite materials and manufacturing with lightweight structures. The skills that you need to engineer and design with them do not exist in any great depth in Scotland. My challenge has been to try and understand how we can seat new companies locally and how we can encourage companies to come to Scotland. Can we provide the skills and the particular unique selling points that would attract them away from the traditional more established supply chain that is based down in England? We have had to look at the environment, adjacent areas such as textiles in the chemical industry. There are 525 textile companies in Scotland. Textiles are at the heart of composite materials because they are layered materials that we have built up fabrics. That is an area whereby we could encourage textile companies to move into the more structural materials business and help them along that way. That is one example of how we have adapted to understand the environment that we are in and how best to have some impact on that. The last thing that I would say is that we have come up with a concept to try to take some of the capital cost away from people who want to move into composite materials. We have a concept for a reconfigurable pilot line, which is a cell-based system that we would look to instead of companies coming to us, we would look to take that technology to them to establish it in their organisation and help them along that journey. I hope that we can take some of the capital cost away from buying plans and buying equipment to have an impact. Thank you very much. If I could move to Professor Keith Ridgway, I would like to put a similar question to you. As an organisation, you have been established to address issues with Scotland's supply chain, but the current circumstances that we are living through has changed dramatically due to the invite and some of the Brexit issues and trading issues. Inflation, which we have heard again this morning, has put in pressure on lots of different sectors. How has an organisation changed what your aims were? Have you had to know that it is about trying to grow domestic supply chains? Is this situation making that easier or more difficult? It is more difficult and very much more difficult. If you look at where national manufacturing industry Scotland started from and where it developed from, it was advanced forming a search centre with very much in the aerospace industry. As an industry has been informed, it is for Scotland, not just for the central belt and not just for the aerospace industry, so we are finding ourselves now involved in a much wider range of industries, chemical processing and food and drink. In those areas, we have seen massive problems. Food and drink resilience in the supply chain is absolutely huge and labour problems. It can only be addressed by automation. That is the thing that we have got to do. Now we are starting to put a bigger push towards automation, those industries, what we might call or consider lower-skilled industries. From a point of view of where we are at the moment, we have the Manufacturing Skills Academy, which is brought about as part of the national manufacturing institute. We are trying to work with them and are working with the FE sector, which has probably been under inverted for many years and has been a relative of the education sector. To add on the digital skills, the digital skills are becoming an increasing problem. We cannot hold staff in Enmys and companies cannot hold staff. We are losing people for double salaries and companies are waking up to digital skills. For a while, companies and pre-Covid people thought that the big companies pushing digital, the Siemens Industry 4, were very expensive. Now they found that it is not that expensive, so there is a big push in pulling digital skills in it. Last week, we were down with a forum in the north of England. It is not a Scottish problem, but it is a UK problem. People said that the issues were productivity and getting to think that there is zero energy cost, but the main problem was skills, skills, skills and more skills. We have to respond to that. The national transition training fund that we are operating with has been a big help. I think that we need to carry on doing more of that work and giving people a digital addition. Nick Shields, would you like to give an opportunity to set out how Scottish Enterprise is responding to the additional pressures that we have seen in the supply chain during the recent 18 months? Sure. Thank you, convener. Thank you for the opportunity to talk. Part of my responsibility is that I look after the manufacturing advisory service in Scotland. We have engaged with supply chains and manufacturing companies for many years. I guess that the huge game changer was the event of the pandemic. We have seen both from the well-known PPE issues that we experienced and having to completely realign supply chains along those lines to meet the essential needs for our healthcare providers. A huge amount of our resource in the short term was realigned to that along with our colleagues in the Scottish Government. I am sure that you are well aware of the great work that was undertaken there in terms of rediscovering and manufacturing capability in Scotland so that we can deliver our own PPE. I guess that added to that. Over the past few years, we had been engaging on supply chains in advance of the pandemic and Brexit, and companies that have well established an existing global interconnected supply chains need a real compelling change to do something different and make those changes. I certainly see that the PPE and the pandemic have brought about that discordant event that gives people a chance to look at things. We know from the conversations that we are having now with enterprises that the challenges that they are having with supply chain disruption have forced them to re-look at their extended supply chains and consider resilience. We are very active in engaging across. We probably deal with around 1,200 manufacturing businesses at any one time across relationships, including Highlands and Islands. That is part of the proactive conversation that we will have with those businesses in asking them what their resilience challenges are and how they can help to resolve them with the proposition of a Scottish supply chain solution. How can we work with you to help to facilitate that? Evidence that we heard last week was from construction and house building. The supply chain pressures were causing a degree of sluggedness in the sector because they could not get jobs completed or get jobs started. Is that something that you are seeing among the businesses that you are dealing with that is creating those kind of downward pressures on their ability to grow? We are in an unusual situation where a quote that I had yesterday from a business colleague was, I cannot enjoy how busy we are. The business activity has gone up and orders are much higher. You can see that from the PMI index, the purchasing management index, everything is almost on all time high. We have supply chain shortages and disruptions. There are compounding factors there. Again, from other businesses, I talked to whether their suppliers can get the labour to supply them with the components. The skills issue that Professor Ridgeway talked about is playing out. I cannot think of any manufacturing businesses across Scotland that are not suffering from this at the moment. Our economic trends survey that we are having on-going running would show that 48 per cent of businesses say that labour shortages are their main challenge and 30 per cent of businesses are their second main challenge of supply chain disruption. Those factors are all compounding to give businesses those issues. They are busy, but it is a challenge for them to fill out their orders at the moment. We have heard a lot about the generalities of the problems of the supply chain and solutions over the past few sessions that the committee has held. I would like to get into detail in a particular sector, namely agriculture, that has been released this week and last around the problems of the supply chain and the knock-on effects of food prices and inflation. Professor Ridgeway introduced automation in agriculture. Can you expand a little on what exactly the work that you are doing there and what the support is needed and when you see some of those things coming to fruition to have an impact on some of those problems that are addressed in the supply chain? My second question is for Nick. Again, on agriculture and material inputs, fertiliser is a key input for experiencing issues. Can you give me some input into what you are doing and what Scottish Enterprise is doing specifically to