 Good morning, ladies and gentlemen. Welcome to the fifth meeting in 2015 of the Economy, Energy and Tourism Committee. Can I welcome all members? Can I also welcome the committee's adviser in relation to our export inquiry, Jane Goll's? Can I remind everyone please to turn off or at least turn to silent all mobile phones and other electronic devices so that they don't interfere with the sound equipment? Item 1 on the agenda. Our members are content that we take items 4 and 5 in private. That's agreed. That's agreed. Thank you. Item 2 is the start, I suppose, of our inquiry on internationalisation of Scottish business. I'd like to welcome Ian McTaggart, who is the general manager and company secretary for the Scottish Council for Development and Industry. Welcome, Ian. Thanks for coming along. We've got an hour with you, Ian, to go over the questions that members want to ask. We've got your written submissions, so I'm not intending to ask you to make an opening statement. We'll go straight into questions if that's all right. I can ask members, although we have some time, if we can keep the question short and to the point. Answers as short and to the point that's possible would be helpful, and that would allow us to get through the range of topics that we want to discuss in the time that's available to us. I wonder if I could start, Ian, by asking about some of the points made in the SCDI submission around this question of collaboration between Government agencies, trade bodies and industry associations. There's a bit of a sense when some of the written submissions that we've received that the landscape is somewhat cluttered, there are different public bodies involved in trying to provide support. Is it clear where the support is coming from? For example, the Federation of Small Business told us in their submission that when they surveyed four out of ten of their members believed that it was difficult to access Government support for exporting, and yet we hear from Government agencies that the support is there and people just need to ask for it. Similarly, there's a submission there from ADS, who are the trade body mainly for the defence industry, and they talk about how they feel there have been missed opportunities with Scottish Enterprise and the SCDI and the trade groups not working together as effectively as they should. Do we have to clutter the landscape? Are people not working as well together as they should be? There's probably a lot of good work on-going, both in Government and in other organisations, but it's just not joined up enough. I think the prize to be won is so great. If we could collaborate more effectively, the challenges are great in improving our export performance and diversifying the range of industries and the numbers of companies that are involved in international trade. I don't think that Government alone can do that. It certainly has a very key role to play at our playing, but the talk of collaboration, which has gone back a number of years, hasn't really been effected into something that's tangible in reality and is genuine in collaboration. Whether that's because people are constrained by time or are very busy in terms of what they're doing, what they're charged with delivering and haven't found the time and space to really sit down with all the key players. I do feel—I've read a number of the submissions and there's expertise in all of the organisations that are submitting their views—that if we could find ways of joining that up effectively, it would help businesses, which is the most important point. Getting back to your observation that many companies just don't know where to go is true. Companies will talk to the networks that they are part of already or have knowledge of, but if they get signposted too often to different agencies, they begin to lose heart, I'm sure. At this early stage of intervention in supporting and signposting businesses to the correct sources of expertise at each stage, we could be much more effective in helping companies across Scotland. I think that that also includes some of the professional services, such as legal firms, accountancy firms, logistics companies, banks and credit insurance agencies. I get the sense that they're all very willing to be part of this debate and part of the solution, but there seems to be some need to integrate it more effectively. So what needs to be done to sort this out? Where does the leadership need to come from? First of all, I think that we need to listen to what industry is saying. I think that we, Scotland, benefit from a lot of successful and established businesses who have done it all themselves, who are beyond the need for government help now, but are willing to contribute something back into the debate. So we should listen to them and listen to the small businesses who are in the early stages of finding their way through international trade aspirations and try to find out what are the issues that they're really concerned about. It does come down to leadership. I think that our organisation, others like us, need to engage with Government and vice versa to say that we need to raise the debate further. We need to talk about how we can create greater capacity to support Scottish businesses in this arena and have that dialogue and have some concrete solutions coming out of that. I'll bring in Dennis Roberts. Maybe just following on from that, Ian. I think that it was basically the landscape and it was suggested that there was a plethora of agencies to use the terminology that was there within the evidence. It suggested that maybe a single portal should be a single portal in an effort to afford the signposting in a much more directive way. If that was to happen, who would set up the central portal, the hub and who would manage it? Who would pay for it? I don't think that it's necessarily an easy solution to deliver a single portal. Sounds good, sounds promising but I think that it could be quite complex in arriving at agreement among all players as to where the areas of expertise lie, where the signposting should be, but it's worth spending the time to discuss that. I think that in terms of managing that process, there would have to be clarity about what the responsibility for that was before anyone would release a volunteer to take that on board. Government resources are larger than the resources of other organisations, so there is an absolutely key role for the Government agencies to play a leading part in co-ordinating that kind of arrangement, but I think that I wouldn't want to be definitive at this stage before there's been a discussion about the content of a portal as to who would. There must have been some discussion already in terms of, you know, this has been a suggestion that's been brought forward and also, you know, with the comments within the Wilson review that a lot of, especially, companies don't know where to turn in the first place, so therefore, you know, one solution would be to have this, wouldn't it? I know that it's a key proposal in the Wilson review but, to my knowledge, there hasn't been that detailed discussion about it subsequently. I think that still needs to happen but I think that it's still very worthwhile because it's an idea that many players have interest in and think could make significant progress, particularly in helping businesses. Do you think that it would afford the SME sector a sort of more level playing field in terms of accessing information and direction if that were to happen? I think that, to some extent, they don't have the same access to the information or don't know where to go at the moment. That seems to be what the evidence is suggesting. If we went down that particular route, do you think that that would afford the SMEs that are at a level playing field in terms of accessing information? I think that it would certainly open up information, the availability of information for SMEs. The problem for them is that they have very limited time to search themselves for information and they will probably still rely on some relationships that they have to guide them through that process. I think that it's right that the information should be open and as available and accessible as possible to all kinds of companies across all sectors and all sizes throughout all of Scotland and that there is