 Good morning, and welcome to the 12th meeting of 2022 on the Economy and Fair Work Committee. Our first item of business is a decision to take item 4 in private. Our members content. Our next item of business is a continuation of our town centre and retail inquiry. The broad theme for today is e-commerce and opportunities for Scottish businesses. The committee will hear evidence from two panels. I welcome the first panel, which is Gillian Crawford, who is managing director for Lillie Blanche. Caroline Curie, chief executive of Women's Enterprise Scotland. Stuart McKinnon, head of communications and public affairs at the Federation of Small Businesses Scotland. Peter Mofforth, chief executive of INDIS. Thank you all for coming this morning. As always, I can ask members and witnesses to keep their questions and answers as concise as possible. You may not be asked to respond to every question, but you will get an opportunity to speak during the course of this morning. I will give you all an opportunity to have a brief go at this one. During the evidence that we have heard so far, there is always a discussion around the role of e-commerce. Some will contend that it is an undue threat to high streets. It is one of the contributing factors to a demise in high streets. Everybody shops online now and nobody goes down to their high streets. Is that how you see e-commerce in the future? What do you think is relevant? Do you think that it is a threat to the high street or does it have something positive to bring to the high street? I will bring in Gillian first and then I will come to the other panellists. Gillian Smith is a myth that that is the case. You can look at the statistics and see that that is very much not the case. UK online retail sales grew to £119 billion in 2021 and accounted for just under 30 per cent—28.9 per cent—of all retail sales. The most retail sales still take place on the high street. It is clear that e-commerce is a growing market but it is also clear that the real sweet spot is that omnichannel experience. If you have a bricks and mortar shop, you are going to do much better with e-commerce than if you have not. It is a really dangerous fallacy to suggest that it is e-commerce versus the high street because it so is not. One statistic that I would like to point out is to show you how future proof of the idea of bricks and clicks is and how the way that we shop is changing but it is not going from one thing to another. It is coming into a much more omnichannel mixed way of shopping. We just had the list for 2021 for America and traditional retailers with bricks and mortar stores dominated the top 10 e-commerce websites with the biggest gains in Google in 2021. There was no pure play e-commerce site in the top 10 in terms of Google e-commerce gains, and that is because of their bricks and mortar stores. Even if you are a small business and you have bricks and mortar and e-commerce working together, that is absolutely the best way to do commerce. The idea that it is e-commerce versus the high street is something that we really need to put aside right at the very beginning because it is just not true. Thanks a lot. I would initially point out that the problems that Scottish high streets and town centres face predate the rise of e-commerce. Over the past 30 or 40 years, we have seen supermarkets, we have seen out of town retail, we have seen a shift in how we work and live, and all that has had an impact on our town centres and our high streets. One of the few silver linings out of the pandemic is that we have seen a big spike in the number of businesses and small businesses improving their digital capabilities. Survey work that we did suggests that a fifth of Scottish businesses said that the Covid crisis led to them adopting new digital technologies, with one in seven businesses saying that the pandemic led to them selling online for the first time. From our point of view, there is a real opportunity to try to cement those gains and the digital capabilities of small businesses by providing smaller firms with the right sort of support to really professionalise their offer. We have seen some of that through the digital boost co-investment grant, which we think is an excellent initiative and we would like to see that retained, but there is further work to do in our view to use that help that is on offer as bait, if you like, for smaller firms to really build their digital capacity, both in anechoic commerce sense but also to really improve their business function overall. Before I come to Peter, can I just follow up with Stuart? Some of the local businesses that we had at the round table and ones within my own region have spoken to me recently about the fact that, during the pandemic, they started selling online and that their online sales were really positive and that sales were a growth part of their business. They were really seeing quite a significant dip in online sales. That could be the cost of living crisis, I think that would be a factor, but they are trying to understand why that is. There are small businesses, so when they are making investment decisions, they seem to be trying to invest in the online offer and make that more attractive, or to focus on the local market, which has been the market prior to the pandemic. What advice is an organisation? Is that a common story that you are hearing from small businesses and what advice would you give them? There is a tension there about having to try to ride both horses, running a shop and running an e-commerce business. As an organisation, FSB offers a whole stack of support for members looking to expand their e-commerce offer and improve their retail offer from our point of view. I think that the situation that you have described where perhaps it was the same customers that were using the businesses online that are now visiting them in person is something that we can all understand. However, I think that if we can get the support right for small businesses, it is possible for many of them to have complementary e-commerce and retail offers. The whole thing is being put forward almost as a combative problem between, on the one hand, e-commerce using different techniques, different skills, different approaches to trade and traditional businesses. That is a complete misnomer. It used to be the case that a business shop window was a large sheet of glass. These days, high street retailers shop window is very often this. People come into town and they have already done their research. They know what products so they just want to work out where they can find them. We have worked with big, highly successful Scottish companies such as Chisholm Hunter, whose businesses have never been stronger and fitter because all of their products that they have in store are communicated through Google so that people can find them. Even if you are a traditional retailer, my suspicion is that probably 98 per cent of Scottish retailers do not use Google Merchant Centre. They do not upload their inventories, which are free systems to use so that if anybody is looking to purchase something, they can just look in Google Images, Google Maps or whatever, and they are the products are. These are free services. They are easily available and instead of it being two camps, e-commerce and high street retail, there is a complete spectrum of technology. These things are easy to use. The elephant in the room is skills because people just do not know what they do not know. Nobody is providing the training to help people to make the best of trade in the modern world. Thank you, Peter. Good morning, Caroline. Do you want to come in? Yes, thanks. I would like to pick up on some of those points that were made. In terms of training what Peter has said, as an organisation, we were funded by the Scottish Technology Ecosystem. We have just finished delivering a series of 17 different events. They were taster sessions to see how women would engage with technology. We set out from the outset to support women to engage with e-commerce because women are the majority of employees in that sector, as I am sure you will be aware. It is also a sector in which women set up a lot of businesses. I have just totted up the numbers last night. We had a total of 433 businesses engaging across those different events. We held peer learning groups. They were extremely well attended across all the different subjects that we trialled, but they were especially well attended in the e-commerce peer learning groups. We had two e-commerce peer learning groups. Other peer learning groups were on subjects such as cyber security, for example. We ran basic getting to grips with technology webinars. We had five of those. Again, on a range of subjects, we decided that we would hold two events on e-commerce. Again, those two events were extremely well attended. We held three master classes. They were on artificial intelligence, data analytics and a master class on e-commerce, which was very well attended. When we make training available to a community that wishes to engage, engagement is absolutely there. We only had a period of about two months in which to deliver those events. They were not particularly well advertised in terms of the length of time for businesses to have awareness of them. They were free. They went out to our community of women-owned businesses. By any standards, a total of 433 engagements across that reach is pretty phenomenal, and evidence is the desire of businesses to engage with technology. Our research over the years has told us that access to digital resources is one of the areas where women struggle persistently. When you make it available, they will engage. On the point about the dip in online sales that has cropped up in our peer learning events, and certainly our community are seeing that across the board as a bit of a trend, we discussed that. Again, skills, data analytics have already touched on the range of tools that are free through Google. It is making people aware of those resources and giving businesses the skills with which to engage. There is a plethora of free resources there, but it is curating that learning with different communities that is really, really important. For us, we know from our experience that creating a safe environment where women-owned businesses can come to learn and to engage has an impact and has an uptake. On the other point that I want to touch on, Stuart mentioned the digital boost grant. We are not quite as convinced that that is a robust tool for businesses to engage. There are some quite serious structural inequalities in the framework that is used with digital boost. For example, it is a graduated system. You have to be a vat registered business in order to access the higher grants, yet, consistently, our community is telling us that they cannot access digital resources. Those are not vat registered businesses. Those are small businesses that could be regenerating local high streets or in the retail sector, and they are unable to access the higher amounts of investment. The lower amount in digital boost is £5,000. That is not going to transform your e-commerce capability or help you with your digital ambitions. We are missing a serious trick there in terms of the opportunities to engage more businesses with digital and businesses that could really become the backbone of local communities. Women-owned businesses are only 20 per cent of best of the business base currently. Only 14 per cent—that is dipped down from 21 per cent—of employer-owned businesses. We have a phenomenal opportunity to engage those businesses with a digital strategy and a strategy of regenerating our high streets. I will bring in Michelle Thomson, who is interested in some of the issues that you have raised, and then I will come to Gordon MacDonald. Caroline, I want to explore a situation with yourself, in particular concerning women in enterprise. We have read a lot of context and background of how you support and develop town centres, and it is a highly complex area that I appreciate. I wonder to what extent you had given consideration of how well women-led businesses are reflected in what you have seen with town centre development. For example, we know that our cities have been designed around cars. Towns, in some respects, have inherited that as well. However, I have not heard very much, or it has been able to read very much about putting women's businesses or general diversity themes at the heart of town centre development. It is utterly lacking in the current strategy. There is reference to the fact that women are 60 per cent of employees. There is also a majority of small businesses that are set up in the retail sector. Currently, the strategy talks about inclusion, but it does not speak about the actual groups that are intended to be included. Women are a significant demographic. They are the majority of the population at 51 per cent in Scotland. If we want to have successful and vibrant town centres, we need a distinct strategy to engage women full stop, but to engage women-owned