address that? I note my register of interests regarding agriculture. Thank you very much for those questions. We have just really been awakened to the problems in the food and drink industry, particularly in the knock-on agriculture industry. We have done some work on automation in the whisky industry, which is obviously big. Now we are getting more involved in the seafood industry, which appears to have massive labour problems. We are getting the companies together to try and find common issues and where we can get people to supply into that industry and help to develop the equipment, but, to be absolutely honest, they are very difficult problems. If you just take fish on the North Sea, we have people in Norway and Iceland who have more automated systems, but, as I understand it, they have a more standard fish size, but the North Sea gives you different sizes. It is a difficult thing to handle. The scale that goes into it, we may not consider it a high level of scale, but there is a lot of task acknowledging in the seafood industry. I do not think that we can underestimate the level of the problem of automation in agriculture and the seafood industry, but the only way that we can address it is to get the companies together and find common problems. If you look at robotics, it does not work fast enough. We found before in the food industry that robotics is fine for making place in new things, but we have to be fixed to automation and going at very high speed in agriculture and food industries. We are working on it, but we are looking to find solutions. We are trying to find the companies that can help us to supply into that industry, which, again, is quite difficult. We have a lack of automation expertise across the UK. The only way that is along the term is to develop the skills and companies to tackle automation and bring in the expertise to grow it. Thank you very much. Nick Shields, on the other issue of material inputs, particularly fertilizer, so you are muted. I will be honest. My knowledge of the fertilizer supply change is pretty limited. I really am much on that. Most of our work with agriculture tends to be on those that are involved with a bit of primary production but then do some value-add work. As Keith said, it is very much focused on automation. My experience of dealing with the agriculture sector is that there is amazing new technology and the technology that is used on the field in terms of satellite technology and the equipment that they use is highly automated. However, our activity probably pushes up towards more on the good production side. I see fantastic examples of automation, and new technology has been adopted, but we also see businesses that could really do with adopting new technology. That sector is particularly hit with the labour shortage issue at the moment. I would have to come back to you on the fertilizer supply chain activity. To be clear, does the Scottish Enterprise cover the agricultural sector, or does it fall within the remit? Its agriculture would not be within our remit. We are normally on a business and enterprise level, so that is really a Scottish Government activity from my experience. I invite Maggie Chapman to ask some questions. Thank you very much. Good morning to the panel. Thank you very much for being with us this morning. A couple of questions. Nick, you were just talking about innovation and the need to change our technologies and that kind of thing. You have all touched on issues of resilience around diversification, adaptation, being adaptable and flexible, and the issues of skills. Could you say a little bit more about the level of innovation activities across your areas, perhaps particularly around developing processes and technologies that will help us to address the supply chain issues? What is there at the moment? What do you think we need and how do we incentivise some of those innovations? I am particularly interested in the innovations that lead directly to supply chain resilience and supporting the industries that we know that we can sustain through volatile circumstances and volatile times. If I could ask Nick first to then think Keith and then Ian. I would say that the activities of the past five years in terms of investment that we have seen across the infrastructure that Professor Bowlin, Professor Ridge and I are part of has been a huge step forward in support. Especially in the place agenda, the world's advanced manufacturing and challenge fund centres have been set up all across Scotland, in particular areas such as Fort William and Annan and areas away from the central building metropolitan. Those give SME businesses in those areas free to use open access to look at new technologies, digital, robotics, automation and get them an opportunity to try before you buy and play with these technologies and understand what they can do for their business. There are fantastic examples of businesses who have adopted automation across Scotland. There are examples of businesses who haven't, and it's our job to take that pain away and to introduce these technologies to them in such an easy and user-friendly manner. They are then of Emsip and Dundee, they have the Robaterium University, Ems and Shinnon, and the NMIC as well, the Medusas Manufacturing Institute, the Innovation Centre and Professor Bowlin Frees Lightweight Manufacturing Centre. In the past five years, I have seen an incredible growth in those facilities that businesses can access very readily and easily to understand what that new technology could do for them. That coupled with the horsepower that you have with the economic development ages in terms of promoting innovation and getting businesses to look at processes and products is all part of the support network that is fairly unique to Scotland, because I see what goes on in England as well and has a great opportunity for those Scottish supply chains to use that and to make them more innovative and more resilient in the longer term. Can I ask Keith the same questions around innovation, resilience and what we need to do to support those technologies? I think that the easiest thing in the UK is to always blame the Germans. Let's explain the Germans really. Industry 4 was badged by German professors in the German industry as a way forward in automation and digital technologies. The major players in that game were probably German people like Siemens. The impression was given that it was very expensive. That started to come in around 2016 when we put the bid in for the digital factory. That is where we are working on. We are trying to pick what industry 4 is and what are the nine pillars of industry 4? What does that mean to companies? Where can an SME join that journey? It does not have to be by spending £2 million, which is probably the impression that it was always given. There are lots of quite low-cost technologies that can come in in senses. We are looking at quite old machine designs, old bridge port machines where you can get off of better regions of vibration, temperature, better control of the process. It does not have to be a big spend to get the solution. Increasingly, our work now is looking at the low-cost solutions to some of those problems, which is very necessary. The problem in the supply chain is that we tend to buy on price and eventually we get down to the point where we go to a low-labor economy. Unless we can take that out of the system, we are always going to have that problem. The PP was an example where eventually we went down to the point where we were buying PPE from China because it was very low-cost. The only option was to automate and make it lower-cost in Scotland. I think that the same old problem is who is going to do the automation? Have we got the experience? The company is to do it. To people who understand what they have got to do, it is not necessary to throw money at it. The innovation is to find lower-cost ways of doing it. Iain, you are coming on this. Just to reiterate what both Keith and Nick said, tangibly, some of the things that we are doing are complementary to what is being done in the UK, but we have definitely got a more focus on low-cost. If you look at our sister catapult in Bristol, which is the National Composite Centre, it has predominantly grown out of aerospace. I have really suffered because of the downturn in that particular market. We deliberately tried to position ourselves away from there, so we look at the low-cost, low-entry point of access for SMEs, which predominantly make up the Scottish environment. We are definitely positioning ourselves there to be more resilient and offer a better experience for people. As well, the very fact that the National Manufacturing Institute for Scotland exists