 with that information? Good morning. Welcome to this. 10 meeting in 2015 of theekenonome, energy and tourism committee. Can I welcome all members? Can I remind everyone pleased to turn off or at least turn to silent, all mobile phones and other electronic devices so that we don't interfere with the committee's at work? We have apologies from Johann LAMON, who is hoping to join us shortly. Item one on agenda. We are continuing to take evidence on our inquiry into internationalising The Scottish Business, and I'd like to welcome to give evidence Graham Blackett, who is the Director of bigger economics, and the author of a report by N56 on export-based growth, global competitive advantage from the Scottish brand, which was published in February. Welcome, Graham, thank you for coming along. We've got about half an hour for this session, so I would ask members if they would to keep their questions short and to the point. a ddweud hynny i ddim yn gwneud hynny i gael ar gael personnes ymgâltwch. Mynd i roi'r cyfletig, gan rherwydd yr adygwil gafodd o'r proses ac i'r ddwyng Llywodraeth, sy'n ddigonol yn ei gennychd a lefnodd, honi ni wneud hi ddim yn gwneud hynny i gael y model Gwyrddon. Fodd ni'n gwybod yn ddod i'r先er o fynd o'r pandeid. Fyhandd i ddod i'w ffawr o'r gwybodaeth honno ymddangbwyllol I think that maybe I could copy here in Scotland." Yes, there are probably many. Although I was the lead author of the report, we also worked with a team of international consultants, including a firm called Dамvad, who are of fact Danish, and Kaspar Leungard, who I worked with there led the process of the development of the Danish globalisation strategy. I think it was quite interesting about Denmark as in development economics we talk about getting to Denmark you know so it's often seen as you know the ambition in terms of what countries want to achieve but 10 years ago they thought they needed to do better and the globalization more generally was how they thought that they needed to do that. I think there's gonna be two main lessons we would draw from the Danish experience. One is the way they went about it ddwy'r proses Therefore, the Prime Minister chaired a group, but that group was made up of business figures, it was made up of your trade unions, what we would call the civic society, as well as public sector, they went through a process that lasted two or three years to identify how people wanted to see the country develop and what policies were required for internationalisation. That's one of the lessons. The other key lesson is that there's no easy answer to this. It's not like you can do one thing or two things and suddenly performance improves. In fact, the Danish globalisation strategy has a grand total of 350 policy measures on it, which I think maybe gives an idea about how complex it is. Many of those are not things that would obviously come to mind when you think about exporting. A lot of it is about education policy. That's because they recognise that productivity growth is really what it's about and that there's a strong correlation between companies that export and highly productive companies. When you think about it, it's fairly obvious because if you're competing in global markets, you need to be very productive. That's why it's good from a business point of view to look at exporting, but it's also good from an economic policy point of view because the most productive companies tend to be the ones that export. To export, you need to be more productive, so it drives economic growth. We've done quite a lot in this inquiry as a committee looking at the role of organisations such as SDI and UKTI and how they interact and the support that they provide. Do you have a particular view on how they're performing and what might be done to improve them? I guess that they have a particular role in helping businesses to understand market opportunities and helping them to introduce businesses to particular contacts that they might need to develop distribution channels. I think that they do a good role in doing that, but I think that I'll probably come back to the point about this being a much wider issue. While that's necessary, it's not sufficient in order to export. I think that the other thing to note about the organisations and how they tend to think about exporting is that there's almost a need for an attitude change. I think that a lot of businesses think that exporting is complex and sure, there are things that you need to consider like exchange rates, like cultural differences. But exporting is just about selling your goods and services to customers. If you think about it like that, you need to think about the complexities, so we have to be careful not to overcomplicate it. I think that the private sector has a role in taking forward the internationalisation of exports, such as the role of the SCDI or the chambers. I think that the private sector has a very important role. The people who benefit should be the people who drive things. We do mention a couple of areas where there is the role for the private sector in collaboration between different companies. Much of that is in practical areas like access to distribution channels. There are some larger Scottish companies that have very well-developed distribution channels in most countries in the world. It would be interesting to see whether they might be prepared to open those up to smaller companies, because there are potential advantages to both. Obviously for the small companies that provide a way into the market, but also for the large companies that allow them to offer a wider range of products to their customers. I heard some examples of some of the SMEs collaborating and coming together. For instance, if we look at Arran and their products from Arran, they will get together and maybe fill a container for shipping. It does happen, but I am just trying to tease it a wee bit. In terms of the role of SCDI or the chambers, we were in Aberdeen on Monday and were speaking to the Aberdeen and Shire chambers. They seem to get together with London chambers in taking their initiatives forward, for trade missions, but they do not seem to join up with SDI or UKTI. Why would you think that would be? I am not sure, to be honest. The company that tends to export, because you have a particular area of expertise, might be that you are the only company in your area or in your country that has that area of expertise. In terms of collaborating with people who are close to you, that might not be possible, so you might need to look further afield to find those partners. It could be that. It seems that we have a partnership within the private sector and the chambers, but they do not seem to engage in partnership working. It is there, but it does not seem to be joined up particularly well. You have the private and government agencies working together in a collaborative and co-operative way. Do you think that that is the area that you are referring to that needs to be a cultural change? There is certainly room for more collaboration, but it could also be that they are simply working with different sets of companies, so there is not always a need to collaborate. The public sector agencies may be working with companies that have less experience of exporting, whereas the chambers may be working with companies that have more experience in which case they are doing slightly different things. With reference to the SME sector, do you think that within the private area that is probably