businesses. What could be considered are gender-specific initiatives. We see a women's business centre model as a model by which we can successfully engage and revitalise business ownership for women. It is highly successful in countries that have the leading percentages of women-owned businesses, so in Canada and in the United States. For example, in the United States, women-owned businesses have seen phenomenal growth on the back of the model. They are now 40 per cent, so that is double at best. We are 20 per cent, and that is probably slightly optimistic. In the United States, 40 per cent of women-owned businesses are 40 per cent of the business base. That is a model that is very successful economically. It is creating jobs. We already know that women contribute £8.8 billion into the economy. It is important to say in context that that is more than each of the designated growth sectors. At £8.8 billion, women's contribution is more than food and drink, it is more than creative industries, it is more than sustainable tourism. We need a dedicated strategy in order to unlock the full potential. We could do with another £8.8 billion in our economy. Women have also created 230,000 jobs. That is 13 per cent of private sector employment. We are a dedicated strategy to help women to start up businesses, to locate women's business centres and town centres. To me, that makes good economic sense, and we would urge the committee to seriously consider those strategies to engage women and to boost the economy and to create those new jobs that our communities really need. I can see Peter who had raised your finger. He wants to come in as well. On the Indes blog, there is a link to a large study that has just been conducted that suggests that e-commerce, by far, is the most successful area of digital in terms of gender equality between males and females at all levels. Unlike the gaming industry or cyber, or some of those other areas, there are a very large number. Around 50 per cent of business owners are female, e-commerce managers are female and at all levels within the group, there appears to be equality, and that really does not apply to other areas. I would like to make a quick point about enterprise support. Traditionally, our enterprise support models have been reluctant to support retailers, with the view that the bulk of the business base will take care of itself. Looking towards this week's local government elections, one of the things in our FSB's manifesto for this election is trying to get the business gateway service to provide dedicated support for minority ethnic and female entrepreneurs, which will have a key role in helping us to rebuild our business base that has taken a huge hit over the past two years. Official Scottish Government statistics show that we have got 20,000 fewer businesses in Scotland over a single year of the pandemic, and we need to see renewed action to rebuild the very small businesses that we lost during the pandemic. My last week's question, before we move on, has spoken about women's enterprise centres at the heart of developing communities, and I can see a very virtual link with getting more women involved in e-commerce and with what we want to try to do with encouraging STEM as we move down the generations. Are there any other ideas that would lend a shift to some of the systemic issues that we have around town planning? Most surveyors are men, most traffic planners are men and so on? That is perhaps a hard question, given that that is not your specialism, all of you, which I appreciate, but just any other ideas before we move on. I might just bring in Gillian. I am the only person who can see Gillian's request to cover as I am sitting, and I think that she was interested in the first question that she asked as well. Thank you. I just wanted to follow on from what Harry and Pete were saying. I am also chair of the British Association of Women Entrepreneurs in Scotland, and I am an ambassador for women's enterprise Scotland. In that capacity, I am interested in bridging the gender enterprise gap. I have written a paper on e-commerce in a particularly good position. As Pete pointed out, the barriers to entry are not capital-based, as they are in things such as fintech or other kinds of technological businesses. They are really skills-based and knowledge-based. We have seen that the key reasons that women find it difficult to set up and scale up businesses can all be overcome by using e-commerce as a model, because it is such a productive model and a flexible model. I have proved that in my own business in the way that I started up and brought my e-commerce business. It was a traditional business to start with, but we know that women have lower levels of capitalisation and lack of access to finance. There is a propensity for women-owned businesses to be run from home. There are issues around childcare and flexible working. There are lower levels of full-time employees in women's businesses. There is a concentration of women's businesses in the traditionally female sectors. All of those things play into e-commerce as a model, because e-commerce is a perfect model for moving from a job part-time or full-time into business ownership. You can do it part-time or at the kitchen table or with the kids around your ankles. You can do it while you are looking after your elderly parents. It is so flexible that you can do it five to nine. You can build it slowly, and you do not even need your own website. You can do all of that on platforms. E-commerce is such a flexible model that really all it needs is some kind of basic connectivity. That is why it is so good for rural businesses, for businesses, for people with disabilities or for special needs. There are all sorts of areas where people are left out of the mainstream of business ownership, where e-commerce can really play a very vital role. I have seen lots of other people do it, men and women, and people in rural communities. The big problem is that it is access to knowledge, access to skills and knowing where to go to get the information that is lacking. We talk about e-commerce and its place in the high street, and that is very important. This is such a golden opportunity for Scotland just now that, if we do not take it, we would be quite mad. E-commerce is growing at a rate of knots. It is difficult just now that e-commerce sales have dropped off the cliff with the pandemic opening up and people spending now on experiences and travel. E-commerce businesses are finding it very tough just now, but we will ride through that storm using technology to its best abilities. The other thing is that, if we do not use e-commerce now, we will not be able to future-proof the Scottish economy. For example, if the money that is spent in high streets just now circulates within the local economy and you buy things in the high street, that money does not go anywhere. Scotland is just as likely to buy online as anyone else in the UK, but it is much less likely to sell online. We do not even know how many e-commerce businesses there are, we do not collect statistics, we do not know who the biggest are, but what we do know is that, if we do not have a thriving e-commerce sector here, that money will just flow into the hubs in Manchester and London, where they are building fantastic e-commerce businesses around airports and transport links down there. We have heard the HUC group say that it was going to employ 10,000 e-commerce skilled people. Those people are hard to find and are hard to retain in Scotland. If we do not get into the skills business now, if we do go independent, for example, that money will just flow out of the Scottish economy. There is no way of keeping it here, because e-commerce does not respect borders. That is something that worries me as a business person, that we have this fantastic opportunity, but if we do not take it, we have potential real detriment to the Scottish economy as I see it. I will obviously say that e-commerce and enablers and skills and so on is going to be a big topic that other people, as I suspect, will come in. However, just to finish off this piece of around women-led businesses, my second question was, in addition to those areas that we have already highlighted, given that this is quite a generic town centres inquiry, any other ideas about what we need to do to put women-led businesses at the heart of town centre redevelopment, which I appreciate is a hard question to ask you guys, given that is not your specialism, but just any other ideas before we can move on. I would like to say that absolutely the design of town centres is crucial to this. I would argue that town centres are in part declining simply because they have failed to respond to women's needs as well as other retail outlets have. Important points for women are safety. Women need to feel safe when they are going into town centres. Issues such as inadequate signage for example, poor toilet facilities, poor transport connections are all combined to make women feel unsafe. In fact, I was looking just to see what research had been done recently. What I can tell you is that the UK did not make the top 10 of the safest countries in the world for women, so we are not on the top 10. Looking at research that has been done in terms of women's perceptions of town centres, Cleveland police did a study in the wake of the Sarah Everard murder and the Safer Streets campaign. What the police in Cleveland found from their survey is a whopping 80 per cent. Over 80 per cent of women fell unsafe in Teeside and that was in 2021. That is right here in our doorstep in the UK. Issues that were being cited were poor lighting, poor parks, poor, poorly lit areas. Women fell unsafe exercising in those areas and they fell unsafe because of the presence of substance misuses, beggars and men staring at them were some of the key reasons that were given. In this day and age, I think that it is pretty shocking that we have women reporting. Over 80 per cent of them feel unsafe in those areas. What is needed is a clear strategy that harnesses women, that puts women at the heart of these urban areas regeneration, because we have a real opportunity to create towns and centres to redevelop them in partnership with other agencies, businesses coming together, but also other agencies like housing and also potentially tourism to meet these destinations of choice. Destinations of choice for everybody in our population, especially destinations of choice for women and families and significant rework needs to be done to the design of our city centres and our urban areas in order to engage women, particularly now, as we come out of Covid and the pandemic. Some of the issues that you have raised will be discussed at a future meeting. I will now come to Gordon MacDonald, followed by Colin Beattie. Can I ask witnesses to be concise in their replies and we will try to get through as much business as possible this morning? During the pandemic, online retail sales reached a share of sales high of 37 per cent in February 2021. I was just wondering, Peter, if you were able to highlight whether that growth in retail sales, whether there were some sectors benefitted more than others and whether it was large retailers that benefitted or small retailers or a mix? It was all kinds of businesses gained and the drop that we've seen over the last six months has simply been the mirror reflection of the significant increase that took place at the start of the pandemic. If you take out the blip while everybody was stuck at home, it's just business as normal, it's just continued in the same sort of directional trend and we're sort of on track for one-third of retail to become mediated by online. I just wanted to pick up on some things that Carolyn said. I was on Sockie Hall Street a week ago. I just hung my head. We just felt uncomfortable, nervous. I've never seen Sockie Hall Street look so dismal and so bad. It's something that needs to be a serious wake-up call. I couldn't believe how grubby, dirty, uncomfortable it was and I can fully understand why a lot of people wouldn't want to go shopping there. Given that it is inevitable that there will be a reduced number of high street shops, we need to decide that so that you don't have every other shop is empty, we need to consolidate shopping areas so that you've got, if someone's going to an area you don't want to see bordered up windows, you want to make sure that all of those shops are full and vibrant and very often the reason that people are there is because they found their products through searching online, which is the modern shop window to high street retail, but they're just not doing it. You said that we're on track to hit a third of online sales being online. Currently the ONS figures that came out has it down at 25 per cent from the 37 per cent high. When do you see that growth hitting 33 per cent? Remember, before the pandemic hit it was 19. It's just business is normal. There's no great shift. People are going to continue to make use of online mechanisms for