is a very positive step. It has encouraged people like myself and my colleagues to relocate in the region. There are a lot of people who see Scotland as a desirable place to come and work. The fact that we have seen something that they would recognise and have their skill set is a very good step. If I can just ask a brief supplementary to that. As you were speaking, I was wondering around the connections. You said that the National Manufacturing Institute is really valuable. What are the interactions and the relationships with not only FE but HE as well? I am aware of quite a lot of university resource going on innovation. They are bringing in partners from around the UK and around the world to focus in on that. Are there structures or facilities that we could be thinking about to make sure that we are bringing people together in an effective way? Yes, they are very much structures. We are involved in skills development all the way through the national occupational standards. Everything from foundation apprenticeships all the way through to NGDs and PhDs. The outreach goes even further. We are about to host four schools within the Lightweight Manufacturing Centre today. We are around a go-kart challenge, so that is bringing in young people into a modern engineering environment. It looks like, in trying to encourage them, that engineering is not spanned as an oil. It is digital, it is high tech, it is about robotics and it can offer a rewarding and fulfilling career. I invite Gordon MacDonald to ask some questions. I have one specific question and a couple of general questions. Part of the focus of this inquiry is on the construction sector. We heard from witnesses last week that the number of sawmills in Scotland had reduced substantially since the 1970s. 70 per cent of the softwoods that are listed in the UK come from Scotland. We have also got a situation in which most of the timber used in construction is imported. What are the opportunities to increase the use of wood products in Scotland and what steps do we need to do to exploit them, given the difficulties of importing from the EU and the fact that timber prices have increased substantially in recent months? Wood is a constant material that we can handle quite easily. We know how to design for it, we know how to engineer for it, so we would be very happy to support companies that are looking to move into automation, for example. We can do more prefabricated things off-site, which seems to be the drive for a lot of the construction industry. There is a lot around metrology, so we are making sure that it is right for sign things of that. We are bringing a portfolio of technologies that may come from other sectors to bring to bear on the construction industry. I have also had some experience dealing with civil engineering and architectural films, where the lightweight and fire retardancy of composites is even more important now, given recent events. I have been able to reduce the weight of the building that we are putting up and using more organic materials, and net zero materials is definitely something whereby we could facilitate some of those leaps in innovation. We are very comfortable with those materials. Is architects specifying it and bringing it into their designs? On the National Manufacturing Agency of Scotland, the new site in Inchinnon, we have a lot of wood in the first part of the building. The entrance of the building is all wood, and it is actually purple. The architects brought in the idea of the moors of Scotland and the use of timber. It is very good, but it is a very small thing. When you go larger, there is a difference in the way houses are built in Scotland than in England. There is quite a significant difference. Much more wood is used. The construction industry innovation centre has been working in this area. We have worked with these sorts of people. There is a big push on modular build, which timber does play quite well into. Down in England with AMR, I will see where it worked previously. In Langoraw, we are looking at the 24-hour house build. It is programmes like that, where you are bringing timber early on with the architects. I say that forward as a programme, but that is the way we will increase the use of timber. However, we will probably have to get close to the architects and educate the architects a little bit more on the manufacturing capabilities of timber. I am involved in some of the activities in the lighting development programme for the Scottish Government. One of them is timber and construction. 23 per cent of houses in England have a timber frame construction, but it is 80 per cent in Scotland. We know that there is a Scottish Government commitment of £3.5 billion to build 50,000 new affordable homes over the next five years. There is a particular work stream that is absolutely exploring that. In conjunction with the construction Scotland Innovation Centre, as Professor Ridsway referred to, we have to look at how we can better exploit our own natural resources here and use more of our timber in Scotland. There is an active work stream looking at that with my colleagues in the Scottish Government. It is something that is being looked at right now. In general terms, is there enough support in place to identify and encourage UK companies to use local supply chains? How much collaboration is there between industry, academics and public agencies to establish local supply chains now? I think that making Scotland's future programme, which has turned into the manufacturing recovery programme over the past year, is a great example of collaborative working that works across public sector, Government and academia. There is a specific supply chain programme that I am the senior responsible officer for, looking at drilling in and understanding and reacting to what we have seen, both from a disruptive nature, where the PP is the example, but many businesses have had this disruption issue. It is our job. I always recall Professor Ridsway's comment that he made to me a few years ago. We are in the game of process innovation where we need to make something 10 per cent of the price that it used to be. That is exactly why we are setting up these centres across health businesses to drive profound transformational change into their processes to really drive down the costs that Professor Ridsway talked to. Over the years, as we know, things have just gravitated towards the far East. We have technology centres in Scotland now. The appetite, I believe, from the private sector to look at the disruption that they face, is to say that we can do this. Professor Ridsway pointed out that the Germans have managed to do it. They retain a huge amount of supply chain in their own country. Many of their businesses are vertically integrated, so they buy in raw material and process it all on site. Learning from that—as Professor Ridsway said—the cost of the technology that they have used has dramatically reduced in the past 10 years. There is a compelling final commercial case to do it. The economic case about the disruption of supply chains is a perfect storm where we can do something good here for supply chains in Scotland. Keith, what's your view about that? I think that one of the problems is the foundation economy and where we buy things. While we continue within the public sector to buy on cost, we are still forcing the supply chain somewhere to go to the lowest cost component, so somewhere we go to the far East. We've got to make a conscious effort to say that it's going to be bought in Scotland, and it's going to be a Scottish supply chain. That needs to go into the procurement specifications that really encourage companies. Because they know that the investment automation is still a danger that they'll be undercut by a low cost economy. I'm sure that one of my colleagues will pick up the procurement issue, but they've finished. Ian, have you got any views about the amount of collaboration and support there is to exploit local supply chains? Not specifically. I think that what we could work on is the cost of access to the centre, so make sure that it's affordable and that there's sufficient funding where required, so that the funding is accessible and has a low administration burden on companies. It's just really to encourage them to invest in these technologies. We're setting up the organisations there to help them on that journey, but it needs to be affordable to them. As procurement has been mentioned, I am going to bring Colin Smyth in next, as Colin had looked to explore those issues, and then it will be Colin Beattie. If Colin Smyth is fine to come in earlier, we'll take Colin Beattie. Thank you very much for that, convener, for making sure that