the route that they have the greatest potential, or do you think that the SMEs would have more opportunity working through, say, SDI or UKTI? I think that it is probably different for every individual company. For some small companies, it would make sense to tie up with a larger company that may use target at the same market with a different product, while for others it may be more sensible to group together with the public sector agencies. I think that it really depends on the product and service and the individual company. Your report follows hard on the heels of the report by the Wilson review into support for Scottish exporting, and I wondered just what conclusions you drew from Brian Wilson's study that informed your own work. We do not refer specifically to that, but I think that what we are saying is probably consistent with those recommendations, and I guess what we did rather than look at other work that had been done here as we focused on looking at the overseas examples, so hopefully both of those reports contribute something to the committee. One of the headline recommendations coming out of the Wilson review was around a single portal approach, a little bit in line with the question of public and private sector, but also the public sector agencies, UKTI and SDI, having a single portal and that being clearly flagged. Do you think that that is consistent with what you are saying about the way Scottish exporters are engaging with other people? I think that it is, although you have to be careful when you put those things in place not to increase the complexity in terms of the way it is implemented, so the principle is right, but care needs to be taken in implementation. And associated with that was a recommendation around access to export finance. Again, do you think that there is a specific benefit to be had from... Yes, that certainly a value could lead to access to finance is a broader issue, but for export... We have pretty sexport finance at the moment, and Wilson review is saying that a Scottish export finance is part of Scottish exports would be valuable. How would that, a question of a single portal approach, relate to your points around the brand and how Scottish goods for export are advertised? It might be an opportunity to find a way of realising the recommendation of the development of the brand. I think the examples that we looked at are set out in the report, but I think what's striking about them, particularly if you look at New Zealand and I think Finland as well, that what they did in terms of the brand, it wasn't like they got marketing consultants into designing a brand for them. We call that a realistic and authentic brand as required. They went through a collaborative process within their countries and invited companies and other organisations to contribute to the process about where they would like to see the country going and what they felt the country offered to the world and the brands were based on that. In the case of New Zealand, it was the idea of 100 per cent pure, and in the case of Finland, it was about providing innovative solutions for the world. The process is important. I guess in terms of looking at our existing strong export sectors, something like Scotch whisky or Scotch smoked salmon has got a very strong brand that's specifically a Scottish brand, whereas oil and gas services, for example, are sold on their competitive commercial basis rather than on the brand basis. Is that not the organic way that exports have grown and will continue to develop rather than trying to treat everything as if it was the same? Well, it is, but if you look at the areas of success and if you look at where a brand has been developed, and I think that Visit Scotland has done some good work in this area, and then you look at the analysis in terms of where Scotland is ranked by the various indices, we do very well in terms of our perception for tourism. I don't think that that's an accident that we have a very well-developed tourism brand and we do well in terms of our perception of tourism, but say an innovation, for example, Scotland doesn't rank ranks a highly despite the actual track record that we've got, it's not that well-known, and absence of any kind of brand idea in that area, I'm sure is part of that. Thank you very much. Your report references the success of the Irish approach in maximising diaspora links. Do you think that Scotland is doing enough to capitalise on its own diaspora? No, I think that that's something that we could do much more on, and the structures are in place. The Global Scot Network, for example, is there, and I think that we probably just don't make enough use of it. I think that there are many people around the world who would be very willing to help and perhaps are not as engaged as they could be. I think that we've been given some figures that show that there are quite a number of global Scots, because about 600, but the feedback that we're getting is that they're not particularly used. No, and I think that there's an information challenge there, and I feel like it's almost a matchmaking challenge to identify an individual who could help a particular company, but I think that more could be made of that. What's your view on high-profile events like Scotland? Can the US say, as a way to promote exports? I think that there are views on their own right, and I think that they're also important because they help to put the issue of thinking about export in the public domain, so we encourage businesses who don't currently export to at least think about it. The more of that sort of activity, the more businesses may be encouraged to think about exporting. There's been quite a lot of, you know, talk about UKTI and SDI. How do you think that agencies within Scotland work together to promote a Team Scotland approach? Do you think it's good enough? It probably isn't, no. It probably goes back to the discussion that was started on drawing on the Danish experience and how it's necessary to have a wide range of policies, so I guess every agency tends to focus on its own area of activity. If you're looking for export advice, you might well go to say SDI and they might help you, but if you identify a training need as part of your exporting strategy, it may be more difficult to access that help through them. Who should lead on that in bringing different organisations together? Maybe that highlights the need for an actual export strategy that feeds into the overall economic strategy. I don't think that there's a need for one agency or one organisation to be an overall charge, but something like that helps to co-ordinate and makes sure that every area has somebody with lead responsibility. Your report touches on the issue of freight terminals, which is something that I've raised before in relation to the submission that Professor Alf Baird gave to the committee. He makes the point that some without ports being privatised and you're actually getting a private tax on exports in some ports and in some ports the investment isn't there. Is that something that you think is a major problem? Yes, I think that it's probably part of a wider issue in terms of the need for more investment in infrastructure for the practical matters of trade. That includes freight ports but it also includes air links as well. Thank you very much. Reading through your report, I noticed that you stated that the UK's share of global trade has been declining in the value of UK trade is now lower