sourcing products and for trading. The sad fact and the big elephant in the room here is that Scotland is seriously underperforming in e-commerce with the worst part of the UK for online trade and we have 8 per cent of the population and 1.9 per cent of the e-commerce jobs. The key reason why I think Scotland has underperformed is that at all levels we've not provided the right kind of skills training. This is a business ownership, at investments, at e-commerce manager, at specialist skills and at junior skills. One of the key reasons why that skill set has been not sufficient is because it's not been provided by hands-on practitioners. It's been provided within the agencies. That's my personal view. You touched on the role of the agencies. Skills Development Scotland's got a national transition training fund that's supposed to help. They announced in November that it'll help up to 20,000 people with digital technology. Will that start to address the issue that you're filing? They have just launched an e-commerce training scheme that was where the agenda for the course was put together by the colleges and it was aimed at unemployed people and across all three colleges they got precisely zero people applying to go on the course, which is the exact opposite of what Caroline found when you start engaging with hands-on practitioners who know and understand the subject. There has to be an engagement by the agencies in the industrial sector and the business sector that actually provide these competences and want to see them more broadly used within Scotland. It's failed so far. Stuart, how do we encourage Peter to highlight 98 per cent of companies who don't engage online? You talked about Chisholm Hunter. I found another example of Finra clothing that's had 40 per cent year-on-year growth and has opened another shop in Edinburgh. How do we get that message across to small businesses, private businesses, that the way forward is online? The latest Scottish Government digital economy survey revealed that 35 per cent of Scottish businesses were trading online. I would highlight the figures that I mentioned earlier about the shift that we saw during the pandemic and the need to cement those gains. I think that I would highlight again that Cary highlighted some issues with the digital boost development grant. I would say that that's an argument for it to further expand the programme. I know that 100 million has been committed to that programme already. I think that that co-investment grant model is a good opportunity to use that as a mechanism to get more businesses engaged with the enterprise support that's on offer. The same Scottish Government survey reveals only a fifth of Scottish businesses that believe that they've got all the digital skills that they need. What we need to do to solve that problem is to try and better connect Scotland's business community with our educational providers, whether that's colleges, universities or private providers. To a certain extent, that's a question of incentives and getting those incentives right. However, there's another factor here, which I think is just the marketing and trying to make sure that the courses, the training that's on offer from our education system really meets the needs of business owners and especially small business owners that might have different needs to larger companies who can, for instance, allow staff to be offered longer periods of time. When I said 98 per cent, I'm saying that 98 per cent of small high street retailers do not use those free and simple tools that would allow them to upload their inventory, their product catalogs to find. You don't need to have an e-commerce platform. Google provides you free and easy use and nobody knows about it and nobody teaches it and the skills are not taught by anybody. Caroline, if you get anything to add, how do you encourage people to take up this opportunity? I just want to briefly say that I'm a chartered banker, so I like nothing better than leveraging resources as much as you possibly can. To me, that's what we're failing to do. We are not connecting up well between the agencies and between the communities of interest, so there's a great example of an initiative that could have been super and hasn't worked. What we need to be better at doing is connecting up the pipeline of resources that we've got, because some of those resources are very good. There's some basic free training, for example, through business gateway that is helpful. We need to connect up that pipeline with the gaps in that training and with the communities where those businesses are. Pete's talked about the engagement with expert practitioners. We see that. Women will go to where there is low cost or free training. Women do not have resources to spend on this to get started, so they will go to those communities, those trusted places, they will congregate there and you can target and deliver through harnessing those communities. What we tend to see is that those initiatives are delivered in silos, they do not connect up with communities like ourselves. I hope that the example of the stair grant evidence is beyond any doubt that the appetite is there. What we are not doing is curating the engagement. We need to get better at curating the agency's engagement with the communities where the businesses are and just connecting up that pipeline. It isn't actually that difficult to do. Then we could see more results like the pilot schemes that we've seen. As an organisation, I've now had 400 nod businesses engaging. I need to find a way to try to keep that going, because we have now created a demand for that. I am actively looking for partners to come and help me with the community that we've created, and I want to keep curating that I see could have a huge economic impact here. I would like to expand a little bit on what Peter was talking about earlier on in terms of developing digital services. What level of collaboration, if any, is there between Scottish universities and colleges and the retail businesses in developing digital services? Nothing that I'm aware of. Nothing at all? There probably is somewhere, but I'm not aware of it. I'm pretty well placed to know if there was something going on. For instance, two years ago, we ran an advanced course for e-commerce managers at Strathclyde Business School, but it was delivered by a company, and that was delivered by InDes, but it was not delivered by the academics. The whole problem here is that if you're looking for e-commerce skills, where you shouldn't start is with the colleges and universities, because anybody who had significant skills in e-commerce would have probably left to set up an e-commerce business. The thing is that the practitioners, the people who know what's going on, the people who know where all the trip up points are, what tools you should be using, what the best practices are, what the cheapest, quickest ways to get your e-commerce business running are with the hands-on practitioners, and they're largely sidelined because the delivery mechanisms sit within the agencies. Assuming that you agree with Peter's statement there that there's no collaboration at the moment, is there any way that collaboration can be put in place? What would it look like? And how practical is it to expect practitioners to take time out from their business to train people coming up? I would gently disagree with Peter. I do know that there are several initiatives by colleges and universities in Scotland in relation to digital skills in the rounds, perhaps not the specialist e-commerce type training and education that Pete's describing. There's also other initiatives out there at the moment like the help to grow digital initiative led by the UK Government and universities in Scotland. So there are initiatives in the pipeline. How joined up are they? I think it would be fair to say that there's a question of scale for if this is an economy-wide problem and the bulk of businesses or the bulk of retailers, shall we say, for the purposes of this inquiry are going to upskill and reskill both the business owner and their staff, then we're probably going to have to massively increase the amount of training and support that's on offer. The question then becomes how do you reach the business community and especially the small business community, which at times can be very difficult to reach? While organisations like WES and FSB can play a key role, there's also a question about ensuring that the money perhaps provided through the funding councils to universities and colleges is perhaps shaped in such a way to encourage them to provide training and courses that are used by the business communities to try and shape those incentives so that they're providing the help that businesses want. I guess the impression I got from what you described various initiatives, that they didn't seem to be terribly joined up. They seem to be individual initiatives, which have been launched for very good reasons, but if you're looking across the piece at the retail businesses and then what offerings come from the colleges and universities, it doesn't sound terribly strong. I know that Colleges Scotland, for example, did some work in this area recently and we're trying to develop a more cohesive and comprehensive report. I can say that I have a global picture of who's doing what. I couldn't say at this time 50 per cent of Colleges, but my impression is that it's really been at the discretion of individual educational providers. Peter, do you want to come back in? Luke, you can't get away from the fact that e-commerce involves technology. When small businesses want to find out how they can increase their sales, how they can get more profit through their own business, they need to know specific skills such as how do I set up Google Merchant Centre, how do I set up an inventory feed, what type of photographs do I need and what format should they be in and how do I upload them and how long will it take and how much is it going to cost. These are the kind of technical business questions that small businesses want to know and none of these initiatives that I've heard about offered within the colleges and the usual infrastructure for further and higher education provide this kind of information. The only people who have access to all of the details of this lie within the hands-on practitioners who are always expected to give their time and their effort for free. Gillian, can I maybe bring you in? What's your impression of the level of support for developing digital services? I was lucky enough to be on the course that Pete spoke about, which was a useful course. One of the most useful things about it was that we were able to create community of e-commerce people out of it. That has been a WhatsApp group, which has been really helpful. We are senior e-commerce managers and we now can share information. Before that, we didn't really know each other existed. The real need to bring a community together in the e-commerce space is that lots and lots of people who are super willing to give their time for free have to be said. There are some brilliant e-commerce managers in Scotland. I'm thinking about someone like Jason Stewart at Donald Russell, the online future, a brilliant brilliant e-commerce manager who's coming at the bit to see if he can help to bring other people on. There isn't a forum for him to do that yet. I've been lucky because I've been able to work with Carrie and Pete to do a bit of training, and that's been very satisfying. The big issue here is that it's not static. That's the problem. Things move so quickly in the world of e-commerce and in the fields of e-commerce and in your own business. E-commerce is where technology and psychology meet, if you know what I mean. You have to have a wide range of skills to do it well. You have a lot of levers that you can pull. You've got paid traffic, you've got unpaid traffic, you've got SEO, you've got offline and online PR and all the rest of it. You've got influencers, you've got Instagram, you've got social. At any time, any one of these can change or suddenly the rules change or suddenly the best practice changes or the way the consumer is buying changes. You can't wait for six months for somebody in a course to tell you that that's what's happened. You need to be on it right then because if your e-commerce sales start to go, they can go really quickly. You've got to find a way of moving the dial and finding another lever to pull. It is quite a complicated business in lots of different ways just because there are so many elements to it and it's so fast-moving and fast-changing. That is fantastic. That's just so exciting because you have the whole world as your potential marketplace. We're selling into America, we're selling on Etsy. People that we could never have reached in any other way are finding our products and loving our products. We have a real community, so we're actually selling quite a traditional product in a very cutting-edge way, but we're still managing to keep a very traditional