I'm paying attention. Just on that issue, good morning to the panel. Is there a way in which we can stimulate manufacturing here in Scotland by using and having clear targets around the very substantial procurement that, for example, the public sector has in Scotland everything from local councils and NHS-building schools and hospitals. Is that one way to start to build that stronger manufacturing base here in Scotland? I'll put that question obviously to Professor Vongfrey. The point that Keith Mayer is really powerful is that we need to be able to give companies site of long-term contracts in order for them to have the confidence to invest in this transformational piece that they're going through or that they need to go through, so that they need to have assured long-term contracts for them to be able to invest. If you're a 5 per cent margin business, the cost of some of the technologies are still quite prohibitive, even though they're coming down, so we need to be able to really incentivise them along that journey to make them more productive and more efficient in their manufacturing. That comes at a cost. I suppose that the same question to Professor Ridgwick. I think that we should use procurement clearly anyway to buy Scottish and we should buy Scottish supply chains. That really is a policy decision, I assume. We have to be careful, you know, and you can see that it's not a law to print money, but I think that if we do insist and manage that supply chains and give people those long-term contracts, they will be able to invest in automation and be able to invest in the long-term. The idea is that we spend so much overseas that we can spend that in Scotland clearly as a thing that we should address, but we can't just throw a money at very expensive things. We've got to encourage companies to go to automation, which is long-term supply contracts. Nic Shields, based on your work, if we had very clear targets around local procurement when it came to those contracts, is the sector geared up to adapt to that? Again, following on from the previous two speakers, I think that there is up-front capital expense that is required. When we look at procurement approaches that we take and we're all involved in organisations that procure things where we look at our best value, where you reach a minimum acceptable quality and then it's really down to price, so that does drive many times when it comes to commodity purchasing decisions towards the Far East. One example that we had was a PPE manufacturer in Scotland after the orders were placed on them and they were able to invest, end up managing to produce PPE at a lower price than was previously being procured from the Far East. We have examples where it's been done. Obviously, those were extraordinary circumstances and that was done on a very quick timetable. A blended approach would be useful. I certainly look at resilience and where we see real areas of concern where we think that there should be a capability in Scotland, but I think that economic benefit layered on top of a procurement decision that would have a wider supply chain and gearing impact in the economy might be something that could be considered. However, it will come at an incremental cost, so there is no doubt about that. I certainly think that it's worth exploring, yes. Can I come back to Professor Bonford and Professor Ridgway as well? Are there any other policy initiatives that you haven't already mentioned? You've also touched on a few issues and I've mentioned procurement targets, but are there any other policy initiatives that you would like to see from the Scottish Government to tackle some of those supply chain challenges that we have? You've mentioned one or two so far. Professor Bonford, what other initiatives do you think that the Scottish Government should be pursuing? I think that funding needs to be streamlined. We spend quite a bit of time trying to match a company and its desires with the appropriate funding bodies. Having that streamlined and having a single point of contact for funding streams would help everybody out, frankly, because we tend to see a portfolio of different funding appearing. Some are quite transient, some are more persistent. Each has a different requirement in terms of administration loads, so you know how much effort you put in them. Some of them are competitive, so there's no guarantee that you're going to get the funding for that. Streamlining would be really helpful to my organisation. The same question to Professor Ridwis on here. From my point, there are probably two things, one quite controversial one. We focus quite a lot on low-cost commodities, things like the PPE and the food and so forth. There are some very big, very high-value items that are in the procurement arena, that's the right word. Ofshore wind sound floaters, we want to get 70 per cent or more Scottish production. Have we got the capability to do that? How do we get the inward investment in? We're probably going to need to bring inward investment in. The wind turbine is now probably, that bit is a commodity. The floaters where the value is. How do we encourage inward investment? Have we got a good inward investment proposition? I don't think that we do in Scotland. I don't think that we have enough encouragement to come to Scotland to do that and to set up factories. I think that there's a problem around the high-level skills, such as welders and machinists and so forth, where the FE sector is too broad and we need to probably, in my view, bring out the manufacturing, engineering part of the FE and build its image. Almost like the Manufacturing Skills Academy, we make it a national thing that you're proud to become an apprentice and do that route. I think that just generalising on apprenticeships gives it the wrong image. I think that that's important. Looking at other things that are on the horizon, Scotland's got an ambition to be an energy exporter from a policy point of view. Personally, I don't think that we could ignore nuclear, and I think that that's a big opportunity to deploy and build nuclear in Scotland because it's a clean energy and it's very hard to meet our net zero targets without nuclear. I think that there's an opportunity for Scotland that, policy-wise, I understand the policy, but I think that we should be thinking that we should look at it. That's very interesting. You touched on skills in the perception. What are the other reasons why we've missed that boat, I suppose, around manufacturing and turbines offshore? Demmark is so far ahead of us, so what do we fail to do and what lesson do we need to learn from that? We've lost a large-scale manufacturing and we lost that in the UK quite a number of years ago. We've failed to invest as a UK in that capability. If you look at just things like the Tull-Borny machines for HS2, we haven't got the capability in the UK to machine 10m diameter. They went to Austria. If you look at things around some of the wind turbines or what happens in the north in Scotland, a lot of big things go to Norway to be machined because we haven't got a large-scale manufacturing capability. We've got it in shipbuilding, in fabrications such as Babcots and BA systems, but we haven't got a high-quality good machine shop in Scotland. We haven't got it in the UK. Those are challenges when you come to these big high-value products. We've only won forge in the UK. We've forged masters in Sheffield. We've now got a second forge, but that was a huge weakness in the resilience of the supply chain. There are big investments, and the return on those investments has probably not been good enough to attract that private sector investment. It has needed, such as in forge masters, the Government's MOD to step in and solve it. It is a decision that we have to make. If we are going to encourage companies to either come and settle and manufacture in Scotland or encourage companies to develop that, it is not a cheap option. The long-term, low- and long-term investment is not required. Iain had wished to come in on the line of questioning. Iain, can I throw something else in? I will let you come in. It is related to procurement. Other panel members have talked about far East imports. We have had suggestions that we should be doing a whole-life carbon costing that should be included in the costs for importing goods. Obviously, Scotland has ambitious net zero targets. Iain, do you indicate that you want to come in? Can you pick that up, please? Yes, I just wanted to follow on from what Keith was saying about energy. The cost of energy is often quite a barrier to companies coming here. If we are talking about heavy industries, then in other countries, energy is often subsidised. That makes it