than the average large advanced economy and well behind Germany. Meanwhile, Scotland's exports have been growing and Scotland's total trade volume is equivalent to 129 per cent of GDP. Given that Scotland is performing comparatively better than the rest of the UK, what would be the benefit of joining the Nordic Council? That was your recommendation 6, if I remember correctly. That recommendation is a bit like the point that was made about Scotland week. If we promote the idea of internationalisation more regularly, more people will think about it in their own circumstances. I guess we were saying what applies to businesses should also apply to the Government. While the per capita trade volumes for Scotland are higher than UK average, we would expect that given that we are looking at a smaller economy, they are well short of the average for a small advanced economy. In fact, we would need trade volumes to increase by about 40 per cent to match the average. Any strategy should be above average. By joining the Nordic Council, which I should say includes both devolved territories as well as independent countries, it would be possible to tap in some of the work that they are doing jointly. Particularly around the green growth initiative, for example, where they are looking at developing new technologies in energy in other areas, where there are opportunities to collaborate across countries. I guess it is almost back to the brand type issue. Part of it is about that, so that they get their reputation for being the place to come to for those new emerging technologies. If we were to join the Nordic Council, would there be any adverse effects on Scotland's other key markets, such as USA, France and our target growth markets of India, China and Brazil? All the other members of the Nordic Council would all export to those countries, which would suggest the answers now. My last question is about your recommendation 2. It says that continued access to global markets is critical with Scotland's continued membership of the European Union, providing the easiest access to markets. Why did you feel that it was necessary to make that a recommendation? Well, clearly there has been much political discussion over recent years about the membership of the EU, and it is just to make the point that, both in terms of access to European markets and through the EU's agreements with other parts of the world, that very much lowers the barriers to trade. If the position was to change, the barriers would come much higher, and it would be far difficult for businesses to export. I want to follow up on one point that you said in response to Mr McDonald's first question about the trade volumes from Scotland. Are you measuring trade that goes from Scotland out with the UK? We've measured both, but we've also looked at trades from Scotland with the rest of the UK, because when we're then benchmarking against other small economies, it's in order to compare. But when you factor in Scotland's trade with the rest of the UK, how do we perform then relative to other countries? Per capita, we're more than the UK, but about 40 per cent below, and if we took the oil, for example, out of it, then the gap is even bigger. I just want to follow up Gordon's point on Europe. Do you think that companies at the moment are reluctant to enter the potential market for internationalisation because of the uncertainty around the European question at the moment with the aspect of an in-out referendum? Do you think that that's a barrier for them at the moment? Clearly that's something that businesses will consider, but I'd be very surprised if any business said that they therefore wouldn't export. The reason I'm here today, and that last week when you were also holding a session on similar subjects, is that it was in Switzerland that they were going through a process of, let's say, a difficult negotiation with the EU, given the referendum that they had in immigration and the free movement of labour. But it doesn't seem to stop in their companies investing in exporting activities. I'll bring in Richard Lyle first. Yesterday we had a session on the cross-party group on the economy with Edas and Scottish Enterprise, and one of the three elements that we were primarily focused on was innovation. In terms of last night's cross-party group on China, the issue of culture and connectivity challenge was raised and the Chinese recognised Scotland's capability, apparently, to innovate. But we never seem to be able to transfer that technology. What do you think the universities are doing wrong, if they're doing anything wrong, not to translate R&D developments, innovation into marketable products? Do they understand, apart from selling education, the capability to transfer products and services other than education, which is very important? One thing that's worth saying is an introduction to that. If we look at areas of strength in terms of exporting, the university sector is actually one of them. There are very much global businesses today. In terms of innovation, I think what the universities do very well is they come up with the new inventions and the new potential products. I don't think that it's really the role of the universities to turn those into marketable products. That's the role of business. But Stanford and California does it? Well, the primary... Successfully. Stanford's done some work where it looked at how it impacts on Silicon Valley and what it finds is not so much the spin-out companies. It's actually the graduates who make the difference. What's happened there is the wider issue of how investment is secured and what's often called long-term patient finance, which I think is the centre of this issue. It's much more available, actually, often through. Despite the reputation for California Silicon Valley being venture capital driven, it's often public sector funds that provide that long-term patient capital. The same thing that you can see in Germany, where, again, they're very good at taking the ideas and turning them into successful companies, is because the finance is there and it looks beyond a two, three, four-year time frame and it's happy to look at a return over 10 or 20 years. I think that's where we have a gap here. But isn't the case that our universities, just comparing with Stanford, we have a philosophy that's nice to do but not nice to sell. The engagement in terms of equity participation, for example, by universities where they get cycle money and generate more funding for further R&D just doesn't happen. It happens, but not to the extent that Silicon Valley and I spent some time there. It's miles above all. I'm sure that we could learn lessons, but I think that this is where my own experience of working in other countries might come into it. The reason I've been in these other countries is because we're doing some work with the university sector. One of the reasons we were able to secure that work is because, in the rest of Europe, Scotland is actually one of the places that we look to in terms of how to do things. Particularly in the area of not growing the technologies but how you bring them to the initial market phase, how you get them out of the lab into an actual product. As I said before, what we're not secured at then has taken that and turned it into a successful company. I really think that's where the gap is rather than the regeneration of ideas where many people around the world think that Scottish universities are very good at that. You