consumer-customer relationship with our customers but just using technology. That's at the heart of this, just how fast-moving it is and how important having a community of people who are doing the same things that can tell you what they're doing, what's worked, what hasn't worked, what they're paying for things. There's a lot of lack of transparency in some of the apps, so you find that even what you're paying for transaction fees on processing your payments through a different merchant provider, all that sort of stuff is absolutely gold dust to a small business like ours. We don't have huge resources to spend in this area, but there's so much enthusiasm in Scotland within the community that there's a real willingness to share, but it's just finding a mechanism to do it and finding a way of keeping that community and bringing more people into that community, some kind of forum going, I think. I might have to make some progress, we are quite free to retain. Maggie Chapman is forward by Fiona Heslund. Thanks very much, Claire. Good morning to the panel, thank you for being here. Following on from Colin's questioning around skills and training, looking at it from within retail, within businesses themselves, Peter and Carolyn, you've both talked about the lack of skills within there, but the digital economy business survey highlighted that only 50 per cent of businesses seem to have any interesting training their own team. How can we shift that? What is it that we need to do with that? And I suppose linked to that is one of the barriers or one of the things that's slowing things down, a lack of the adequate infrastructure on our high streets, access to the digital infrastructure that businesses and wholesale providers need. Carolyn, I'll come to you first. Okay, thanks very much. Well, of course we should start. I chair of the board of the Productivity Institute in Scotland. In terms of the 50 per cent interest and engagement, I'd like to pick up on that, because we just published our green paper at the end of last year. In fact, digital investment is one of the areas that we are going to look at and analyse. I hope that using some of the data that has been created by all the work that the Government has delivered so far, for example around digital boost, we have a huge data set there that can help inform us on best practice and can then help to share back that best practice with the community. So important to say that, hopefully, some information will come that will help to inform and direct future investment, because I think that insight is actually lacking and 50 per cent is a huge amount, isn't it? The other area that we see as a key issue that relates to this is leadership. Leadership is a key interface with digital and skills and actually progressing that. What we hear from a lot of leaders is the nervousness around engaging with digital. It is a constantly changing environment. At what point do you pick up? Where do you intervene? Who can help you to get a lens on your business and tell you with confidence and clarity where you need to invest? One of the key worrying statistics that I have seen is that around 50 per cent of investment in digital made by businesses is deemed to not have worked. That is whooping, isn't it, in terms of economic impact and opportunity mist. We need to get much better insight into what is working so that we can help to inform businesses. The good news is that we have mechanisms to reach businesses and communities. I have talked about the work that we do with WES, but also SCDI run regional productivity clubs. They are out there regionally in local communities working with businesses that are interested in boosting their productivity and are particularly interested in developing their digital footprint. There are some good case studies from businesses that have been successful, but there is no doubt about it. There is a phenomenal amount of work to be done. We need to support our leaders to invest in skills to showcase best practice. An example from my work at WES is that, during the pandemic, we took on an entry role at a young intern. After six months with us, she went off and got her dream job working for Penguin Boots in London. We took on a second intern, a young woman who was really interested in policy and policy work. We have just developed a large digital platform, the Women's Business Centre, and we brought Katie, her new intern, and trained her in that digital work. Six months on, she has just resigned. She is now off to work for a tech scaler. It is in the top 10 in the times list of scale-up companies based in London, and she is going in to work in a search engine optimisation role after just six months of working with us on our digital platform. Imagine what we could do if we were able to replicate that. We are a small business. My budget is referred to by my staff as 20 pence and two Snickers bars, and they are not far wrong. If we can manage to do something like this, I feel that this is very relatable for other small and micro businesses in terms of a route to bring in and develop young people and to develop skill sets. The training that we have delivered is largely founded on the three tools that are out there that we are shamelessly mining and capitalising on for our digital platform. Thanks, Peter. Do you want to come? Just a useful little snippet statistic. The largest study that has been done shows that e-commerce is 17 per cent greener in terms of its footprint than traditional retail. It is just efficient use of journey time. I can see the point that you are getting at. What can be done to try to improve things? A good starting point would be if politicians and governments could talk about this subject a little bit more from the industry perspective, unbiased. We will live in our own little silo and bubble. I live in a world that is full of technology and business, and I look at politicians as a group. I do not see the same shared space around this total focus around business and technology and that synthesis of the two. If politicians could just talk about e-commerce a bit more, that might help to move the dial. It is so huge. O&S statistics has mentioned £680 billion. It is massive. There is not an SQA qualification for it in Scotland. The subject is not taught very well. How do we move the dial? Doing something to promote the few fantastic businesses and case studies that we have here in Scotland. Believe me, there is nothing that would give me greater pleasure than to see an army of Scottish businesses going out and helping to create wealth, high-paid jobs. There is a focus by the agencies around exporting where we need to export to is the rest of the UK to start with. It is difficult to export beyond that because of all the other problems that there are. All the low-hanging fruit is just selling more within the UK doing more of this. We need fantastic case studies that can inspire businesses and business owners to get on board this e-commerce train and start doing something about it. This is a story that has been coming out from business year after year after year and nothing gets done. I do not know why. Is it simply because on this side of the room with people who have got their heads around and understand technology and business and how the two can be fantastic for creating advanced first world countries with well-paid jobs and everything? Or are we going to sit 100-year-old technology just working on the high street in the same old ways that used to be done? I will bring Stuart in on that as well and the question around infrastructure and what your members are telling you about what is there and not. Yes, absolutely. My heart absolutely sinks when I read that statistic in the Scottish Government report. It is a fairly frightening figure. I understand that this is not just a technology problem or a digital problem. The amount that we are doing in terms of upskilling existing staff is not good enough. We need to change that culture. I would return to the point that we have a really good product in the digital boost grant and there is an opportunity through the better integration of our enterprise networks and maybe our skills bodies that there is an opportunity to say that you are getting this grant. Have you thought about training up your staff to use this new technology that you are getting in here? Here is your programme of support in the future. We have seen the codeclan model as a success, but that is a very high-end product. Could we replicate a similar vocational training course but for a different skill set? Is there an opportunity there to look at that success story and say that that work lets do more of that? In relation to digital infrastructure, the official stats show that broadband and mobile coverage is improving in Scotland. It is not quite reaching the political ambitions that we would like to see. I would particularly highlight 4G coverage as an on-going problem. I sit on the Scottish Government's 4G infill programme as an adviser, but I would say that there is still a huge amount that we need to do there, especially because things such as cashless payment technologies are relying on digital decent infrastructure. I would say that there is currently a focus on speed and reliability, which is often a much more important factor for many of our members out there. At the moment, the telecoms market, the products that are out there, from our perspective, do not seem to be a wide enough diversity of products that are out there in comparison to the wide range of businesses that are out there with different needs. There are some very interesting insights. Some of them are actually contradictory between yourselves, which I think is also fascinating. I am not sure that most attacking politicians for talking about e-commerce in a committee that is looking at e-commerce is necessary. I welcome it. I just want more of it. I was interested in what Caroline McLean was saying about creating a community of interests. I am very short. I had a brief year spell as economy secretary during a pandemic and introduced the digital boost programme, which we again had to massively increase. I think that there are some general issues about the lack of businesses investing in skills that are historic. I think that there has historically been a lack of demand for digital from businesses, but the pandemic absolutely accelerated it. I think that there is something about who does this, who does the creating, how do we implement this and how do we make the step changes that are needed? Ten centres are going to have to be both physical and e-commerce. That is a given, so I will reassure you on that. Julian McLean, you talked about going to Strathclyde to do a course with Peter. Was that Strathclyde University that you were talking about? Sorry, Julian, you are on your own. That was the business school, Strathclyde University business school. Out of that, there was about a group of 20 of us, and Peter is part of that, who still keep up with each other and share knowledge, which has been really helpful. I know that, pre-pandemic, the Scottish Tourism Alliance worked to stimulate demand, but to try to get tourism businesses to embrace e-commerce. It was done by almost a town roadshow, because it was by town. We are looking at town centres. I suppose that there are different models of how we get that curation that Caroline was talking about. You can see it absolutely for women. Is there something physical about towns, whether chambers of commerce could curate it or e-commerce? How can we do it to help our town centres and the retailers in our town centres? Have you got in your head what that model would look like? Who delivers it? The whole point of digital boost is to provide grants that you can get practitioners to help. That was the whole point of it—commercial, et cetera. How do you think that it should be delivered? What is the role of the agencies, if anything, apart from delivering funding? That is a really good question. I think that your analogy around tourism is a really good one, because all my experience is that the various tourism bodies have done a brilliant job in putting Scotland on the map and connecting local areas and boosting tourism within local areas. That is a very good model, and we could look to that. Although e-commerce is very much part of the town centre story, a really good model is the shoe retailer. My local shoe in Stirling has a shop, which is one of the few busy shops in Stirling, but upstairs it has three people who are packing e-commerce orders. There is this real productivity thing that Caroline mentioned. If you are a shop, you have lots of dead time during the day when people are at work and they are coming to the shop. If you can have that dual model within your shop where you have an e-commerce station, it does not take up a lot of space. You can pack an e-commerce parcel in the same way as you would pack a parcel for a customer coming in the door. You have staff who can be used doing e-commerce work from a central computer at the same