more attractive for those companies. I can think particularly about the carbon fibre manufacturer that we have. There is a big part of my industry. We have SGL up in Europe and are doing very well, but we want to see more companies coming. Those processes are very energy-intensive. Do you have any views on carbon costing, whether that should be included in it? Yes, it is very much at the forefront of what we are doing. We are investing in lifecycle analysis technology, so we have been able to absolutely analyse the cost of energy and the environmental impact of processes that are going on. We have dedicated staff to look at that. We are investing in software to do that, so it is a service that we should be able to offer companies. You rightly point out that we should benchmark our processes against other competitors, because we might find out that we are more competitive in those aspects. We need to talk about that. I had plans to bring Colin Beattie, but I understand that Fiona Hyslop was going to look at carbon miles. I would be happy to bring Fiona Hyslop in at this point, and then it will be Colin Beattie. I apologise to Colin that I have moved you twice, but to keep the flow going, I will pass over to Fiona Hyslop if that is okay. I am interested in that issue of how we can marry addressing sustainability and resilience of domestic supply teams with that net zero goal. A lot of what is imported is from the Far East, particularly in the construction sector, as we heard last week. Getting back to basics, we know that construction is to help in our recovery, and it is a global challenge as cement. Last week, we were hearing about an opportunity to investigate replacements for cement with next-generation materials and innovation. In the net zero committee just yesterday, we heard about the potential in Scotland for carbon capture and storage to help to address some of the cement issues. We do not address cement globally, but domestically. We will be able to help to address some of the net zero challenges. I am not sure whether cement is particularly in your area, but it is the concept of how do we marry interruptions of supply chains and how do we do things domestically to help supply key sectors, but at the same time perhaps become really innovative globally in a way that the world will need in terms of net zero. How realistic would that sort of concept be if we put our mind to it? Maybe Nick Gifford could come to you first and then to the others. If cement is not your thing but you get the concept of talking about the carbon miles issue, just as procurement is, is that a policy intervention that could help that domestic economic innovation agenda? Nick Gifford, first, please. I am sure that cement would not be my area of expertise. I guess that I would defer to my colleagues in the Construction Centre in Innovation Scotland, but it is certainly on the carbon miles thing, yes, absolutely. It is difficult in a global supply chain. We know the further the commodity comes from, the more carbon miles it attracts. How do we account for that in the procurement process? I think that it is an interesting challenge as a programme that we are running with colleagues in the Scottish Government Syntec. I was helping businesses to just analyse what Professor Wamprey talked about there, the carbon impact of what they are doing and identifying those areas within their business that really do, where they could really make a difference. I think that that would be a really good start point in terms of helping businesses to understand their carbon impact through their supply chains. I think that that is something that we have to explore. The solutions for which are not there at the moment, but it is definitely something that I would say that we would explore. I would probably defer to my academic colleagues on the cement question. Keis, you have been driven by a lot by low-carbon and digital, initially in the aerospace sector, but can that thinking be applied to the resilience elsewhere, particularly in the construction sector? Yes, we cannot subcontract our carbon footprint, can we? If we say that we have net zero but we buy everything for the far east and not taking those carbon miles in, we are cheating the system out, we are cheating ourselves. We have to be able to measure it. What Ian Sayne is right, we need a gorg efficient way of calculating those carbon miles. There is software about some of it that is quite challenged and some of it has differences in the figures, so we need to look at that. We should definitely put that in the programme of specifications. It should be a consideration. If we want to look at something else, the private sector is very good at stepping up. Innovation is good at filling those gaps, but they have to see a market. If there is a market there and there is a business need, undoubtedly somebody will step forward with a solution. It is creating that environment from a business point of view. By saying that we do measure carbon miles now, we are going to make it more difficult to use cement. Somebody will say that there is a business opportunity for me and I can see a long-term contract and I can invest in innovation. That is the way in which we challenge that. I am coming back to you, Ian, because you introduced that in terms of that thinking, that marrying of procurement localum will be undercut if we are the only country in the world that does that. In terms of leading by example, could this be something that would help to drive innovation and help to build resilience in the supply chain? We are particularly interested in construction, but it could apply to other areas. It is a great topic. It might surprise you, but somebody who runs a lightweight manufacturing centre knows a little bit about cement and concrete, because it is a really interesting material. This is where the academic side can really help. There is research going into, for example, using cement for carbon capture, curing concrete with CO2, and you can lock it into those structures. That is where we can help with that translational research piece, which is where we are set. We are set between academia and industry in trying to facilitate those two different personalities and try to get them to work together. We can also help with things like for example the recycling of wind turbine blades, which is going to be a massive issue. We just want a programme to help to scale up the recycling of wind turbine blades. What do you do with that recycling? That glass fibre that comes from the wind turbines is shredded, so it is quite short fibre, but that can then be embedded into concrete and cement to improve its structural performance. It also gets rid of the environmental impact of having to dispose of wind turbine blades. Those are very much novel technologies that need centres like us to be able to help companies to de-risk these technologies and understand their properties in such a way that the engineers can then specify them. They can say, okay, I have this recycled material here, which has got this performance and I can use it in that part there. We can help them along that journey with that underpinning data. It is also tied, but often quite disparate industries together. The wind turbine industry and the cement industry are not traditional bedfellows, but there might be some synergies there with both industries that are having that positive gain. Thank you. I am obviously trying to get the private sector to see the market opportunity in this. I notice that Nick wants to come back in before I hand back to Claire Baker's conversation, because it has definitely been very patient. Nick, I think that he wants to just come in on that. It came to mind, given the example that we invested in a university spin-out from Heriot-Watt University, who made a recycled brick using the material from key stocks. We traditionally go to landfill that uses only 10 per cent of the energy that traditional brick would require. It is an early-stage spin-out, so we have examples of ourselves where we have looked at that sector and the key brick is called Kinetic, which is the name of the company. We have really good examples of some fantastic innovation in Scotland that we in Scottish Enterprise help to support from a university spin-out that really does make a significant contribution to that decarbonisation of the construction sector and its Scottish-originated technology. Thank you very much, Nick, and I will hand back over to the convener now. We have had a fair amount of discussion about opportunities in connection with our own domestic supply chain. One of the solutions to doing this has been put forward at varying degrees of automation and so on, but automation