some level playing field there. I think that smaller companies will still need some kind of adviser to help to take them through that process, but there are arrangements with Business Gateway, for example, and others at local organisations. We could have a multi-tiered approach, which gives companies the opportunity to navigate themselves, but we shouldn't be reliant on companies having to do all that digging themselves. There should still be expertise available to help them with that process. In your view, who should pay for it? I know that you have said that there are discussions to take place, but who do you think should pay for it? I think that the Government should largely pay for it, but I think that it could be a Government-industry partnership as well, and something that I would like to see more of is genuine industry-led activity. Do you envisage taking a submission to Government with that type of recommendation after discussion? The Wilson review suggested that the SCDI would take on the management of the portal. We haven't had extensive discussions about that, but we would be very willing to find out what would be involved and whether we had the skills and capability to deliver that effectively. If other organisations felt that they wanted to play their part in it as well, which I think would be very important, we would have to have joint discussions and then come together with a proposal that, yes, would probably go to Government for at least some kick-start funding. Very quickly. This is almost like a rerun of a previous session that we had with Creative Scotland and Scottish Enterprise. It's all very well talking about money and funding. Who owns the leadership of the export drive in European? I think that we probably need to rebalance it and the industry needs to take more of a lead in saying that this is what we need to help us to maximise our potential in international markets, but there's no way of getting around that Government is a key player in terms of the intervention in helping to make things happen. I should have said good morning. I hear what you're saying, but at the end of the day is that I'll use the phrase again, where does the buck stop? I have a view in terms of how we achieve the export drive and how we engage and we'll come back to that later, I hope, but somebody has to feel they own. We have some exposures in terms of 50 large companies are our main exporters. We need to drive a lot more of the people up the chain. I think that if we look at the situation at the moment, the strategy is in the hands of Government and the delivery of that strategy is in the hands of Government, managed and resourced by Government. I do agree that industry has to play its part. Industry has to rise to the challenge at times. Companies of all sizes have to do their part in making progress, but there has to be a collaboration between Government and industry. Ideally, it should be joint ownership, a strategy should be something that all players sign up to, adopt, feel is realistic, is tangible and that's not the case at the moment. Thank you. The point is that we have partnerships and we have collaboration, but at the end of the day, who says that's a strategy and that's what's going to happen and make decisions that drive the thing forward. We just don't have that, do we? We don't because in terms of resources, resources are largely in the hands of Government. Industry should be able to help fund some of the activity as well, but they need to see what the big plan is and to understand their role in it and how everybody will work to mutual benefit. I think that's the situation at the moment. It's working very well in certain areas, but not to everyone's benefit. Morning. I note that you drove most of the visits, trade missions and 370 market visits, along with 6,000 companies, but you didn't tender in 2012 because of some issues around the contract. Why was that? Well, we've never wanted to air the issues publicly before, but the tender was in the public domain, so it's quite easy to say that there were some issues that we had reservations about at that time, which had appeared for the first time, and those were all around restrictions on our potential to add value, as we saw it, to the activities. So, for example, in terms of communication with companies, we could only communicate through a dedicated SE email address. We had to signpost all companies to SDI for business advice in the lead-up to a visit, whereas we felt that we had knowledge, insights and experience to add to the table. Publicity was all to be in the hands of SDI in terms of generating profile and press releases, inviting ministers, which was something that we had done fairly frequently. In fact, in the previous year, we had trade missions led by one led by the First Minister, another led by the Secretary of State for Scotland. We felt that that was all to the good in terms of galvanising support for Scottish businesses overseas, but whoever won the tender for that was going to be restricted in all those areas. It wasn't an easy decision for SDI to make, because bearing in mind our history, we'd operated these projects for over 50 years, and we're best known for that. Our members want to continue to want to see that happen, but we had to decide whether that was in our best interests as an organisation in terms of the added value that we want to bring to the party. Sorry, I can't resist this question. So, do you feel that it's went down since your company or your organisation has went out of the situation? I don't know what's happened, to be honest, in terms of other activity. I don't know whether what we did before has actually been replaced or displaced in terms of other projects led by Government, but it's actually quite difficult to find out on any portal what's happening. If I was a business sitting somewhere in Scotland who wanted to see a forward trade mission programme over the next 18 months from Scotland, I would find it very difficult to access that information. So, yes, I think that it's a pity for the businesses that we have dealt with across Scotland in those kind of projects. It was decided to leave it there at that time. We've worked with other organisations since, but on an ad hoc way, which is not sustainable. Although we were putting our own resources and management time into those projects, in addition, we couldn't justify, we couldn't fund continuing that kind of activity ourselves. So, from our viewpoint, it's definitely a loss and definitely a feeling of being squeezed out of that activity. I think that Richard Rather stole the ball from Lewis MacDonald, who was planning to ask about this, so we'll pass the ball back to Lewis MacDonald. Well, in fact, I think that he set me up for a good whip at the ball, I think, because I think this gets right to the nub of the issues, because if you've been delivering for 50 years effective leadership of trade missions on behalf of Scottish business and industry and the government then unilaterally changes the terms of reference in a way that stops you doing it, I think that sounds to me quite serious. Do you have an explanation, do you know, or have you had from government an explanation for why they did that, why they changed those terms of reference in a way that made it difficult for you to proceed? Not really, we did, at the time, set out our reservations, the reasons underlying our decision not to bid for the contract, we set those out to Scottish Enterprise at the time, but I don't think that we, although I wasn't particularly closely involved at that time, I don't think that we did really get any reasons behind the change of emphasis in the terms of the contract, and it's kind of evident that no one else, no other organisation, found it appealing enough to take up that contract either, so we hadn't, there had been no question over the value that SCDI had brought to those projects beforehand. The funding is quite, it's relatively modest as well in terms of £50,000 a year to mount a series of four or five projects, including the funding available for companies participating, and the return on investment was the business achieved in terms of what companies were telling us directly about business that they had achieved, which was in the millions of pounds, I think over the lifetime of the