time as serving customers and doing the busy times to serve the customers and doing the quiet times to do e-commerce. That is a really productive model, and that is already happening on our high streets with shoe. In terms of who delivers it, it has to be the most enthusiastic people. That is part of the problem. You know yourself that if you have enthusiastic go-getting fantastic people delivering something, it will spread like chicken pox in the nursery and everyone will want a bit of it, and it is fantastic. However, if you say that it has to be ex-agency, there can be such a variation in knowledge, skills and ability to deliver. You really need that to be almost like a grassroots movement in which you give them the funding and the ability to get together. I have found a lot of the beneficial stuff in the peer-to-peer space, and you need people who know what they are doing. You need experts who have done it before and bigger companies who are doing it. However, every company is different. There is no one model that will fit everything. Whenever I am talking to other e-commerce companies, I am also very conscious to say that this worked for us and it worked for us in this context and in this time. It might be slightly different for you. Everyone is coming with a different platform. Everyone is coming with a different e-commerce experience, digital experience or different barriers to psychological barriers to digital. It cannot just be a one-size-fits-all. It really has to be quite tailored. It is not a supermodious thing. If you have got enthusiastic people in your community that you can really get going with this, you have got e-commerce champions in every town centre and community. That is the other thing. Digital loves local. We have not mentioned that enough. Google loves local. Google will boost local businesses through Go My Business. Facebook loves local. It is really wanting local. There are a lot of the big players who are really willing to back local. I would say that we are bringing in some of the big players. We are very scared of these companies. We engage with the heads of senior people in Google and senior people in e-commerce. Those people are willing—they really want to try to boost e-commerce in Scotland, but they do not have a conduit for that. I would say that it would be great if Scottish Enterprise or whoever at least has access to these senior people in the UK, in these big companies that really have a lot of input into e-commerce, such as Google and Facebook. That would be a conduit to start with. We then have a route and a way of getting some of the big players involved. You need it grassroots. You need it coming from both ends. You need the Scottish Government and the agencies that work for the Scottish Government to facilitate that, whether that is not necessarily in money. I was a recipient of the digital boost. I would like to say thank you very much. It was a great thing for my business. It was perfect, but it was one of the best grants that were out there. Most grants I would not look at because they might have time and effort. The conditions of the grant means that it is not going to be beneficial to us, but digital boost was really good for us. It made a massive difference at the time that we got it. I am conscious of the time. Caroline, the registration of the digital boost was to stop massive fraud that we have seen for pandemic funds in other places. That does need to be looked at. There is something about what Stuart was saying about how to develop it into a better product. That curation—women are 52 per cent of the population in terms of under-represented business, but it is Scotland-wide. Listening to what Gillian was saying there, perhaps we need to localise it more. Some of the packages are there, they are free and we want the practitioners. Who does the curation and how do we do it on the platform? It is a blended initiative. Where we are able to do that, it really works well. In its simplest form, it is harnessing what each organisation does well and creating that together in a space. I have talked about women's business centres. A similar analogy could be an e-commerce space. It could be a space to bring people in that different communities could use. Sometimes a one-size-fits-all works for some people, for others it does not. Thinking about the learnings that we have had from the events that we curated, some businesses welcomed the idiot's guide to start it up. It is a complex area. It is highly complex and detailed. That is really off-puting for people. If you are sitting in an environment where people understand the different terminologies and the vast array of Google dashboards that you can tap into, if you are able to curate that with different communities—I am one community, I would argue absolutely a space where women can come—we can curate that with the businesses that we have a reach to. We can then help that community to develop and grow. As Gillian said, as communities develop and grow, they build a much better sense of what they need and what they want, whereas at the start they do not necessarily have that confidence. However, if you can bring like-minded people together that have the same needs—it is like any new product development, is it not? The better you target their needs, the more impactful you will get for a return. That is what I would advocate is worth trying. Trying to bring together that pipeline model of support, the agencies have good contacts with generally larger and scale-up businesses. They can help curate those businesses and bring them together in a forum. I can help curate women-owned businesses, often micro-businesses, but not necessarily in the world of e-commerce. Our businesses are out there with significant turnovers that we are not tapping into—nobody knows exists—that are not hitched up arguably to some of our scale-up agencies and resources out there. That is a two-way path in which we could really better leverage all our respective resources in creating a collaborative model that would boost e-commerce and our national productivity. The only other thing that I want to say is that there are sectors out there that are growing massively that women are represented in and that are not supported and e-commerce could be the route to supporting women in those sectors. Health, beauty, wellbeing—massive, multi-billion pound sectors—we have huge opportunities and we could use e-commerce to start to tap into that because our national infrastructure does not help with that. As I think Pete originally said, if you turn up in retail, you are not going to be welcomed with open arms and a plethora of resources, sadly, with the way that our economic development works at the moment, but here is a route where we could curate it better. I am conscious that the convener might cut us off, but I think that Pete is very rich. Hopefully, just really quick points. I so agree with everything that Caroline said here. One vehicle for this kind of work is small e-commerce business clubs. We have a very successful one in Central Belt of Scotland. We need to maybe engage with some of the agencies that are connected to support mechanisms to try and encourage people to come along because none of these clubs are ever advertised on any of the agency sites because we are not funded by them, so they do not advertise them. They could easily. That is the first one. The second one is that we have talked about all these different—what is the best way to provide skills training? Rather than force feed through a college or a university, why cannot you offer training vouchers to companies and let the market vote with its feet? If you have good inspirational leaders who have products bubbled to the top on e-commerce sites because they get great feedback, people really like them. If only the skills training could be moved to being a voucher based, then, as Gillian's point, people will go to a local supplier who is relevant to them. Why on earth can't we do this? We have seen some of this through bids in Scotland. Bids had a key role during the pandemic, as well as often organising food deliveries locally to vulnerable customers. I thought that that was a really good initiative that could be built upon. The key thing here is that, no matter who your initial contact is with, they do not lead you to other agencies and other bits of support in the public and private ecosystem. I would like to make a general point about town centres and high streets and independent businesses. The past few years, I have seen that independent businesses do a lot of heavy lifting on our high streets and in our town centres, but they cannot do it on their own. I know that e-commerce might seem to be part of the solution for a long-term future for local shops, but we also need to see that big business and the public sector play a bigger role in the centres of our local places. We need to see more local facilities in our town centres, whether that is council run or through the blue light services or through parts of the NHS. We need to see organisations like the banks can reconsider getting back into the centre of our local places. We talked about Salkiol Street, but up and down Scotland, there are ugly gap sites, so we need to make them more suitable for our wider range of public and private bodies. Alexander Burnett, who is on the online platform. Thank you, convener. I know that we are pushed for time, so maybe I'll just direct my question to Stuart, as he has stood across and represented online and bricks and water businesses. In previous sessions, we have heard about an online or digital sales tax being mooted. I wonder what your views are on that. If you are in favour of it, do you have any idea of what level it might be set at and any issues and things that might arise from it? I am aware that the UK Government is consulting on an online sales tax right at this moment, and it is fair to say that we are pretty anxious about that. Principally, we heard earlier that a third of Scottish businesses now sell some sort of good and service online. One in seven Scottish businesses started selling online for the first time during the pandemic. We would hate to see businesses which diversified during the last two years having to be hammered by a new online sales tax. We would accept that there is real anxieties about some big online giants, but our concern is that the damage an online sales tax would do, would outweigh any benefit that local traditional operators or businesses trading both online and on bricks and waters would receive. I think that the UK Government proposals are in relation to business rates, but the amount that is suggested that it will raise is unlikely to make a significant dent in the business rates income. Broadly, we do not yet know what direction either the UK Government will go or I believe that the Scottish Government has a commitment to look at an online sales tax too, but at present we are more nervous that it would harm more of our members than to do more good to the Scottish economy. I am sure that a subject will be revisited in the future. The language of her is a level playing field. As you identify, there are the big giants who are online retailers who have been seen as drawing business away from high streets and bricks and waters. Are we in a more mixed, is it the wrong time to introduce it, a more mixed phase of retail where we are trying to encourage those who are on high streets to use more online sales? Is there a role for people who are just online sales groups only that they should get taxed and have an equivalent feed-in to the terms of taxes? Is that what bricks and water businesses do? If you are going to pursue an online sales tax, I would say that there is a fairly strong argument for a small business exemption. Even then, there are questions about what sorts of transactions would be covered by the tax, whether B2B transactions, for example, would be included. There is a question when we saw the digital services tax introduced. We saw a lot of the online giants despite it being targeted towards the biggest guys, passing it on to their smaller customers. There is a question about who pays even if it is a tax that is targeted towards the biggest operators. I would say that if we are talking about levelling the playing field, there is a strong case for rejecting new out-of-town developments at this stage, given that we are seeing a pie of bricks and water shopping decreasing. If there is going to be fewer in-person transactions, we probably want them to take place in our centres not just because of our net-zero aspirations but also to help out the other existing businesses. One other angle to levelling the playing field that was in our report that FSB did a few years ago was that when this Parliament considers new rules on business, it is going to be really important that it considers both traditional operators and online operators. Looking forward to our net-zero ambitions, when we consider, for example, new rules on waste, it will be really important to consider