made an interesting point in the report about growth sectors and your view that the state or its agencies shouldn't be picking on particular sectors and will support them to export, and not others. Can you say a little bit more about why you've come to that conclusion? I guess from a business perspective, the reason that's sensible to export is because we're looking at a global market that's much bigger than a local market, and therefore it's possible to focus on the areas that you're really good at and where you're highly productive. It's very difficult then from a strategic point of view to pick the particular sectors, whether that might be the case, because there are public companies in every sector who can do that. So you think that companies should be neutral in relation to the sector that any particular company is in. They shouldn't prefer one sector over another? No, they should be preferences for high productivity companies. They might tend to be in particular sectors, but it's not an absolute thing. Okay, if there are no other questions, one follow-up. On that basis, why is the middle strand in Germany so successful? That's a good example because they cover many different sectors. I guess going back to your earlier discussion, what's quite interesting about them is that many of the founders of those companies were inventors who'd come up with a particular product. The reason they sustain is because what they tend to do is, as they go through the generations, they interact with universities in terms of pulling out the new product, and it tends to be based on engineering-type skills, but they're in all sorts of different sectors of the economy. And again, they take this long-term view about returns. Harry? Thank you. Good morning. Just to follow on, I suppose, from the convener's question about picking winners and your suggestion that that shouldn't really figure in the approach to this issue. Right through your report, there's a predictable and familiar focus purely on volume, on the amount of exports, on measuring the success of our exports in narrow metrics like GDP only. Surely it's important to think about the social benefit that Scotland receives and how the economy which is going to develop and the way in which it develops aligns with public priorities. It would be conflicting with current, even Scottish Government priorities, not all of which I support, if, for example, we saw export growth and in 56's goal of Scotland becoming the fifth richest country in the world or whatever it is, but with the bulk of that wealth being hoarded by a very small minority of people and becoming an ever more unequal society. That would be in conflict with the Government's national performance framework. It would be equally undesirable if we saw only the growth of forms of export which are environmentally or socially damaging in other countries or globally. Why is there nothing in your report that looks at the nature rather than the scale of export and how that can be aligned to public policy priorities and the social benefit that flows from it? The first thing to say is that I absolutely agree that those issues are important. It's almost a failure in how we measure things. What we've done in the report is picked up in the way that things are normally measured because that's how you can get the international comparisons. What I would suggest is increasing exports is consistent with the two particular issues that you mentioned because it's associated with productivity growth, which essentially is about more outputs for the same inputs, therefore increasing productivity. It's not necessarily the case, but it can be consistent with sustainable development and high productivity companies as well also provide, again, it's not necessarily the case, but it provides greater income and therefore the possibility to provide high quality jobs, reasonably well paid jobs because we're focusing resources in those areas we're best at. I mean, I would agree with the way you've expressed it there that these things open up the possibility. They don't necessarily create these social benefits, but it makes them possible. How do you think the Scottish Government, the UK Government and its various agencies can ensure that those social benefits flow from increased export and increased internationalisation of businesses rather than merely acknowledging of them as possibilities and crossing our fingers and hoping to luck? I think it's very difficult to ensure it, but I think the way to make it most likely is through to keep the focus on high productivity areas, and that's a mechanism that delivers both of those things. So if the focus of resources are on companies which are highly productive, then I think that that's the outcome that we get. I'm not quite sure that the history of what I would call late stage capitalism bears out that parallel, but could I just ask one final question on APD, which I don't think has come up so far? It's not mentioned in your report either. You talk about tourism to some extent and you acknowledge that there are current projections that that will continue to increase, including international tourism will continue to increase. You don't include any recommendation on APD either in relation to the Government's previous policy, its newly refined policy or any other option, so in general would you agree with Brian Wilson when he gave us evidence a few weeks back who said, I don't think it makes a huge difference from a trade point of view referring to APD, and he later said that it's not obvious to me that it's a deterrent to flying because flying continues to increase. There is such variation in airfares that prices are affected by factors other than APD. Would you broadly agree with that line of reasoning? Although we don't refer to APD in this report, N56 has previously recommended that it should be reduced or abolished because we see it as a barrier. It's true to observe that flying has increased anyway. It might influence where you fly to and it might not be an issue in terms of trading products, but it might be an issue particularly for a small company seeking to enter export markets for the same time, where they might be very cost sensitive and it could just make the difference in some cases. Brian Wilson is the previous spokesperson for the industry's attempt to lobby against APD's continuation and he told us, I'm not sure I would want to transfer APD to some other tax. If someone is going to be taxed to pay for getting rid of APD, it would seem to be more of a gesture and a substantial benefit. I still see APD as a barrier to the export that we could lower. If the effect is more export from highly productive companies, then the net effect can be positive in terms of environmental impacts. If it's high productivity. We need to call it a halt there. Thank you Mr Blackit very much for coming along and we'll have a short suspension now to allow that change over. Right, if we can reconvene, I'd like to welcome our second panel. We're joined by John Swinney, Deputy First Minister and Cabinet Secretary for Finance, Constitution and the Economy and by Jesse Laurie, who is the policy manager of the European Unstructural Fund division in the Scottish Government. Welcome to you both. Mr Swinney, before we get into questions, do you want to say something by way of an opening statement? If I make a brief opening statement, convener, the Government welcomes the inquiry that has been conducted by the committee