contract, it was over £20 million, businesses had said they had achieved as a result. So the contract was not let? Not to my knowledge. And therefore that job, that valuable job that you done over that period of time, simply seems to be done from out with the contract. As far as I can see, yes, I can't see that the same volume of activity has been undertaken in those three years. There obviously are still trade missions undertaken by Aberdeen Chamber of Commerce, for example, in their oil and gas expertise. As far as I can see, SCDI are the key player in trade mission delivery, and we're not aware that that activity has been replaced. So in a sense, we stepped backwards. In terms of the Government-Industry partnership, it was a step away from the kind of model of partnership that the likes of the Wilson Review is recommending that we ought to take forward. I think that it certainly felt like that from our point of view, yes. In the following paragraph of your submission, you also say, and I think it relates directly, that it's not possible to develop a forward programme offering market visit opportunities to aspiring exporters in the absence of core central funding. Now, is that another reference to the £50,000 or is that a reference to something else that's either disappeared or not been carried forward in the recent past? No, I think that that's probably the same issue in terms of the guaranteed funding resources to enable planning to take place over a two to three-year horizon, which is ideal for companies. We did find that many companies started to look at markets that they wanted to visit and could see projects falling within the next 12 months or 24 months time frame, and they would build their activity around that, to be honest. Does that mean that it's implicit in that, and I notice that you also reference specific projects that you've undertaken with local authorities, but is it implicit in that that you believe that one of the things that we need to promote Scottish exports is some kind of core central funding from Scottish Government? Absolutely. And that's a gap in the market. Just before I move on from this, I want to pick up one point about the history of SDI, because you mentioned that trade missions were run by Scottish Government ministers and UK Government ministers from the Scotland office. Has that continued since SDI ceased their involvement in trade missions? I think that Scottish ministers have led SDI-organised trade missions. I'm not aware of the Scotland office being involved in recent years. I may be wrong, but to my knowledge, I'm not aware of any. Our point of view was that we were trying to get the best of all worlds by inviting ministers who were supporting the Scottish effort, and particularly as we're also relying on UKTI resources, the network globally, that that was a very constructive way of generating profile and using these key figures to open doors on behalf of the delegations. There's no doubt that that works, and ministerial led missions do open doors. Do you think that SDI has frozen out UK Government ministers, or is that just a conspiracy theory? I don't know the answer to that. I would imagine that they would naturally work with Scottish Government ministers closely, but they also work with UKTI, so I would think that it was still in the interests of Scotland to have the opportunity to invite ministers from both Governments who are never appropriate. I think that Gordon MacDonald wants to make a point. I was just wanting to ask a question. You said something about companies weren't aware of trade missions and where to get support. If I picked you up correct, I've just googled SDI, Scottish exporters, and I've also googled support Scottish Enterprise, support Scottish exporting. Both of them take me to the same page, which says, join a trade mission overview, are you eligible, what's involved, it's got a phone number, it's got an email address. When we were away on the trade mission last week, it was clear that SDI and UKTI were working closely together, and the guest of honour at the chamber opening of the trade mission was Lord King. I'm not sure where you're getting your information from, but from our experience, I wouldn't say that was correct. I'm happy to be corrected because I did yesterday try to find a forward programme of trade missions and couldn't, but I'm not here to denigrate the good work that SDI are doing because if you talk to companies that are supported by SDI, they are very positive in most cases about the support that they're getting. But I guess what I'm saying is that even they have limited resources and can't do everything to satisfy all companies across Scotland, so that's where we come in in wanting to complement the work that's already on-going, but I take your point that I do know that they work closely with UKTI and we welcome that because we do want all the resources that are available from government in Scotland and in the UK to be available to Scottish companies. That is an important point, isn't it? UKTI has 10 times the staff, 6 times the number of offices around the world, access to export markets that SDI doesn't directly, isn't directly represented, and therefore they are built and Gordon is right to mention Tom King, but he was there with UKTI on their part of that mission. If Scottish exporters want support from UK Government ministers, do you perceive that because it's only SDI that are working and there's not an industry input that it's perhaps more difficult to obtain? I think that we have to make sure that we show that, demonstrate that we want that support. SDI hosted a meeting with Lord Livingston, UKTI Trade and Investment Minister last week, and there are definitely issues that UKTI can help with. If you look at the Scottish whisky industry, for example, they talk in their submission about trade policy being the main focus of the help that they need, and that tends to be at UK Government and even at EU level. It's a question of making sure that we can press on all the levers that are available to us to help us, whether it's with trade promotion activity or policy issues around free trade agreements or tariff barriers and so on, those issues that UK Government ministers can also help with. Acknowledging your submission on the success of the client-account-based approach of Scottish Enterprise, you also talk about the companies that are missing out on potential support, because perhaps they are not as part of that client-account-based approach, particularly SMEs. I represent the south of Scotland, and during our budget scrutiny, it emerged that the number of growth export companies in Dumfries and Galloway, for example, was 1.8 per cent of the total in Scotland. I wonder whether you thought that the enterprise network, because of that, perhaps isn't supporting export growth companies outwith the central belt as much as it could? I think that, again, from the various submissions that I've read, it's an issue that many organisations have raised. Those companies who feel excluded, who are not account managed, don't necessarily feel that they have the support that they need. I wouldn't have any evidence to say that the enterprise network has created the situation that you're describing in Dumfries and Galloway, but I'm sure that access to the enterprise network officials may vary across the country. That's why we're keen to take a Scotland-wide approach and see where there are gaps, who else can help to fill those gaps. I guess that we can't have all companies account managed, but we need to think that there is export potential in other companies who are excluded from that network. Are there other ways that we collectively can help them to make progress in terms of what their own objectives are? Within the Highlands and Islands, the enterprise network is obviously the threshold is lower in terms of company turnover for getting the support that they get from HIE, whereas in rural parts of the Scottish Enterprise Network, such as the south of Scotland, the threshold is just the same as it would be for the central bell. From the point of view of SMEs getting support to export, have you noticed a difference, for example, in rural parts of the Scottish Enterprise Network and the HIE geographical area? I think that there will often be differences in other