how traditional shops will get on with those rules and online operators. That is why we have suggested that consideration of the digital economy should be part of future breas or business regulatory impact assessments in the future. Just finally, Gillian talked about the example of Shoe, who is combining their retail with online sales. The committee is looking at town centres. We are interested in the places where people live, work and socialise. The move to online sales affects the fabric of high streets. What would be the way forward on that? Is it that combined model that Gillian and our businesses are moving towards that? Is there barriers to doing that? Is there a reason for that? I think that we heard from in Dumfries a big retailer who moved from having a physical shop who then moved to a locker, and there was advantages in having a locker-type system. How do we encourage businesses to remain on the high street and deliver to services from the same place? It is probably going to be great if you are Shoe and you have a spare floor upstairs, and businesses to operate from smaller units will find that more tricky. There is also anecdotally from our members issues with things like access if you are getting a lot of deliveries or taking a lot of deliveries away from a high street premises. It is easier for some businesses than others to run both an e-commerce business and a physical shop from the same premises, because they are designed for different purposes. It is not impossible, but there are challenges along the way. I would say that if businesses are going to need different premises for running a combined e-commerce and shop-type business, we need Scotland's commercial property market to be adaptive to their needs. One thing that the UK Government has done recently is to launch a review into the legislative and regulatory framework that governs the landlord and tenant relationship, and that would be a useful thing for the Scottish Government to do as well. Our view is that if you look up and down high streets across Scotland, there are many empty units, but the price of occupying those units does not seem to be falling, and that suggests that the property market is not working as it should. That has a range of negative consequences, and it should be cheap to take up units on the high street, and it is not. We need to ask why that is at this time. I thank all four witnesses for their contributions this morning, and I now briefly suspend while we change over the panel. I welcome our second panel this morning. We are joined by Neil Francis, managing director, along with Siobhan McDermott, who is the team leader of digital trade services, both from Scottish Development International and is joined by Hugh Lightbody, chief officer and business gateway. As before, if members and witnesses could keep their answers as short and concise as possible, all three will get a chance to answer some questions. You might not be called for each question, but you will get a chance to speak this morning. If I could maybe start. In the previous panel, we heard that, traditionally, business gateway would not offer support for retail. It is not a sector that is prioritised. During the pandemic, there was obviously more support coming through the Scottish Government that went through local agencies, whether in terms of business rates support in particular for retail. As we are looking at the change in nature of retail, would you see any future role for business gateway or local agencies, given more support and having more engagement with the retail sector? Hugh, would you like to come in? I am happy to respond to that. In actual fact, the previous panel is incorrect in its response. Business gateway actually does support retail sector. Something like 9 per cent of the startups that we supported last year were retail and around 7 per cent of digital boost clients last year were retail. We actually do support the retail sector. Has that been a recent increase or has that traditionally been less of an engagement? No. Retail has always been a sector that we have supported from the moment that the local authorities took on responsibility for the business gateway service in 2008. Can you reflect on how you have seen the retail sector changing? What kind of support business gateway has provided? You mentioned the digital boost project. What kind of support you provide in that area, but how has the sector changed and the type of support that you offer has changed? I would say that our support has not changed. Obviously, as a service, we inherited the service in 2008 just at the point of the financial crisis. A significant proportion of our support at that point in time, and indeed ever since, has been about survival of businesses. Irrespective of the sector, it has been very much about survival. Something like 40 per cent of the businesses that we support indicate that the main benefit is survival of the business. Since 2008, what we have been about is that, as well as trying to support businesses to start up and establish businesses to grow, it has been very much about building resilience in those businesses, making them stronger, better businesses, trying to cope with the situations that we have had to face. The financial crisis has been one. The pandemic has been the most recent. If you look at the ONS figures for three years' survivability for start-ups, the ONS figures are 57 per cent. A start-up coming through business gateway is 77 per cent. You are about one third more likely to survive three years if business gateway has helped you to start a business than if we haven't, because we are baking in resilience from the get-go. I know that we are coming up to an election this week, so you might be some questions you are not as comfortable addressing. You do not have to mention places. Do you find there is variation across Scotland in terms of the support that business gateways are asked to provide to retail, or is it pretty much the same? It is consistent across the piece. The model of delivery varies from place to place, whether it is an in-house service or it is contracted, but the support is the same wherever you are. There is a consistency there. What I meant was that the demand for the support is the same, or is that areas in Scotland where it is stronger or does it vary? I do not have the detail on that. I am afraid that I could not comment on that. That is no problem. I will hand over to Maggie Chapman. Thank you very much. Following on from that line of questioning, from Clare Hugh, you said that 7 per cent of the support that you offered last year through digital boost was to the retail sector. Can you tell us a little bit more about that and a little bit about some of the challenges that the retail sector maybe brought to you as you were supporting them through digital boost? I have a couple of follow-ups, but if I can start with that, thanks. The kind of support that we are offering through the digital boost programme, and it is perhaps useful to draw a wee distinction here, digital boost is something that we have been delivering for seven years now. What that came out of was that once upon a time we had the Digital Scotland business excellence partnership, which is a bit of a mouthful. What the various agencies and FSB and others sitting around that table were trying to do was to look at the digital situation that Scotland had. One of the things that informed that, and you in fact touched on it earlier, was that DEBs work that was done. There was a digital maturity index that showed back then that Scotland was not particularly digitally matured, and we needed to do something about it. The Government's digital strategy at the time said that Scottish Enterprise, Heinlein's Enterprise and the business gateway service should work together to develop a programme of support that was about increasing their capacity and the capability of Scottish SMEs to tackle the digital situation, to become more digitally savvy. That is what the digital boost programme became. That is what it is. More recently, what the Government has done through the digital boost grant is to use the brand to promote that grant, but the grant is something that is very much Scottish Government working with its contractor to deliver the grant. All that we are doing is using the name to promote that, because the brand is very well established. However, the kind of support that we are offering in the area that we are looking at here in relation to retail or indeed any sector in terms of e-commerce is that we have a webinar on online sales, improve, develop and make more money, as it is called. We also have various coaching sessions that we offer, such as selling on Amazon, how to sell your products on eBay, selling on Etsy—I know that Gillian mentioned that earlier on—how to integrate your online shop with Instagram and Facebook, selling online how to choose the right platform, because there are many different platforms, and selling your products on Shopify and WooCommerce. However, those are backed up by various other webinars and coaching sessions on, for example, how to build a digital marketing plan, paid for advertising, email marketing for business, how to set up an email marketing campaign and google my business how to create a profile on various others. We are offering a wide range of support that is helping businesses, not just retail businesses but any business, to become more digitally savvy and have the opportunity to trade online. Thank you very much. Given what we heard in the panel in the discussion earlier this morning, there seems to be a gap between the huge range of support that you are providing and the support that is being sought by retail businesses, whether they are bricks-based only or bricks-and-clicks-based. Do you have, as part of Business Gateway, any future plans to reach out to retail and other town centre businesses more explicitly, more directly, to enable them to access the support that you provide? Are there geographical areas that you have identified as areas where no support is at all that we should be aware of? I think that, again, coming back to the devs piece of work that you touched on earlier, the key message that is emerging from that and the most recent survey, the most recent dev survey, is showing what else there has been and what we are trying to do. We are trying to move businesses up the digital maturity curve and what that survey is telling us is that we have not advanced very far. Businesses are still reluctant, they are not picking up the opportunities necessarily. That maturity is not as evolved or developed yet as we might have wanted it to be. There is still work to be done there. In terms of what areas and what we want to look at, we have the new national strategy for economic transformation. There is a lot of work to be done around the whole concept and idea of regional economic partnerships. I think that a lot of that work still needs to be thought through, developed and the action plans that emerge from that as to where are the priorities? What are we trying to do again with any sector? What are the actions that we need to take to try and transform the economy over the next 10 years? Clearly, retail, town centre regeneration and all of that needs to be built into that. Before I bring in Gordon, I have a question to Neil and Siobhan. I asked initially about retail sector and business gateway. Can you say a bit about Scottish Development Scotland? What engagement do you have with Scottish Enterprise? What support do you provide to the retail sector in Scotland if it is an area that you work with at all? Neil, do you want to come in? I will come in. Thank you, convener. Just to help committee members about Scottish Development International, which is the international division of Scottish Enterprise. We are part of Scottish Enterprise, but our focus is on that international dimension. In terms of your question, convener, it is important that we continue, as Scottish Enterprise, to focus strongly on our purpose to help businesses to innovate and scale to transform the economy. We want to continue to work with businesses that are ambitious and want to grow and help to make the transformation to our economy that we would all like to see and that is set out in the end set that was launched a couple of months ago. In terms of retail sector, I think that traditionally people have always been very nervous about the public sector intervening to support that sector. It has been a bit of a blunt instrument and does not use a shorthand if I like. The important thing is to ensure that public resources do not go in to support one business to compete against another local business. Traditionally, one could argue that if one retailer was being supported, it would be to the disadvantage of another local retailer. The issue is understanding how you intervene in any sector to help that contribute to overall growth and not simply displace economic activity from one local business to another. What we know is that retail, as we have