on internationalising Scottish business. There is a clear relevance of this inquiry to our economic strategy, which, as members will be aware, is focused on the concepts of strengthening innovation investment, inclusive growth and internationalisation. Many of the issues that are raised by the inquiry will be relevant to our further consideration of these topics. Growing and diversifying Scotland's export base by helping Scottish companies to recognise and grasp international opportunities is essential to rebalancing the Scottish economy and improving long-term economic performance, and that concept is implicitly recognised and accepted in our economic strategy. The committee will be aware from its work on this inquiry that Scotland has many successful and growing trade links across the world. That has helped to increase Scottish exports by 20 per cent between 2010 and 2013, giving us confidence that we are on track to achieving our target of increasing exports by 50 per cent in value over the period 2010 to 2017. Although Scotland's overall export performance has improved since the committee's inquiry into support for exporters and international trade back in 2010 opportunities for further growth remain, the Government will consider the issues that are raised by the inquiry as part of that effort. There are challenges that face companies in undertaking international business activity. The Wilson review of support for Scottish exporting identified access to finance as the most significant barrier faced by SMEs seeking to turn themselves into exporters. The latest SME access to finance report that has been published today, which I believe has been shared with the committee, shows that Scottish firms seeking funding are finding it easier to access funding now than they were able to do so two years ago. The Government will be publishing an updated international framework, which will set out our strategic objectives as a Government to enhance our global outlook, to strengthen our external relationships, to build our reputation and international attractiveness and to encourage engagement with the European Union. The updated framework will set out how activity and support of those objectives will help to achieve our internationalisation goals. We are working on the production of an updated trade and investment strategy to build on the strategy that is in place from 2011 to 2015. We expect that to be published in the autumn, which will give us the opportunity to reflect on the issues raised by the committee's inquiry. We have about an hour and 15 minutes for the session, so I would ask members to keep their questions short and to the point, and answers short and to the point would be helpful in getting through the topics in the time available. I think that we want to look at a range of issues. I think that we want to look at the Wilson review and some of the conclusions from that, the role of UKTI, STI and other agencies, look at global Scots, look at the role of the universities and a number of other issues that I am sure will come up over the next others a while. I think that there is an interest in a number of members, which is the broad question of how all the Government agencies and other bodies will react. We have STI, UKTI, the Chamber of Commerce, SCDI, all of whom I have some activity in this field. I think that what we have picked up is a bit of concern about a lack of co-ordination. To give you an example, some members of the committee were in Aberdeen on Monday meeting Aberdeen and Grampian Chamber of Commerce, and what we found out when we were there was that they are currently running a trade mission for their members in collaboration with London Chamber of Commerce to East Africa, to Kenya and Uganda. More or less concurrently, STI is running a trade mission to East Africa, to Mozambique and Tanzania. In effect, those two are in competition with each other. The STI trade mission attracts a degree of public funding and a degree of support to its participants. The Chamber of Commerce trade mission does not. But surely there is a need for better co-ordination here. It does not make sense to have two separate organisations running trade missions to the same part of the world at the same time. What can be done to try and improve this? The first thing that I would say is that I welcome the contribution that is made by a range of different organisations to encouraging and supporting companies in undertaking export activity. In the four organisations that you listed, two of them are government organisations, two of them are not. The Scottish Government and the United Kingdom Government, for that matter, are not really in a position to say to organisations that are not governmental organisations that you have to do this or you have to do that. These are organisations that make their own judgments and they are welcome to do that and they undertake good and useful work. What I certainly think is important is that we have as much co-ordination as we possibly can do on the STI-UKTI activity. My sense of that is that the operational relationships work well. I am not writing letters to UK ministers complaining about things so that must be a reasonable measure that I think things are working all right. There is a co-operative operational relationship there. In relation to organisations such as STI and the Scottish Chambers of Commerce, we have regular discussions with both of those organisations. I saw the chief executive of the Scottish Chambers of Commerce just last week. We were talking about exporting an international activity. There are some areas of activity that individual chambers of commerce will wish to take forward and that is to be welcomed. It is a bit hard for me to commit to the committee that I can draw all of that together because these are organisations that have their own agenda and they are quite entitled to pursue their own agendas. As for your point about the trade missions to East Africa, I would simply make the observation that those are large geographies that we are talking about. Different countries that you raised, convener, are very large geographies with many opportunities. I think that it is unlikely that an STI trade mission is going to inadvertently bump into the Aberdeen-Gampian Chamber of Commerce trade mission given the size of the jurisdictions that are involved. There are not nearly enough business connections with that part of the world in Scotland so that we can encourage and facilitate the better. I think that we have had examples in the past of trade missions separately led. We heard a few years ago about Brazil where you had, in a short timeframe, two separate trade missions from Scotland, one of which led by a Scotland office minister and one led by a Scottish Government minister at more or less the same time. On that question, how much co-ordination is there between the Scottish Government and the Scotland Office of the UK Government in relation to ministerial engagement in trade missions? On the particular occasion, if I recall it correctly, convener, I would have to go and look at the absolutely precise transactional dates but I am pretty sure, if my recollection is correct, that we had a trade mission set up to go to Brazil and then the Secretary of State decided to have one too. I am making the point that there has been a little bit of history, particularly in the run-up to the referendum, where the Scotland Office was keen to establish themselves on some of this