rural parts of Scotland from Highlands and Islands just because Highlands and Islands has its own dedicated enterprise network with its own arrangements. If we can find the evidence that companies in other rural areas are excluded from the kind of support services that they need, we should be able to make a case for addressing some of those issues and reviewing some of the thresholds that are applied. The other thing that you say in your own submission is that building greater confidence to export can come from creating local networking opportunities for business where they can share their experience of exporting both good and bad. Are there areas of the country where you think that those networks could do with being strengthened? There are probably quite a lot of areas, but rural areas would come to the fore again, because networks tend to be city and city region dominated. I think that what we are probably looking for is some kind of consistency of approach across the whole of Scotland in terms of local networks, that budding exporters can come along to and learn from those who have already met some of the challenges successfully. That is something that we are very clear about. In our minds is that getting businesses together to share experience is of tremendous value, probably underestimated value. There is a lot that they can do to help each other. In our trade missions, for example, which were always multi-sectoral, we found that it was a fantastic vehicle, not just to achieve business, to build up the confidence of some of the first-time exporters, because they were spending time in the company of their peers, others who had done it before them, not necessarily competitors, sometimes from different sectors. Building up that confidence and also a sense of shared camaraderie, where, even on return to Scotland, those companies would keep in touch with each other and refer each other to sources of additional assistance and expertise and contacts. In terms of local delivery of export clubs or export networks, whatever you would like to call it, I think that we need to look at a plan that is Scotland-wide and gives companies in the rural areas as much support, as much access in the cities and in other regions. Do you, as an organisation, do much work in rural areas? We are part of our strategy. At the moment, our three-year strategy is to develop our regional footprint further. We are looking at Ayrshire and Dumfries and Galloway right now, so we have been down to Dumfries and Galloway meeting colleges, major companies and so on. We are trying to do as much as we can within our limited resources, but it is part of our philosophy at the moment. Certainly when we took evidence from businesses in Perthshire, what struck me particularly was the number that said that a lot of their marketing was done through the internet. They did not actually use advertising on the website. If you had an effective website, it was a great way to make contact with all those clients. Is that your experience as well? What more should we be doing in order to get more companies to understand the importance of that? Absolutely. I think that the digital issues are very important now. First of all, we need to ensure that, as much of Scotland, all of Scotland has access to high-speed broadband, that is the basic tenet, but also devoting some resources to helping companies to understand the potential of the internet and how to approach it properly. As an example, SCDI has been working with UKTI on web optimisation masterclasses, where an expert will come in with a small group of companies and go through all the process of how they can adapt their website, how they can maximise the potential to make it effective as a global marketing tool and to deal with global business. It is an issue that we need to take more account of. You mentioned your strategy that you are working on. Joe McAlpine mentioned the plan, focusing on rural. Is there, in your book, a Scottish Government export plan? Are you aware of the export strategy of the Government, either directly or through SCDI? I would say that I am aware. There is a parallel inquiry going on at the moment with the European Committee on Connecting Scotland, which was asking questions about Government strategies for international connectivity and for specific market plans. I know some of those plans because there has been dialogue about them. Organisations like SCDI get involved when they are created or refreshed in discussions, but our point is that nobody else in the outside world knows about them, particularly businesses who are the ones who have to deliver the detail of that plan. Where is the plan? Will Scottish Enterprise hold that plan in terms of its own strategy and the plan specifically for export targets for Scotland? I am keen to understand whether we have the right level of support in place to encourage companies to export. The submission from the Institute of Chartered Accountants in Wales says that it is also clear that many Scottish businesses lack the ambition resources and, in some cases, courage to take the substantial risks that are involved in seeking to open up worldwide markets. Given that you had some responsibility up to 2012 for encouraging companies to go on trade missions, why, over that 50-year period, have we still only got 50 large companies that are doing the majority of exporting, given that you had those 50 years to try to address that problem? I think that there is an issue about lack of ambition at times in businesses across Scotland, not just relating to exports. I am not sure about the lack of courage. I think that there are ways of mitigating some of the concerns that many fledgling exporters will have because, if you put yourself in the perspective of a person running a small business who is responsible for all aspects of that business, it looks like some degree of risk. It looks like a lot of time and resource without any guaranteed payback, so we can understand that there may be reservations. However, that is where getting professional advice and expertise into companies, talking to banks, credit insurance, talking to legal firms, talking to logistics companies to help them to understand how they could deal with some of those issues would spur them on, hopefully, and give them a framework of support to build confidence in that respect. I do not think that SEDA should take the whole blame for 50 years of lack of ambition. I am not suggesting that you should. I think that our economy has been through massive change in the last few decades. One of the questions in the inquiry was about the dropping manufactured exports, and we pointed out that the change in the electronics sector was absolutely dominant since the value of Scotland's exports at that time. We appreciated all that activity and Scotland was well known, Silicon Glen and all that, but the end result was that that investment was fairly rapidly mobile when global circumstances changed. Scotland has had to deal with a lot in terms of adapting to different circumstances, but we still have a lot of companies with huge potential. We have a lot of traditional manufacturing and engineering companies that have adapted to global change, that have huge knowledge and expertise that they are now able to sell commercially to overseas markets. As much as making things, it is the know-how in terms of project management. I would not lose all hope. I think that our point is that there is huge potential. There is a lot of untapped potential in Scottish business that we need to somehow release and build that confidence to make them think about being players in international markets, de-risk some of that, take some of the mythology out of it as well. I know that that is something that SDI are doing a lot about as well. They talk about that a lot. I think that that is good because we need to, with companies and local networks at the very start, say that there are risks involved in exporting, but here are some of the people who can help you with that. That is how you can start planning your adventure and taking it forward. You have rightly identified that there is a huge potential and that we have to de-risk it and build confidence. Is the SDI's smarter exporter programme up to scratch for supporting companies? I am not sure that I would be able