does not work with every sector and every aspect of the supply chain. I am reminded of evidence that we received where a company was importing many pizzas from Italy and looked at the local supply chain to see if that could be replicated. The price was four times the cost of the imported item from Italy. That is a heck of a lot of automation that is needed to cover a fourfold increase in costs. Exactly how competitive is Scotland as a location in terms of being able to meet the supply chain needs? Is it simply that the economies of scale are such that, as a small nation for the most part, we are not going to be able to build our own supply chains? Maybe I can start by bringing Keith Ridgway in on that. We want high-value manufacturing, don't we? That is what he was down to. The one that you mentioned, even pizzas, can be automated quite easily. I am sure that they will probably be automated in Italy. Italy has run ring-rounders, to be honest, in automation. They are in quite mundane stuff, such as cutlery and things like that. We are automated very early on by the Italians. I still think that that is the answer, but it is all right. We do not have to do everything, but the higher value stuff is definitely what we need to go for. For years, I have been hearing that the UK is moving to higher-value goods away from the mass production more into high-value niche areas. However, it does not seem to have worked so well. No, I do not think that it has. If you take wind turbines as an example of what we have talked about before, we were slow to move into it. We have lost a capability, whereas Germany and Italy and France invested in those industries. We did not. That is a national problem. It is not a Scottish problem. We do not have large-scale machine shops. We have one forge. There are quite a lot of things where we are limited. We do not have a machine tool build. If we go around our factories and if we go around the MRC or whatever in Sheffield, it is embarrassing that all the machines come from Japan or Germany. They are not low-cost economies, but we did not support our industry. When we have had downturns, we just let the industries die. There have been a lot of homelessness in the past. Are you saying that it is not just a question of how expensive it is to produce something? It is simply that we do not do it anymore. That is the fact. On large-scale things, we do not do it. We could not buy tunnel boarding machines for HS2. We could not buy in the UK. If you look at the trains for HS2, we do not make trains. What has happened is that, if you look at it, the tachy has got the big order, and they said that they are putting the factory into the north-east of England to build trains. It is not to build trains, it is to assemble trains. The trains will be built in Japan. The components will be from Japan. We have let those industries die and we have to rekindle those industries. Is the problem that the market is not big enough, the domestic market is not big enough to support those industries? No, I do not think that it is. The market is big enough. You could take a variety of things, such as rail. We are completely restructuring our rail system. You are right the way through from lines to the systems to the vehicles themselves. If you look at the energy, power generation, there are big markets and export markets, if we are good at it. However, if we lose the capability and have the capability to make large and expensive items, it will take investments to bring that back. We are talking hypothetically about how to grow the domestic supply chain, how to substitute our own products into that train. However, if there has been long-term no-will to do that, is there any change in that attitude? Is there any indication that there is a willingness to do that now? I think that we have to keep separate into low value. If you take the seafood industry, which we mentioned before, the labour shortage is such that it will have to bring an automation. Then we have the challenge on skills to bring the automation in. That is back there. If we go right to the other expertise teams and say that we are looking at high-value things such as floating wind turbine, the level of investment need is huge. What do we do? Do we develop? Do we let it go and say that that will go to Norway and Denmark? Or do we say that we will fight back on that? Then we have an option. Do we bring in investors in, such as accurate people like that who will come and build factories in Scotland and encourage them to develop a Scottish supply chain? However, in some ways, that will need investment, so they have to see long-term demand in Scotland for that. Or do we try and develop locally, which is very difficult to be found? Is Commander Scotland sufficient to support a whole industry? Scotland cannot do that. It is a UK problem. Energy is a UK problem. Scotland does not drop the ball on its own. As a nation, as a UK nation, we have not supported our manufacturing industry for things like machine tools and large-scale manufacturing. We have allowed people to go and encouraged people to go outside. We have bought from the Germans and the French. We have played very fair on European curriculum rules. I do not think that everybody played quite as fair as we did. It was always a challenge. Our industry is dying. We have not got a large-scale machine shop in Scotland. Can we support one from investment, private investment or do we need some government encouragement to put that in? If you look at nuclear and nuclear reactors, you have to forge the reactor components in the UK, which is Shepio forgemasters. If you do not, you forge in Korea and Japan, so then all the primary machine and everything is done in Japan. We need these primary industries to encourage people to invest in them. Iain Van Pray, do we have the will and the capacity to build the domestic supply chains to substitute our own goods? Is it going to happen? I would say that we have definitely got the will. I see it in my staff. Some of the things that we are trying to do here are transformational. I do not think that we can compete with the commodities head on. We have to do things differently. An example of that is that, in terms of the constant material supply chain, we are focusing on creating carbon fibre from biomass. That is something that is readily achievable in the Scottish context. Biomass for us is wood pulp, paper pulp and things like that. We are looking at a local resource flying our academic prowess to some of those grand challenges. We are looking to see how we can disrupt. Disruption is something that we are seeing in a number of industries. It is maybe the opportunity to identify those that we can capitalize on so that we do not have another wind turbine miss. We can look at what my background is automotive. There is huge disruption in that industry right now, the drive to electrification and autonomy in there. How can we address that? Where can we come up with a coherent set of technologies and the ecosystem with which companies can recognise technical support and financial support to recognise Scotland as being the place where you come to do your innovation? From that, we will see things that we had not even imagined. However, we just need to have that ecosystem there. Are you thinking that it is not there now? I think that we are building it. I can see it with Enmys and what we are trying to do. Even in our staff portfolio, we have a young engineer who joined us from NASA because she recognised some of the things that we are trying to do. In Britain, we do ourselves a disservice. We have the right culture for innovation. We just really need to have the right environment with which to exploit it. As I said to Keith Widgeway, since I can remember, I have been hearing that on a UK basis that we should be taking niche markets, high-end products and all the rest of them, because we cannot compete on the mass-manufactured area. I am not conscious of a tremendous success in that, and we seem to be talking about that again in connection with the supply chains. I mean, so far, everything seems to have been talked about. I take your point absolutely. One of the things that we are trying to do is to have sticky investment, investment that sticks and creates jobs and things like that. That is part of our strategy. I can send you more details on how tangibly we are trying to do that, but it will not be overnight. I am sure that the committee would be very interested in any information that you have on that that you can share with us. I would be happy to. Could it be bringing in Nick Shields to comment on some of the things that we have been talking about? Sure, Mr Beattie. The manufacturing business is ideal