territory. If I can put it as delicately as that, that is for the Scotland Office to answer. I am not here to answer for the Scotland Office. They can answer for themselves, although I hear that they stand up committees on a regular basis. Generally, we have a limited number of trade missions. There are plans for ministers to undertake international engagement during this year in China, a likelihood in South America, perhaps also in Japan and Korea. Some of those will involve companies participating in those trade missions. Some will just be ministerial visits to try to encourage them to work with our people on the ground to try to expand the connections available and the opportunities for Scottish companies. In all those circumstances, we will have discussions with UKTI about the contacts that we are making. When I gave an example, last time I was in Korea, the first thing that I did when I arrived in Korea was to have a meeting with the United Kingdom ambassador in Seoul around the table where UKTI people, along with our SDI staff, were in exchange of information, points and contacts, because UKTI might be talking to some of the people that I am talking to with a perfectly orderly approach. Around that time, UK ministers were out in Korea undertaking from UK departments, from BIS, from... I think if my memory says me right, the Secretary of State for Energy was out around the same time in Japan in Korea. We work collaboratively to take that forward, but the type of... the Brazil experience that you set out, convener, I would hope, is the exception. So you believe that that's all in the past? Here's hoping. A number of members want to come in and follow up some of these points. I'll start with Dennis Robertson. Good morning. If I may just focus on the Wilson review at the moment, Deputy First Minister, Brian Wilson in his review suggested that we should probably go into an area of having a single portal to try and bring together what I think he described as a plethora of information that was out there. Go forward on the export Scotland brand. What's your view on the single portal and the recommendations about the export Scotland brand, and maybe just on the Wilson review as a whole? I think, generally, the more that we can make it convenient and practical for companies to access consolidated, authoritative information that can help them undertake their exporting activity, the better. So I think there's certainly merit in exploring the suggestion about a single portal. Where I would be confident is that if a company is interested in exporting activity and makes a connection with SDI, generally in my experience, although I'm sure there'll be exceptions that can prove the rule, those companies get a very co-ordinated, consolidated support service that enables them to enter a particular market. And SDI might not do all of it, but they will certainly weave it together in a fashion that is useful and helpful and practical to companies. Of course, in the committee has explored this issue, there will be a finite resource available to do such activities. Therefore, there will be companies who may not be able to access a direct SDI contact to get that market access. In those circumstances, the more we can do to join up information to make it easily and readily accessible, the better. Do you see that being the private sector bringing that together and owning it, or do you see it as a partnership between yourself and the private sector? I think that my view is that that should be housed by government and led by government and that we should be the anchor point for that. The final point that Mr Roberts raised in his earlier question was the question of an export from Scotland brand. I'm less convinced about that. We've got Scottish Development International out there. It's pretty well recognised within the marketplace. I would take a lot of persuading that we should tamper with that. In your general overview of the Wilson report? Generally, there's a pretty helpful range of suggestions there. I don't think that there's a silver bullet within it. I think that it's territory that we've explored and we continue to explore. The thinking that's in the Wilson review will be materially considered as we formulate our trade development strategy, which will be published in the autumn, as we will consider the output of this inquiry. You'll be aware that a group has been set up looking at the Wilson review and some of the recommendations. It involves the Scottish Office, Scottish Government, SDI and UKTI. The question that we haven't been able to get an answer to yet is who's leading this, who's chairing this group. We've asked quite a few times to different parties and although the group's been set up and they've had meetings, no one seems to be able to tell us who's actually chairing it and who's taking it forward. Will you be able to enlighten us on that one? I've read the transcript of your session last week and I appreciate that it was far from clear from the dialogue who was chairing it. I'd encourage the committee not to be fixated by this point because this is a grouping of relevant players in this debate who are coming round the table to try to agree some common working. Who leads it is in my view. We've all got bits of this to lead. UKTI's got its responsibilities. We've got our responsibilities in SDI. I'm not sure what the role and purpose of the Scotland office is on all these questions because I think it's just duplicating effort that is going on. I don't understand what the particular values of the Scotland office role in that. However, the Scotland office clearly commissioned the Wilson review and is now convening the meetings to talk about how the Wilson review gets taken forward. We're not looking at an individual, but you're saying that the Scottish office is convening the meetings in a sense that they are leading it. No, Mr Roberts, I don't want words put in my mouth because I don't see what the point is of the Scotland office on this issue. I don't understand the value that's been added. I can understand the role of UKTI, the role of SDI and the need for those two organisations to work collectively and collaborate together. What the Scotland office adds to the party, I have no idea. That seems very surprising, our response, given that the Wilson review was commissioned by the Scotland office and this working party was drawn together by the Scotland office. Does that not strike you as quite a useful contribution to that? The commission of the Wilson review is a welcome intervention, but what the Scotland office did for that was to commission the Wilson review. This Government's got a trade and investment strategy. We've had one. We put one together in response to the last inquiry that was undertaken on export activity by this committee. It was for 2011 to 2015. We are reviewing that strategy to reposition that in the autumn of 2015. We've got this inquiry from this committee. We'll reflect on its conclusions, we'll reflect on the conclusions of the Wilson review. The point that I'm making about the role of the Scotland office is that operationally I cannot see what value the Scotland office adds to what I think is a perfectly good relationship between SDI and UKTI. Is it not more that you just don't like the Scotland office on principle and the fact that it's doing good things is just mild irritating and a bit of a distraction? The committee is asking me a question. What value do I see the Scotland office adding