to comment on the smarter exporter programme. I know what it is about and what it is aim to deliver, but I have not seen any evidence of the impact. I think that that would be useful. That is an example of an initiative where it would be useful to have some public discussion about the value of that so that we can learn any lessons, the good and anything that has been ineffective to take forward into new initiatives. One of the challenges is that we do not have enough public debate about exporting, about why we are not good enough at exporting, why our performance is lower than it should be. The global connection survey is something that should be debated much more widely in Scotland across academia and across the media within Government. To me, there is a lot of information there that is buried and not actively engaged in thinking what is the way forward for all of us. However, as far as smart exporters are concerned, I am not sure what the results have been so that we do not really want to comment on that. My final question is, how effective do you think is the global Scott network? Has it been of benefit to companies? You mentioned earlier on that trade missions in the past, it was important that companies learned from their peers, so is this another effective? I think that the value of global Scots themselves as individuals is fantastic, is probably quite unparalleled, and it was something that we were always keen to do in market is if we could to engage global Scots just to come along and interact with the companies, because they had a huge amount of practical information and knowledge about that market that they can share with others, so hugely beneficial. However, we have heard from some global Scots themselves that they feel underutilised and some companies in Scotland that do not know if they are able to access them or not. We could benefit from clarifying the access arrangements, again giving more publicity to the network and what it can help to achieve and just to make it easier for them to play a real part, because I know that the global Scots themselves have a real willingness to do something that aids Scotland's international effort, and we really want to capitalise on that as much as possible. I am interested in what you have already said. You said that you need to have a Scottish approach, but you need local networking and recognising the diversity within Scotland. Highland and Islands should do that, but it seems that Scottish Enterprise does not, so is there something that Scottish Enterprise should be doing differently? Given the scale of the area that it is responsible for, it would be rather foolish to have one-size-fits-all, but I am also interested in how you think or who should drive these local networks and should it be at a city level. We know that they are city-wide, so Glasgow, Edinburgh and Aberdeen have their own initiatives. How can they be supported to get companies at that local level together? Smaller companies, for example, in the Highlands and Islands, are developing businesses precisely because of the internet. There is an opportunity to stabilise populations in some very fragile island communities because of that opportunity. How do you get those to work together? It feels as if it is almost all too small for Scottish Enterprise, but you are saying that at the same time that it needs to be done at Scottish level? That is where it needs to feed into a collaboration agenda if we want some kind of consistency of approach across Scotland while still allowing flexibility. It is the discussion between Scottish Enterprise and others, whether the cities, whether the SCDI, the Chains of Commerce, the Federation of Small Businesses, about how we resource that activity first of all and then how we can arrange it to the best effect so that we can recognise local situations, local circumstances but still give those companies access to the best advice and the best experience and bring in experienced players to meet them, to discuss the challenges that they faced, what succeeded and what did not. I firmly believe in my experience that businesses want more than anything else to hear from other businesses that have gone before them. Perhaps in the same sector, but not necessarily, there is still read across issues across sectors. I think that it is part of the dialogue with Scottish Enterprise and others to say that perhaps it is not something that Scottish Enterprise has the capacity to deliver themselves or think is uppermost in their priorities, but how can we make sure that we are working together and others can get involved in delivering that across Scotland? Is it something to do with the role that Scottish Enterprise has for itself when we talked about perhaps perceived lack of ambition, which is perhaps rather unfair if people do not have the confidence, but is part of it that Scottish Enterprise looks to see what is successful and supports it rather than taking risk with supporting companies to take risk, which is quite a different kind of view. Does that therefore mean that loads of potential energy out there that Government agencies do not see as part of their responsibility? To be fair to Scottish Enterprise, they talk a lot about leadership and ambition as being absolutely key to maximising our exporting success. They are working with very aspiring and ambitious companies, and it is probably a capacity issue that they are working with the ones that they think will work most effectively, and they cannot do more of it. I am probably coming from the point of view that there are other organisations that can help to complement their activity by becoming key players in those other areas. We all agree on certain premises and the issues of dealing with the confidence and injecting ambition are something that we would all agree with all organisations, so some of us can play an active role there where Scottish Enterprise does not have the capacity or do not think that that is the priority in their agenda in dealing with smaller companies outside the account managed companies in their cohort of clients. Is there another role for your organisations like you to give the opportunities for businesses to be heard, but not just to support each other when they think about exporting, but almost a stage before that at a very early stage? How many of our young people think that we are not going to business at all? If they were going to business, would they think about doing that kind of quite scary stuff? What are the kinds of things—do you think that there is a role for yourself or other organisations or is it Government or who—that is perhaps going to colleges, universities, schools or wherever—to try and support where there is the enterprise agenda being developed? Those are absolutely huge issues. There are huge challenges there and opportunities. I think that dealing with young people in terms of generating more of a global mindset, helping them to understand their position in Scotland in a global world, some of them might want to immediately get more involved in international business, for example, so it is giving them the tools that they can start learning from an early stage, working with SMEs, for example, working with international students who are in Scotland, which is a really untapped resource in terms of the additional benefits that they could give SMEs. If you have Chinese or Brazilian students in Scotland and an SME is looking to approach China or Brazil, it would be ideal to marry them up on a project basis with that international student, giving them a bit of professional experience, but they would be bringing all of their cultural assets to the table in terms of their knowledge of that country. Accelerating communication, opening doors for the company. I think that there are so many challenges and we would love to get involved in as many as possible, but dealing with young people in building confidence is a key one. Is that mapped anywhere? I am conscious that Mone local at FE College does a lot of international business. Is there a means by which, for A, we know where that is happening, and by then letting businesses know that those folks are there and that there is some opportunity to come together? As far as the colleges are concerned, I would imagine that Collegy Scotland probably does map that, because