already heard today, is changing and is no longer what it used to be. Scottish Enterprise has previously supported Amazon and we have the development in my region. Onferman has had support before, which is retail. The argument is that we cannot support one retailer and that it might have an impact on another, but that does not hold for other sectors for any business that was in a competitive field. It does. I guess that it was not very clearly explaining that. It is considering what impact that particular business has and whether it is in a market that is growing and expanding rather than simply displacing an existing business. Traditionally, people have used retail as a way of saying that in retail there is a lot of local businesses that would be competing against each other. Your example about Amazon is, again, demonstrating that you have to be careful by putting everything together into one sector because it is really about what that business is trying to achieve, what market it is in and how best you can support that particular business. I will let Colin Smyth in on that question and then I will bring Gordon MacDonald in. Thank you very much, convener. Can I just follow up on that point with Mr Francis? What you effectively are saying is that the role of Scottish Enterprise in our town centres simply because of displacement and your focus is entirely on economic growth, rather than, for example, inclusive growth, means that there is not that support there for retail in our town centres. One of the messages that we are getting is that our town centres need to change, for example, more cultural facilities, those types of areas. Are you really saying that because of the remit of Scottish Enterprise, which may, for example, differ from Highlands and Islands Enterprise and the South of Scotland Enterprise, which has that social element, that you do not really see there being a role in supporting our high streets from Scottish Enterprise because of that remit that you have? That is a great question. I think that there are two separate bits to that. What we are all clearly in agreement about is that our town centres across Scotland are really important in terms of the economic fabric across the regions. What we know is that I guess that the pandemic has accelerated the change that was already happening. Finding a productive future for our town centres—a role that they can play both in the economy and in our communities—is really important. That is something that needs to be done. In terms of our role, it is also important that we are clear on our focus and purpose and that we are continuing to deliver that focus on those businesses that can innovate, those businesses that can scale and those businesses that can help to transform our economy. Thank you very much, convener. A lot of the questions that I was going to ask has actually been touched upon. I am still looking for some clarification on that. We have talked a lot about digital boost this morning and the grants of up to 50 per cent that Business Gateway has helped. I read the evidence from the British Independent Retailers Association who said that there was a requirement for a more co-ordinated collection of the support available—both private and public—that could be aimed to small micro-businesses to get and get them to get an e-commerce platform. I was wondering if you could highlight either through the Scottish Funding Portal what funding is available to the retail sector in order to take up the opportunity of having an online business? I do not have any information on what fundings are available. Business Gateway, as a service, generally does not do funding. We do not have grants or anything that we offer. The digital boost grant, as I said earlier, was a Scottish Government initiative run by the Scottish Government through its contractor. As a service, we can signpost people to funding, but it is not something that we deliver directly to ourselves. I think that you have possibly heard the previous witnesses where we were discussing about collaboration in terms of developing digital services. There seemed to be a different view on whether there was such training in any adequate form or whether it was, my words, a bit disjointed and sparse. Is there a role for Scotland's universities and colleges in boosting developing digital services with Scotland's retail businesses? And what role would the enterprise agencies play in that, given that you are already carrying out training functions? I am thinking here particularly, again referring back to the comments of the previous witnesses, where they did not seem to be recognising much of what you were doing. I think that that is obviously very much a question for Skills Development Scotland, who are doing a lot of work in the digital skills side and who have strong links with Scottish funding council and through them to the various universities and colleges out there. As I say, that is more a question for them in terms of what they are doing, but what we are doing collectively and collaboratively with Skills Development Scotland and with the other enterprise agencies. On the back of the enterprise and skills review, the last one that we had, we have created something called the business support partnership. The enterprise agencies ourselves, local government and Skills Development Scotland, Creative Scotland, Visit Scotland are all working together to tackle one of the key findings that come out of the enterprise and skills review, which is the cluttering confusion in the marketplace. What we are trying to do there is to collaborate, align, work together to ensure that what is being delivered is what the marketplace is looking for and decide who is best placed to deliver that so that we do not have duplication of services or what is going on. Within that, there is the opportunity and we are in discussion with colleagues across the enterprise agencies on the digital side of things. What are the kind of things that we need to be doing and who is best to deliver them? Business Gateway tends to be the service that is there for the volume market, for the micro enterprises, for the small businesses, and our colleagues in the enterprise agencies are picking up those businesses, as Niall has touched on, where there is perhaps the greater opportunity and the need for greater investment to actually realise those opportunities. It is that pipeline of support that we are collaboratively and collectively working our way through. To pick up on what Niall was saying earlier, it depends on the circumstances sometimes. Prior to South of Scotland Enterprise, when the region borders was covered by Scottish Enterprise, we had a local, very traditional ladies and gents outfitters, a retail business, where we argued successfully for additional support from Scottish Enterprise for the very reason that there was a growth opportunity, the displacement was not there. In that instance, it was supporting local supply chain providers of products and they were internationalising. Where the circumstances allow, there is support there for particular retail businesses. Niall, perhaps, since the finger has been pointed at you, you might like to come in and comment on that. Are we disjointed in our approach to developing digital services? It is a great question. I would support what you have said. Through finding business support, we have done a lot around ensuring that it is easy, comprehensive for customers to find out the support and services available in the digital arena, but across all the services that are provided to support businesses. Can we do more to make it even easier and better joined up? The answer to that is definitely. There is always room for improvement. It has been a long-standing piece of feedback that businesses have provided us collectively over many years about getting that joined up as best as possible. In addition to your question about the role universities and colleges can play, we know as a country that we need to improve digital skills in so many areas. The universities, colleges and schools have a critical role to embed that in all that they deliver. All our young people, as they move through the education system, are building foundational digital skills to a much higher level than we currently have, so they have a critical part of it. I also think that when it comes to specific technical or e-commerce or commercial digital skills, there is a role to be played by the private sector in delivering those into the marketplace and by the agencies. They are slightly different in their focus and what they are trying to achieve can be the type of skills that the universities and colleges can do for everyone. I will now bring in Michelle Thomson to come in. On some of the general themes, you will appreciate that the inquiry is very wide-ranging. I know that you listened to the earlier panel. One of the challenges that we have is to produce recommendations that add real resonance and meaning. Based on the earlier session, which I know that you listened to in today's session, are there, say, two top areas that you could pick out that we could recommend to be done? I know that it is rather generic, but this is so wide-ranging trying to pull it together. I appreciate your thoughts. I will couple off the top of your head if there were one or two things that we would do. What would they be? I would like everyone to answer that. Neil, you are smiling, so I will come to you first. Thank you. It is the first time that I have been asked what would be on top of my list, so it is great to have that opportunity. Part of the reason that we are here in terms of Scottish Development International is because of that international dimension. I think that what we see is the continuation of internationalising our economy is probably even more important today than it has ever been. What we have seen with the pandemic, Brexit, geopolitical, energy security and everything else is that the international landscape is so complex, so fast-moving, but ultimately what happens out there has an impact for us. The way that we navigate that landscape going forward will be incredibly important for our future economic prosperity and wellbeing. On top of my list is how do we support even more of our growth businesses to internationalise and use e-commerce as a mechanism of being able to penetrate new markets further afield? I will jump in. We did an impact analysis of the various programmes that were reported last summer, and I would turn to the recommendations that have emerged from that in terms of what I personally would like to see. Some of those things have been touched on earlier in your earlier session. The first thing was Strength and Coordination and Strategic Guidance Forum. I talked earlier about the Digital Scotland Business Excellence Partnership, a bit of a mouthful, that has disappeared. I think that it would be valuable to bring something of that nature back together again, because that is quite a few years ago now since we did that. We are getting back eight or ten years now, even since that happened. Let us sit round the table again and get all the players back round the table and talk about Dispeth again. That was touched on earlier. There is a need to raise awareness of the benefits of investing in digital technologies and services and of support available. We are raising awareness through the Business Gateway website, through the social media work that we do, that we have various very good case studies. We find that case studies are very useful in promoting things. Findra was talked about earlier, one of ours. Case studies are important, but raising awareness generally of the benefit of investing in digital, what the return on investment is and so on. There is a continued need for digital support programme funding. A three- or five-year funding cycle would be more helpful in that regard than annual funding rounds. Expanding offer to meet need, the demand is there, but one of the challenges, certainly more widely, within Business Gateway is that the money has not increased in the 14 years that local government has had to service. We are about 40 per cent below where we ought to be if we are keeping up with what is needed. That is a key one. What else have we got in there? There is a need to focus more resources on encouraging businesses to progress from what can be called entry-level digital technologies and services to more advanced systems. That is what I talked about earlier—that digital maturity curve. We have to remember that we have a business base out there that is not necessarily doing the things that we might want them to do. They might not have the ambition to do. They might be quite happy where they are, so we need to encourage them to think about taking on more opportunity. The last one is recommended that great investment is made up in an upfront audit and advice package. That is why we have the digital health check under digital boost to get businesses to have a think about what they need. That is why, in the last round of the digital