with who they have their own intellectual property. Generally, they export everything that they make. I would like to see more of them, but they are very export-oriented. If you build a manufacturing business in Scotland, the Scottish market would never be big enough to satisfy that, but that is what you want. You want an export-oriented business. Most of our exports that Scotland produce are manufactured goods, and that is a fantastic way of growing wealth into the economy. Professor Ridgby would say that it is a high-skill, high-value job. There is an amount of demand that we can maybe leverage on to help to build that capacity, but you would want those businesses to export and not just look at the areas where you would think that they will satisfy the Scottish demand alone. I can think of, in the past few years, a look at the space sector. It has come from nowhere. A couple of weeks ago, I know that you had a gentleman on from the hydrogen company, Logan Energy, so it is very much a skills-based business. It is very much a high-skill producing goods, and it is a service business as well, selling data. We can see that to me, the typical model of where the success will be. It is a high-skill, high-knowledge content, export-oriented, using the fantastic academic base that we have across Scotland, in terms of software, digital design and engineering. We can see emerging opportunities through our national priorities in areas such as decarbonising heat, zero emissions vehicles and the real opportunities to crystallise the capability that we are building in Scotland just now with centres that Professor Bonfri and Professor Ridgby work about looking forward to driving those knowledge-oriented businesses that, well, their business should hopefully satisfy what the demand is in Scotland but exporting beyond. Nick, you seem to be emphasising a great deal more than the other two panellists in relation to the need for economies of scale. In other words, we have to build a market that, at least a manufacturing business that not only meets Scottish needs in terms of their supply chain, but must, at least in part, cover a chain out with Scotland so that we need the economies of scale from what you are saying. I think that you struggle to build a manufacturing business that would just satisfy a Scottish demand. I think that the business always has to be outward-looking and global-looking, especially if it has its own intellectual property. Many of the businesses that I see can satisfy what the demand is in Scotland but will go beyond that. I think that that is what we want. It is touched on earlier on about those niche products that the Germans and Italians are good at that have a very niche proposition but a global offering. How do we look at the Scottish opportunity at the same time to use that to leverage it? I will go back to the PPE. That was an amazing example of that. I know that the businesses are producing PPE. They are all exporting as well now, but we are pumping them to use that fashion term in terms of the demand that Scotland had at the time and now that they are exporting. I will change the focus a little bit and talk about finance. We had more bad news this morning with CPI inflation rising by 5.1 per cent in the last 12 months. Of course, that was much higher than forecast but, in particular, Andy Verity of the BBC said that pressures coming from rising commodity prices and prices paid by manufacturers of raw materials are up by 14.3 per cent during that time. I have a couple of questions that I want to take for you in terms of your knowledge of manufacturing generally. How are businesses coping, particularly SMEs, given the level of debt that they are already carrying, whether it is bounce-back loans or sea bills? Do you anticipate cash flow problems for the sector with the rise in commodity prices and the supply chain issues that we have already discussed? I should have said that I would like to ask you all, but can we start with Nick? The UK PMI index, which we can see for input costs on raw materials, is very high. My colleagues have discussed that across various trade associations. I have said that the SMEs in particular are suffering at the higher end of that. That is an aggregate PMI, so there are different price points depending on what volumes they are buying, so the larger enterprises are always able to negotiate a better price. I absolutely think that we will see issues in terms of that. I think that the comment that I made earlier on when someone said to me from the business sector, I cannot enjoy how busy we are because of the supply chain disruption issues that businesses are suffering from. I think that the SMEs will be the brunt of that, unfortunately. I would like to think that we hope that they can trade out of this. They are busy and the order of books are full, but we know many businesses that can build up to 90 per cent completion, but there are two critical components. Many yards of batteries in Scotland might be quite full of part-built products, so we are just waiting for that final component to come through. That is a concern, and it is something that we need to look out for in terms of those businesses. I hope that the financial support systems around them will recognise that and say that they can trade through this challenging time. It is definitely something to watch, but I guess that all businesses are in this because it is an industry-wide issue. It is something to look out for. I am not seeing too much evidence of the stress yet. There are always businesses in distress, and I know that there are a few construction businesses that unfortunately took fixed-price contracts two or three years ago, and then I have had to absorb the price rises. That is a tragic issue for them, and I sense that they are stuck with that. You would like to hope that businesses and the whole commercial infrastructure will take a nice sense of the unique circumstances that we are in just now of quite rampant inflation and input costs. Can I ask Keith and then Ian, and then I have one more question? We have seen issues on steel supply, which has been felt very badly by the SMEs. The reason that the SMEs feel that they are badly is that they buy low quantities, quite often specialised steels, with very little buying power, so they are basically bottom of the list of customers to be served. It is a problem whether we can encourage more production in Scotland or in England or wherever, particularly in the specialised steels, but I think that the whole industry is suffering from my cost. If you look at materials, and the general rule that we have is roughly a third to third to third, but third materials are a third labour and so forth, companies are saying that the problem is still labour and skills, more than materials. I think that they will put a price on when people recognise that their price increases because steel increases in price, but they will still come back and say that our primary problem is skills. We are suffering from that as well. We have seen the price of aluminium go up 40 per cent, affecting components and tooling that we manufacture from. From our own side, we have had to react to that in ways that I do not think will be untypical for industry. We are looking to the supply chain to see whether alternative materials can be re-engineered or products for those cheaper materials, so we are exploring different avenues. The other thing that we are doing to try to have a positive impact on that is that we are investing heavily in recycling and reuse technologies. With those, for example, we took the wind turbine blades. We heard recently that China will soon be dealing with 750,000 tonnes of recycled wind turbine blades per annum, so that is a huge quantity of material that is currently going into landfill. While the scale is not the same in the UK, we are only re-using about 6 per cent of the glass fibre that goes in a wind turbine blade, so we are looking at technology to try to recover more of that and impart it with higher value properties. Effectively, we have an indigenous supply chain by the very fact that we are recycling those materials, so we have more control over the quantities and the costs of that. We should be able to feed that back into the supply chain, so none of which is going to happen overnight. However, we can see the larger problem on the horizon and we are trying to do something about it now. On that point, there have been a few mentions of innovation in supply chain materials that will meet our net zero targets. I suspect that all the convener will be able to confirm that. I think that that is something that is of great interest to the committee on that kind of innovation. However, just