there are quite a number of colleges across Scotland that are very active internationally and that are running contracts overseas in terms of training personnel in oil and gas or whatever subjects, so some of them have real expertise to offer. I think that that is the dilemma. There is a huge amount of good work going on in the Scottish economy, but it is not joined up enough for people to know that it exists, first of all, and then to be able to share that good practice more widely. I think that that is something that we would all want to strive towards, really highlighting best practice, rather than reinventing the wheel and enabling that kind of cross-fertilisation of learning and ideas more easily. Can I just ask one very last point about joined up? Does strike me? We talk about government responsibility here, but obviously there is both the Scottish Government and the Scottish Scotland office. What sense do you have of, in relation to this particular instrument, supporting people to export and supporting business, what connections are there between Scottish Government and Scotland office? Do you have a sense that they are working on a joint strategy? I would probably say that, prior to the referendum, there was not a lot of evidence of that connectivity. I could not honestly say whether that has changed since. However, at the highest level, there is a recognition that there is a lot to gain from Scottish Government and UK Government agencies collaborating effectively. What I am making about the Scottish Office is a Scottish organisation, which is part of the UK Government. It has clearly got both resource and an understanding of business, as does the Scottish Government. It would seem odd if they were in competition with each other, rather. I wonder if you knew that there were structures that brought them together. Is there a formal way in which they work together? You might not know that. I am not aware of a structure. No. I know that there was a large-scale export event a few months ago in Edinburgh, which the Scottish Enterprise and UKTI collaborated on very closely, involving 400 companies coming to learn about exporting. That is the kind of thing that should happen. The Scottish Office is active in international business, promoting services and so on, but I am not aware of a formal structure. That is not to say that it does not exist and that dialogue goes on that I am just not aware of. A few minutes ago, you were talking about the way that the Scottish economy has changed and the global context has changed over recent decades. I wanted to cast that forward a bit and look at the change that we need to be ready for, the change to come that we need to be engaging with. Quite a lot of your documents, SCDI's documents, are peppered with perhaps one of the most loosely used buzzwords in the world, sustainability, and indeed the Scottish Government's favourite oxymoron sustainable economic growth. I was drawn to a paragraph in a document that was published in Scotland in May 2013, which talks about the next couple of decades and the prospect of a perfect storm as emerging economies grow and the burden on the planet's resources peaks. Pressure on the global commons, which itself is an interesting choice of language, and pressure on the global commons from emissions to water scarcity will increase as will the potential for financial crises and cybercrime. Elsewhere in the document it talks about the challenges and as well as opportunities from areas such as the big data agenda, the internet of things and so on, the challenges that come from a hyper connected world. What definition of sustainability does your organisation use and how is it applied? What areas of economic activity would you see as having potential for increased quantity but having the wrong quality for the future? In terms of sustainability, we are obviously looking to the agenda that has been set that has been agreed by government here in Scotland on carbon reduction, on deploying resources effectively, on the circular economy, for example, and on looking at innovative ways of minimising impacts on the planet, while still producing the products that we want to consume in a sustainable way. I am not sure that I can come to you with an SCDI definition of sustainability. You might think that it is loose. It is often loosely used. We are also accommodating within our membership such a diversity of interests that there probably is not agreement or common ground among those members as to what that would mean, but I think that there is a general acknowledgement that carbon reduction and looking at how we use resources and how we continue to re-engage resources is high on the agenda. Are there any examples, bearing in mind the tone of that paragraph that I read out from your document there, are there any examples that you could cite where you have taken a view that a particular form of economic activity is increasing pressure on those global commons unacceptably and therefore is not something that you seek to support, or one where you identify opportunities to contribute to the global commons and therefore an area where you would have a greater interest, not just in seeing more of stuff but the right kind of economic activity? Are you relating this to our exporting activity? I think that Scotland has some expertise in issues around waste management, waste water management, that kind of know-how intelligence that we can commercially engage with other markets around the world to help them to find solutions to some of their growing problems as fast-growing economies. Obviously, the whole issue of pollution in rapidly industrialising countries is a key challenge not just for that country but globally. There are companies that are developing expertise, developing services and products that help to minimise that kind of adverse reaction, and so those are business opportunities that we are supporting and should be supporting. I think that there is a green agenda woven into a lot of the Scotland's export strategy, but it is a question of the companies that we can identify that are able to do something beyond their domestic market. And a separate question of how much destructive activity it sits alongside? There probably is a fair amount of destructive activity that is still on-going. It is changing the balance in the economy here as well, isn't it, in terms of what kinds of businesses we have and what they are doing. I think that there is greater visibility now of the global challenges in terms of climate security, food security and water in particular, and companies are responding to that in the market by saying that there is an opportunity for me in terms of my scientific background, whatever, to develop a proposition that would help with that challenge in overseas markets. It is a question of that balance changing over time, perhaps not fast enough to satisfy you, but I think that we are aware of it and the Scottish Government and its agencies are definitely aware of it. Time for one final question on a slightly different topic. You mentioned also, in response to another member's question, the global Scott network, and you talked about the commitment that its members have to Scotland. Unless this has been changed rather quietly without anybody noticing it, I think that Donald Trump is still a member of the global Scott network, someone who has attacked and damaged the environment locally in Scotland, who attacks and continues to attack both in the media and in the courts, Scotland's energy policy, Scotland's energy policy, and also who has attacked and bullied individuals and communities in Scotland. Isn't that a bit of a joke if we keep someone like that as part of the global Scott network? I think that you should not feel obliged to answer that question, you are free to answer it if you wish, but you might not wish to feel... I was not responsible for that appointment, but Noah, I hear what the member says, and I do not think that I should comment on that further. Okay, a couple more members want to come back in. Firstly, Lou's McDonald. Thank you very much, convener. A couple of things very quickly. First of all, on the balance of exporting, oil and gas engineering, Scotch whisky, food, universities and colleges all do very well internationally, but in a way, their