to the process? I don't see any value the Scotland office adds to the process. One of the things that we've heard in the course of taking evidence is that in the past Scottish trade missions have had support from both Scottish Government ministers and UK Government ministers. Are you indicating to SDI that you don't see added value in, for example, Scotland office ministers supporting missions where Scottish Government ministers are not doing so? There are plenty of UK trade missions that I've taken for you. What I'm trying to make is that this committee has looked at issues about duplication and added confusion and added complication. I'm simply making the point that things currently stand just now. I think that there's a perfectly good relationship between SDI and UKTI where we respectively take forward our interests and we're in touch with each other and we're talking about these things. We've also got the Scotland office mucking about in here. It's just an extra bit of the equation. What are they adding? Take, for example, a trade mission where SDI is organising for Scottish companies to go abroad and to promote Scottish exports. Scottish Government is not in a position to offer ministerial support. Would you encourage them or discourage them to seek support from a Scotland office minister to add value to that mission? SDI will be taking forward a range of organised trade missions where they judge that it's appropriate to do so and they'll make arrangements about where they think the appropriate ministerial involvement should be taken forward. Ministerial involvement is not required for every trade mission. In some cases, it's not appropriate for ministers because of the nature of the stage of discussions that we are in with companies and potential investors for ministers not to be involved in that process. There is a correct and appropriate opportunity for ministers to be factored into that. Not all trade missions have got to have a minister and it is not appropriate for all trade missions to have ministers. Completely except that point, I'm simply inquiring about the position regarding Scotland office ministers where SDI think they might add value. Do you have a line with them on that? I'm not aware of any circumstances where that's a risk. You're not aware of any circumstances where a ministerial involvement from Scotland office could add value to a trade mission. I can't see where that could be, because there are other trade missions that will be undertaken by UKTI that will involve UK ministers and Scotland office ministers, for all I know, if they judge that to be appropriate. It's not just a question for me. It's a question of whether UKTI sees any point in the Scotland office being there. Is that not a little bit territorial too? Are you more or less saying that Scotland office ministers are welcome to join UK trade missions but not SDI? If UKTI believes that they've got any useful purpose. But they're not part of the equation, in your view, for a Scottish trade missions organisation. I don't see particular circumstances where that's arisen in a practical or useful function. If I can move aside from Scotland office to UKTI and probe a couple of things there, one of the things we heard partly in relation to the Wilson review but also more generally was, we've heard in evidences around the merits of co-location of SDI and UKTI functions in overseas markets. Is that something that you think in broad terms, and not in every case but in broad terms, is a benefit to that co-working that you've described between the two agencies? There are benefits of that happening, yes. In terms of the further roll-out, and I know that you would like to see further SDI representation overseas, that's one of the criteria that you would consider in looking at options there. There will be areas where we attach a very high priority to market presence, and we will have a distinct SDI presence to enable that to be undertaken. There will be other markets where, when we are the best in the world, we will not be able to attach the priority to those particular markets. Therefore, some of the wider collaboration with UKTI becomes ever more significant in the process. It's something that brings some different helpful elements of co-location and there are benefits that arise out of that in certain circumstances and others where it makes more sense to have our own distinct presence. Finally, coming back to the community initial questions around public and private sector collaboration, I completely accept the point that you made in response to an earlier question that it's not for you to instruct Chamber of Commerce or SDI as to how to provide their services to their members. Do you think that there is more that can be done to inform and engage between the public and private sectors in export promotion? Yes, I think that there is. There always will be. As I said, I very much welcome and value the contribution that is made by the principle of the chambers of commerce and the Scottish Council for Development Industry. I would want both of those organisations to feel welcome partners in the process. Thank you very much. I have a quick supplementary question. Last week, the cabinet secretary, Guy Warrington, of UKTI, was in front of the committee and he had this to say, I have an excellent working relationship with SDI as we have with the Welsh and Northern Ireland Governments. If people talk about lack of visibility of UKTI in Scotland, that might concern how things are branded at the point of delivery. We don't sell our products actively as UKTI in Scotland and we rely on SDI to sell our product range, so to speak. A lot of the narrative in terms of this inquiry has been about single portals and branding. It struck me from what Guy Warrington said last week, that that is the way the relationship is working at the moment. Obviously, there is always room for improvement, but if we want a Scotland brand and a single portal, SDI is taking the lead in maximising UKTI services under its brand, is that the appropriate way to go about things? I agree with Mr Warrington's observation. That is how I feel about it. If I was feeling aggrieved about the way in which we are dealing with UKTI, I would be writing letters to UK ministers about it. I am not writing those letters. The way that Mr Warrington characterised that in the quote that Joan McAlpine has read out to me is how it works. It is a very pragmatic way of realising that we are able to co-operate and work with UKTI on the delivery of services from the perspective of the consumer. We should always think of this from the perspective of the consumer. The consumer meets somebody from SDI, the people who support you on exporting. Whether they are given a UKTI product or an SDI product is rather relevant to the consumer. What matters is that they are getting the right product. That is where the benefit of the current arrangements are put in place. UKTI have a forum for co-ordination between themselves and the devolved administrations. UKTI participates in that, and it is a perfectly good working model. Of course, there will be ways, but we need to look at that to make sure that it is working as effectively as it can do. Generally, my feeling is that it works well. Do you want to carry on with your other questions? The feedback that we got in Aberdeen and from other businesses that we have spoken to is that SDI is their main point of contact. To have to muddy the landscape further, we certainly