boost grant, the Government introduced a digital implementation plan to get businesses to think about what they will do with the resource. I also recommend that the great investment is made in aftercare, modify future grant distribution process and invest in internal systems. I would ask more questions. You have given us so many, and all that you are doing is prompting further questions in me, which I am going to resist asking. I am aware that other people want to come in. Siobhan, you are top two, if you can limit it to that. I thank you very well to rhyme off a massive list. I would probably go more to the practical. On the previous session, we had Wes talking about agency engagement and curating the communities. I would like to see more of that. We would be very happy to work with Wes again if they have a pipeline of companies who are keen to learn more. We have our international e-commerce programme. We could create specific cohorts for those communities, so I would like to see more of that. Also, in addition, we previously had e-commerce clubs. We ran quite a number of them in Glasgow and Edinburgh in 2018-19 Covid pandemic, so that short shrift, obviously, we would like to reignite those e-commerce clubs because that is where you have those practitioners and people leading in e-commerce and leading in business talking about the benefits of sharing their stories and their warwinds and how they have recovered from some of those issues. I would like to see more of that. If I can make one last other point, I would like to see more priority made within businesses around designating e-commerce roles in their organisations. Many of the companies that we have worked with, we are seeing e-commerce as an add-on to the marketing team or even to business development or even sometimes to the finance specialist where they are also being tasked with looking at e-commerce for their business. It goes back to the whole point around skills development. Yes, absolutely, we need to be doing more around that, but it is also supporting the business and raising the awareness of the importance of having those designated roles to drive that part of the business forward. Thank you very much, convener. I will bring in Colin Smyth, who is followed by Alexander Smyth. Thank you very much, convener. My question is really around the team from SDI. It is really to ask what sectors and areas offer the best international opportunities when it comes to Scottish retailers and how can the support that you provide directly benefit our high streets, ensuring that some of those retailers are not in out-of-town developments, for example, but they are actually businesses that are based in our town centres? Do you want to ask Michelle Orneal? I do not mind. I will go with Siobhan just to help the cameras. I think that will make it easier. If we are looking at e-commerce in the round, how we would speak to a business who is approached in the retail sector with an inquiry about e-commerce, we would look at their business needs and digital footprint, for example. We would need a Google Knowledge panel, the panel on the right-hand side of our Google search results. When we search for a particular business, we would recommend that they have financial solutions in place to help with VAT and tax returns. We would also ensure that they were using free software, such as free agent, for example. We would also very much be dealing with them as we would with any other company, and we would be looking at the benefits of e-commerce, but we would be looking for them to develop a more robust digital marketing and e-commerce strategy, including development of an e-commerce website with the associated software tools to manage customers' orders and finance. There are examples out there of businesses who are in the retail sector and who are applying the good practice of e-commerce in their businesses today. We would encourage them to overlay that good practice in the high street, too. Is there a gap there at the moment? Retailers have been so used to the fruit fall being effectively people walking up the high street that they are maybe not aware of those opportunities. Do you detect that there is a gap there and there is an untapped resource, if you like, of businesses on high streets that could benefit more from that digital reach? I think that Gillian touched on it earlier on that most retail sales take place on the high street. She talked about bricks and clicks and e-commerce versus the high street, which I think that we should not even go down that road at all. I think that digital is such a fast-moving area. It is front of mind for all of us, particularly since the Covid pandemic recently. Businesses who are staying ahead of the curve are those who are adopting new digital technologies and adapting their business models. That is something that we would encourage businesses to do through our international e-commerce programmes. As far as retail goes, we would be certainly signposting those businesses to business gateway in the first instance for that support, because they are. Hugh talked about the wealth of support and the fundamental skills that are being delivered through business gateway. All of those things—digital marketing, understanding social media—can be adapted for the retail on the high street, but they just have to tap into those tools and support that are freely available. Just bringing in Neil now, is it realistic to think that we will have a team of businesses on our high streets reaching out to international markets from the back of the shop, if you like, to make up for the fact that they are not getting as many people coming in the front door of that shop? A steward in the previous panel and Gillian gave examples of where that can work and where it might not work because of access issues and space and what have you. I think that the starting point for all businesses is understanding what the businesses' overall growth strategy is. I think that it is really important that businesses take the time to think clearly about their future strategy rather than simply jumping on what might seem an easy solution. What Siobhan has highlighted is that it is actually quite complex and it is fast moving, and it requires capability, commitment and some level of investment. From an international perspective, it is that difference. On one hand, you can say that you are potentially accessing billions of customers, but as in the high street, there might be billions of people walking past your virtual shop and no one stopping in. I think that there needs to be some time taken to support the businesses to think through their international strategy. Which markets do they have products that work best for? Are there issues around product localisation, i.e. do you have to change your products in any shape or form to comply with what is demanded in that market and also with the regulations and legislative frameworks within that market? Are you going to look at platforms that are horizontal or are you going to look for platforms that are vertical, in the niche for the thing that you are selling? Selection of which platform is incredibly important. They all have different features and different cost structures related to them. The opportunity to grow your business through international e-commerce is significant and available, but it needs planning and good execution to realise it. Your second bit of how that would affect what happens on the high street depends on who is doing it and whether the business growth strategy is one of bricks and mortar and the e-commerce or something else. Thank you. Alexander Burnett. Thank you, convener. Just as with the previous panel question about digital sales tax, it has been previously discussed at other sessions of what that might look like if it was introduced and maybe level up the playing field between online and bricks and mortar sales. I just wonder what the panel's view is on that and maybe starting with Neil, given your international remit, what you see happening elsewhere and what issues you see might arising. I am not overly familiar with the detail of what is being proposed in the digital sales tax. I listened carefully to the comments that Stuart was making and they seemed very sensible indeed. I think that the principle of creating level playing fields is a really good one, but as we all know, the devil is always in the detail and how it is framed. Whether it has the desired policy outcomes or whether there are unintended consequences. Internationally, it is completely different everywhere in terms of approaches. One of the relevant things is that when you are selling and shipping goods to other markets, there are lots of issues around taxation and so on and so forth that you need to be aware of in terms of your approach to the customs requirements for each market that you might be targeting. That is sometimes for small businesses that they might not fully understand, thinking that they can just run up to the post office and ship it off, and that is the end of it. We have seen through the changes in approach when we have exited the European Union, there are some quite significant issues that businesses need to pay attention to when they are shipping goods from the UK to other markets overseas. I agree with Neil in his comments on what Stuart had said. I think that Stuart made it very clear that we have to think very carefully about it in terms of scale, because there is a weenie difference between wanting to tax Amazon with billions of turnover and a small retail business where it might just be in the thousands, because we can afford it. Let us not cripple the wee business before we even established their ability to do what they want to do. I think that that was where he was coming from, and I would agree with that. I think that Neil and Hugh have said it all really, and I have nothing really much further to add to that, so thank you. Thank you very much, and no further questions, convener, thank you. Thank you. Can I just now put a final question to Neil? There's a couple of things. In Siobhan's description of what SDI does, do you do proactive work as well? Do you promote the idea of online sales as well as support? I think that it was described as when a business comes to you, this is what we do. Do you promote what you're able to do? Another question was, you talked about exiting the EU and the changes. When we were down and done free, we did visit one of the shops that was a specialist shop. They do online sales as well, and they were telling me how they sell a lot down south out into London, but they said that their European sales have really dropped since we left the EU. There's obviously a different taxation, there's a different selling online than what it was prior to that. Is that a common experience and how do we rebuild confidence in those areas? Great question. I'll deal with the first first. We do promote the opportunities to grow your business internationally that e-commerce allows. We are being as proactive as possible. A lot of today's conversation has been around business to consumer, i.e. retail, but I think that it would be important not to overlook the opportunity in terms of international growth for business to business e-commerce, and we're seeing a lot of that and are supporting and promoting that activity too. I think that, as I said earlier on, for us it's all about helping businesses that have the ambition to grow their business internationally about selecting the right international growth strategy and the right markets to target and then seeing how e-commerce plays a role in delivering that overall ambition. In terms of your comment about the EU, yes, I would say that that is not an isolated piece of feedback that you dated from Dumfries. I think that it can be very difficult now for small companies to sell into the former European Union countries. There's a lack of consistency across the country, so it's not as if we've got one new set of relationships with the EU. We tend to have different interpretations of how the new framework works country to country, which makes it even harder for small companies to navigate. Are you undertaking work to support businesses and understanding the new environment to trade in? We've done a huge amount of work in helping them to do that. We'll continue to do that, but ultimately it is more complex than it used to be. We can support businesses, but it's not in our gift to take away the complexity. Just extending that point a little bit, as I said earlier, across the globe now means that the UK is entering into new trade agreements. There are international trade and alliances or blocs emerging in all parts of the country. It's becoming a much more complex landscape for businesses to continue to trade in, so continuing to help them and support them will be an important role going forward. Thank you very much to the witnesses this morning. That brings us to the end of the evidence session. It concludes the public part of the meeting and will now move into private session.