success highlights the failure of other sectors. Is there something further that either Government or organisations such as SCDI can do to encourage other sectors to engage effectively in export? In other words, is there a sectoral issue here, or is it just about individual companies? That is a very good question. I do not know that there are obvious sectors to talk about. If you look at the textiles sector, for example, which has traditionally been a very successful exporter and still is, the Scottish sector has had challenges because of global competition and global issues, but there is a kind of strategy behind that sector to help the companies there in their continuing export endeavours. There are no obvious sectors that have huge potential that are not being addressed, I would imagine, but when there are priority sectors for Government, there are other sectors that perhaps do not get as much attention, and that is where others can come in and see if we can give them adequate support to fulfil their potential. It is probably more a question of individual companies as well. That is very helpful. Finally, you mentioned the importance of digital connectivity clearly vital to any export company and also vital to export companies, as someone who was discovered last week has direct air connections to potential markets. For example, Edinburgh to Doha, Glasgow to Dubai are vital to Scottish businesses doing work in the Middle East, but there is no connection from Aberdeen to the Middle East, which is a glaring omission in a sense. However, you say in your submission that an air-root development fund, such as was abolished eight years ago, would be a good thing for promoting Scottish exports. Can you say a little bit more about the potential for that? It is something that I think was regarded as a great success in the past. We do appreciate that it came up against EU rules and we have to find ways of addressing that, but I think that there are other examples perhaps in the European Union where such support is still given. However, there is no doubt that the root development fund was instrumental in encouraging some airlines to come in to Scottish destinations because, as I understand it, the first couple of years are absolutely critical in terms of the marketing operation and justifying to their own airlines that there is enough of a market to fly direct from Scotland. That was critical in making the decision for some airlines to trial direct routes from Scotland. Something that should be looked at again is important. SCDI would always take into account the needs of the North East and the Highlands and Islands as well in terms of air connectivity to London, for example. It is absolutely crucial, so we need to keep firing on all fronts to raise that agenda. Two very quick questions. Following on from John Lamont's question about young people, can you tell me firstly what representations SCDI has made to the Home Office regarding their asinine strategy on visas? You know that the Fresh Talent initiative has gone, which would have encouraged young international people to stay in Scotland and do the very things that you were talking about. That is the first one. Secondly, SCDI has expressed doubt that the Scottish Government's target on exports will be met. Can you tell me why? Doubt expressed in that paper was not based on any robust evidence. It was on the feeling that more about the state of some of the key markets that Scotland is exporting to rather than saying that an ambitious target is going to be reached. I think that it was particularly around the Eurozone markets, which have been quite challenging for Scottish exporters recently. Having said that, the latest export figures did indicate a 7% increase, which was very encouraging. I guess that there is still a lot to play for, and we would not want to downplay the opportunity to reach that target. Our comment was really on some of the difficulties in other economies. On the other issue, we have made regular continuous representations to the Home Office to the Border Agency, because it is one of the key issues that we hear about regularly from our members, particularly in universities and colleges, issues around student visas and the opportunity for international students to continue working and contributing to the Scottish economy for a period longer. We absolutely agree that the Fresh Talent initiative was a fantastic opportunity and a great success as far as we could see. It would be absolutely ideal if we could continue to tap into that international experience of students coming to Scotland, because they bring those cultural dimensions and understandings as well and can help to populate some of our younger people, their Scottish cohorts, with a broader outlook perhaps. The visa situation is something that we have concerns about, absolutely. Scottish Enterprise and High, probably via STI, has stated quite clearly with their new business plans that they are looking towards the internationalisation programme for experts. They are talking about the opportunities that they face. Scottish Enterprise has stated quite clearly that they will be there at the very beginning on that journey to realise people's ambition, to take them through the process, to offer the guidance and support that they actually need. Do you believe that that is not happening? From what I can gather, there is a suggestion that it is maybe not happening, but it is clear within their business plan and the papers that they have submitted, that they are there at the forefront to take forward the internationalisation programme within the exports? No, I would welcome the comments that they have made there. I think that they have to be at the forefront of that internationalisation drive. Over the years, the agenda has widened. We have touched on some of the subjects this morning, the sheer number of subjects that can be included in terms of fulfilling our potential internationally. I would welcome and endorse what they say there, but I think that there are opportunities for further collaboration with others to maximise that agenda because it can expand on that. The issues that many organisations are hearing from their networks are that there are companies that are still confused, do not know how to get the right kind of help, do not know where to access information and, if that is still the case, we need to address it. That takes us back to the very beginning of today's evidence in some respects, of setting up a network to try and ensure that the evidence is clear for people to access in the first. SCR is saying that they are there and they are providing the evidence and raising the awareness. Do you believe that they are not? No, I am not saying that I do not believe that they are not. Obviously, an initiative like the smart exporter was aimed, as I understand, to get more volume of businesses into exporting, to really attack more of the mass market, if you like, in terms of the inexperienced exporters giving them the basic tools to understand what the journey ahead of them is. Probably what I am saying, if anything, is that I do not know the outcome of that, so I cannot comment one way or the other, but I think that it would be good, it would be useful if those outcomes were shared more widely so that we all understood the lessons that have been learned. Perhaps, finally, some of the challenges that some of the businesses in exporting face are things like APD and access to ports for freight and cost. Is this something that is very much your opinion that your members are stating to you are some of the obstacles that are being presented to them and actually prevents them from exporting? I think that there are certainly obstacles there that we have heard make exporting more difficult, access to ports, congestion, the routes and the time taken to get to ports, particularly for long-haul destinations. We have put some of our views forward in another submission on freight to the infrastructure committee, so you might see some details in there that you are looking for. It is an issue that even the successful experience exporters come up against from time to time is the logistical challenges of getting their goods to market. What is your opinion on APD? SCDI has always advocated APD and we welcome the devolution of APD and eradicating