staying on the financial point, we all appreciate how important innovation is. It is a question for yourself then, Ian. Do you anticipate or are you seeing access to finance for this kind of innovation that is presenting with any problems? Is it difficult to access the capital? It is. We have been relatively successful for a young company in that we are part of a £2 million investment in winter bymblade recycling. That was an innovate UK smart grant. The challenge with the smart grants right now is that only around 2 per cent are being funded. There is a huge amount of effort that goes into putting in an application, getting the consortium partners and everything. Companies are now seeing that this is high risk, so they are tending to avoid those types of large grants because they are not being awarded at a rate that allows them to commit those resources to. Anything that can be done to facilitate that, to my earlier point, might be streamlining the funding, making it easier, making it easier to have a single point of access to funding, I think, would be hugely beneficial to SMEs all the way through to primes. That is very helpful. Again, if there is any further information that narrows down this topic in terms of the type of bids that I have been having done at a UK finance one myself, I appreciate what you are saying, but I thank you very much for that. Just to finish off, if I, Keith or Ian, had any final points before I move on, I am conscious of time for everyone else. Any final points on investment and innovation finance? I also shall not finance, but I think that on the innovation materials I think that that is a very valid point. Steel is going to be a problem, a long-term problem. How we bring innovation to that industry, our total materials is a really good area, a good area for Scotland as well. Ian, any final comments before we move on? No, I think that Keith probably went on to do it. Okay, thank you, Camryra. Thank you. I will now bring Jamie Halcro Johnston. Thank you, Camryra. Good morning to the panel. Can I direct my first question to Nick Shields? Basically, we have covered a lot about the opportunities for Scottish supply chains and strengthening those. Can I ask what public bodies are doing to encourage inward investors into Scotland to use Scottish supply chains for components and the like? From our perspective, the opportunity to attract inward investment is a huge part of the infrastructure that we already have here. As you know, we have very active inward investment colleagues and SDIs. Again, I am deferring to Professor Ridgway and Professor Bromphrie. What we have built across Scotland in the past five years in terms of a very attractive proposition by looking at technology centres, innovation centres, manufacturing institutes, the Missile and Scotland innovation park, we have built a very industry-focused and industry-facing support mechanism to assist businesses with material selection technologies, processing and digital automation. There has been an enormous effort in the past five to ten years to build that attractive proposition. That is what we see at Glasgow airport with advanced manufacturing innovation district. I would say that, coupled with our very active and highly successful inward investment scheme, we attract second to London across the UK. However, there has been a real focus on that particular technology proposition that will offer a net zero proposition, zero emissions vehicles, decarbonising heat. I really see that there has been a very, I guess, cross the Government-colleged collaborative approach to doing that. We will hopefully bear the fruit from that, as Keith and E have been saying earlier on. I am so enthused to listen to the fact that people from Massa choose to come here and live in Scotland now. If we are attracting that sort of talent, the seed end of the new technology, that can only be a great thing. Thanks very much for that. I will come to Professor Rajoy and Professor Bumfrey. Can I just ask Nick, are there areas where you think there is still gap so that more can still be done within that? We can always do more. We have to learn from areas in the past such as the renewables area, but there is a huge opportunity to look at the north-east in terms of a just transition. We have not really touched on the fantastic capability that those businesses have and how we can then leverage that to a net zero future. The engineering skills that are fantastic in problem solvers, component manufacturers that have all revolved around the oil and gas market and how we best utilise the amazing capability that that offers Scotland in terms of driving that forward. We just continue to need to explore how we best use the fantastic skills and resources that we have got in Scotland to look towards the future industries, and that is the turning that we will continue to be on. Thanks very much for that, Nick. If I can go to Professor Rajoy first and then maybe to Professor Ronfrey. On those lines, I represent the Highlands and Islands. We have touched upon some of the examples of manufacturing and business being done in some of the more remote parts of Scotland, but obviously there are still barriers. I was just wondering if you, starting as I said with Professor Rajoy, could outline some of the barriers to some of our remote areas, Highlands and Islands specifically, in terms of being part of that supply chain and what opportunities are there still? One of some very good things came out of it. I think that one of the space companies had gone on to, I think, the Shetlands and they wanted a part making. They had actually gone into Europe for the parts and the local companies stepped up and made them parts within a matter of days. There are opportunities in the Highlands, but going back to investment, I had a lot of experience to this round of Sheffield, where we attracted McLaren, Rolls-Royce and Boeing to invest in Sheffield. There are about five things, because it is a very competitive market investment. Companies who are coming look for those five things, and that really is other skills readily available there and are the appropriate to what they want. Is the space to build or are the buildings already there that they can move into fairly quickly? Access to research, rare and dev availability of their support, is a factor. Finance support and soft landing with finance. I do not think that we have got that well organised at the moment. When we dealt with Boeing in Glasgow, we did very well at bringing a one Scotland team together, Scottish Government, Scottish Enterprise, National Manufacture Institute, the skills developed in Scotland. I thought it was a very impressive thing that we did. It worked, but with other people that we have dealt with, the thing that has been missing has been financial incentives. We are competing not only within Scotland and the UK, but globally. We are competing for a lot of that. We have been dealing with a company, I think that they are going to Luxembourg based on tax incentives. There are things that we can do to encourage people. It is a very attractive place to live in Scotland, but it has transport difficulties and those are issues that we have to address. We have to overcome those by doing other things such as access to research, access to better finance. I think that some spec buildings are important. We find it quite difficult to find a battery space to put a start-up company or incubator company in. Those are very valuable. I think that is really what it comes down to, that whole package. Putting them down together, I know that in Shaffield, we almost had a matrix over the years of the help that would be given in apprenticeships, research and development, rent rebates or rate rebates. The bottom right hand corner was a value to the company, which was really quite impressive. Building up that model is important. Minister, I will defer to Keith on that. I think that he has summarised my views on that as well. Thank you. I would like to thank all the panellists this morning for sharing your experience and expertise. That brings us to the end of the session. I would invite panellists if they would like to provide any supplementary evidence following the session. Please feel free to do so. If we could maybe get some further evidence from Scottish Enterprise, we would be interested in how many businesses the Scottish Manufacturing Advisory Service supports annually and how it is impacted and monitored. However, we can send you a note to outline the further information that we are looking for. It might be easier to provide that to the inviting baronette committee this morning. Once again, thank you to the witnesses. We will now move into private session.