it as an uncompetitive tax. Just on that point of APD, how quickly would you like to see that removed or reduced? As I understand that the Scottish Government's policy is to reduce it by 50 per cent within the term of the next Parliament, which could be six years away, is that satisfactory? No, I think that we would want to see a more rapid effect than that. If we look at the competitiveness of aviation taxes in the UK compared to other international markets, it seems quite a deterrent at the moment, particularly in Scotland when we have geographical issues to deal with in terms of our people flying around the world. It is an added burden that we could do without it. Briefly, Richard Lyons. Just quickly to round it up, convener, you were at the forefront of trade missions, all the exports for the last 50 years, decades. If the opportunity came again with a decent contract or a contract that you liked, would you take part? Yes, we never said that we would not want to continue being involved. At the moment, we are looking more at the issues that are affecting exporters. We are talking to our experienced exporters and trying to see how they can help SMEs. That is our agenda at the moment. However, in terms of taking companies to the market, we have been very good at that over the years. I have built up knowledge and yes, we would want to continue playing that role if the opportunity is there on the right terms. There are more questions, so we will call a halt slightly over time. That has been a very useful session. Thank you very much, Mr McTaggart. We will now have a very short suspension to allow a change over. If we can reconvene, please, item 3 on the agenda. There was a committee visit last week to Saudi Arabia, shadowing a trade mission that was run by SDI in conjunction with UKTI, and Gordon MacDonald, Lewis MacDonald and myself, attended that, accompanied by Diggy Wands and Greg Liddle. Just to report back to members briefly on what was discussed at that, this was for what was called the British energy week in Al Qubar, the eastern province of Saudi Arabia, which is up on the Persian Gulf coast. As I said, it was a joint UKTI and SDI-sponsored trade mission. There were about between 30 and 40 companies, representatives of which I think 10 were from Scotland, many of them from the northeast. We attended sessions with the Asharkya Chamber, which was a local chamber of commerce in the area. That provided companies with an introduction to the opportunities and challenges to doing business in the region. We met with the head of the board of directors of the chamber to discuss opportunities for Scottish businesses and the oil and gas sector, particularly in the eastern region, which is the energy hub of Saudi Arabia. We had met representatives and detailed a lot of engagement with Scottish companies who are participating in the trade mission to understand their objectives from the visit. The feedback, I would say, was generally very positive. They were reporting productive meetings with Saudi counterparts and possible leads for future contracts. I think that what the committee would like to do is follow up in the next few weeks with the companies who are there to see exactly what the productive benefit has been from participation in the mission. While we had a number of discussions with UKTI and SDI officials in order to better understand their support, they provided companies seeking to internationalise in the market and elsewhere. We met with several global Scots working in the region who found out more about the support that they offer to Scottish companies seeking to enter the local market. Along with SDI officials met representatives from the Al Qatani group of companies who are a Saudi trading family to discuss opportunities for future partnerships with Scottish companies in the oil and gas sector and in the education sector. My overall impression was that, something from the Scottish companies participating, I think that they had a favourable impression. They were praiseworthy of the service being offered by UKTI and SDI. Suddenly, the SDI people on the ground were extremely knowledgeable, very well-connected, very good at opening doors and setting up contacts. It would be interesting to follow up in a few weeks time and find out exactly what concrete business deals have been done as a result of that investment. That was my impression. I am happy if either Lewis or Gordon would like to add anything to that, Lewis? A couple of things. I would like to add, particularly in terms of some of the companies. Also, some of the way in which the Saudi-British energy week was organised, so there were a number of, I thought, very effective seminars for companies about how to trade. I was very surprised that there is an Aberdeen technology company called Caledyn, whose opening I spoke at some 12 years ago. I was very surprised to discover that one of the Saudi-Arabian businessmen, the general manager of Safawi, who addressed one of our conference sessions, was the new owner of Caledyn having bought it over Christmas. I thought that one of the interesting things was the way in which trading investment is flowing in both directions. I was also struck, and there were clearly other Aberdeen companies like Asco and Rayburn there that those of us, Dennis, I am sure, will know as well in the north-east, but I was also struck by a couple of the less obvious participants, Sarah Galbraith, who is a Scottish businesswoman, although based in Cheshire, I am there with UKTI, but she was there to seek work in training Saudi-Arabian women in taking lead roles in business. That is a very new departure in Saudi Arabia, and I think that it is very welcome. Angela Mathes was there, again, from Edinburgh, looking to promote high-tech solutions across a range of industries. I was struck by the fact that, although rightly, there was a large focus on oil and gas, and there are obviously opportunities there in oil and gas, I was struck by the broad range of interests and also the sign of some progressive change within the Saudi-Arabian economy, which is welcome. Just a couple of things. First of all, on behalf of the committee, I think that we should write to Hadi Fausal and thank him, because I do not think that we would have had the amount of access that we did get, especially with the Al-Qatani family, if Hadi had not made those arrangements. I think that, on behalf of the committee, we should write and thank him for that level of support. Secondly, it was clear from the Saudis that they were not interested in people who wanted to sell them standard products at a discount price. The term that came across very often was Saudiization, I think that it was, where they were fed up having had oil for 75 years, that they were not making more of the profit further down the line where the manufacturer was coming out. What they are looking for is companies who are innovative and who are willing to put down routes in Saudi to employ highly skilled Saudi individuals. The thing that frightens me and should frighten a lot of exporters at the moment is the development that is taking place in Jamal. We heard about the joint venture with the Dow Chemical Company of America, where there is a new chemical plant being built, which will be one of the most efficient in the world. It is coming on stream next year and it is costing £30 billion or something like that. It is in a situation where it will take the raw materials, produce the chemicals and then move on to the next stage of producing paint, plastics, the works to export abroad. Not only will a lot of companies who currently provide those items to the Saudi market will lose that market share, they will then have to compete with one of the most modern and efficient plants in the world that is being produced and coming on stream next year, which will eat into their market. It is a huge danger for a lot of companies. I should also mention briefly that two members, Gordon MacDonald, on Monday visited Grangemouth and we visited the fourth ports operation at Grangemouth and then met with WH Malcom, the transport company, which was a very interesting visit and that was done jointly with the ITI committee. It was very useful and I am sure that we will be reporting back on that in due course. We will now move into private session.