use the resources of UKTI, but to muddy the landscape further, I do not think is what business we are asking for. If I could move on to asking you about the Global Scott Network, it is obviously highly regarded, but there has been some evidence that the committee has taken that perhaps we could be making a little bit better use of it. What is your observation of the Global Scott Network? I would say that there are two things about the Global Scott Network. First of all, it is a very good resource for us to have, because it is people who voluntarily make their contribution to helping to boost Scotland's international business activity. The second thing that I would say is that we could use that resource more and more effectively than we do just now. When I am out in different marketplaces, I do meet Global Scots who express frustration that they feel that they could do more. I can think of particular investments where either the original concept or connection of this possibly happening in Scotland has been the spark of a Global Scots intervention. I can think of developments where that has been the case. I can also think of developments where I have been in particular in marketplaces where I have been trying to persuade an opportunity to make an opportunity happen where Global Scott has been my ally. I can think of developments where I have been trying to make that case, but that is very focused, because that is on a particular investment or a particular deal, where we can clearly identify that this person would be a good ally to have in making that case. I think that that side of it works well. I do not think that that happens as comprehensively as it could. For example, I was looking at some material the other day about some of the work that some Global Scots had done to assist us in particular in marketplaces in making pitches, and that element of it worked particularly well. Is it perhaps because of a hypersensitivity within the agencies that are liaising with the Global Scots that they sometimes get the impression from the evidence that they do not want everyone bothering them all the time and that they are almost overprotected in a sense that that is why they are not used, or is it just because to use them requires probably a bit more input and work? It is probably a bit of both, that there will be a sense of, you know, these are generally busy people, so you do not want to be, you know, that there may be a particular moment where you need somebody and if you have chopped the door 10 times beforehand and they just do it at the time that you have maybe not used the resource appropriately. Secondly, there will be a lot of logistical work required in making this happen, but these are not decent reasons why not to use the Global Scots resource. I think that there is plenty of capability for that to be undertaken. Do you have any plan in place to rectify the weaknesses that you have identified yourself? That is essentially a recognised problem, and it is something that, in our dialogue with SDI, we have made clear that we want to see that strengthened, so I would describe it as work in progress. Do you think that high profile events such as Scotland week in the US, do we use them enough to promote exports, because I understand that there is not a trade delegation going out to Scotland week this year? I think that Scotland week is a slightly different exercise. I think that it is an awareness raising and a contact raising exercise, but there will be plenty of business connections and contacts made in and around Scotland week when it takes its course. The value of trade missions is essentially determined by the quality of the specific connections that can be made available for individual companies. When a trade mission is going to a marketplace, the success or otherwise of that programme will be determined by the quality of the engagements and contacts that are available for individuals to advance their business development purposes. For that reason, trade missions have to be focused on the needs of the individual companies that are participating, rather than on what Scotland week is, which is more of a general awareness raising of Scotland in which we use that to try to open up some new contacts and connections. Is there an argument to have Scotland weeks in other key target markets in the world, emerging markets, for example? There is certainly an argument for that awareness raising, but I think that I would want to consider further the merits of more Scotland weeks. They are quite resource intensive and we have to be very sure. What I am focused on is making sure that the contacts that we have, we use to generate economic benefit for participating companies. Do you think that we could improve on Scotland week then? Obviously, you are talking about it as an awareness raising exercise. As I understand it, there are quite a lot of different organisations that have claimed ownership of it in the past. Perhaps we could maybe make more of it. I think that there are a lot of organisations that participate. There is a business development focus about it. There are a lot of business contacts that I made during Scotland week, but it has a more general purpose than just simply being about business development. The culture secretary has made a particular effort to ensure that there is a very extensive cultural exchange programme. Of course, some of the cultural exchange programmes are the precursor to the business development contacts and programmes. I can think of a number of examples where the process of cultural exchange and cultural appreciation has led to business development directly as a consequence. There is a good avenue for development there. Is there more need to focus internally within Scotland when there are businesses coming over? It is more of a global and international market at home, so we take advantage of the conferences. In many respects, we should be doing more in a way that we are not having to go to other markets such as Asia, for instance, in Scotland week, but we should do more at home. There will always be a role for in-market presence. If we rely purely on simply encouraging people to come to Scotland, I just do not think that that is going to be sufficient to develop the relationships that we require to get economic returns. The committee is probably familiar with the fact that I take a particular interest in the Japanese and Korean markets. Part of what I do when I am in those markets is to call on some of the long-standing investors in Scotland, not particularly because we believe that they are about to make another investment but to try to make sure that they keep the ones that they have. That can be very fundamental. If I think about the Okai development at Cumbernauld, I made a call on Okai at a particularly difficult time for the company where they had a significant failing in their European business. It was leading them to consider the future of their Cumbernauld operation. I was able to make a call to the company. I pledged to them some joint working, which we were able to follow up with North Lanarkshire Council, which addressed the size and scale of their premises, which were unfortunately too big for what their current business model required. We averted a situation where we faced the loss of that entire facility from Cumbernauld. It relocated and took on a different scale and a different way of operating, but we were facing the very direct danger of losing that business out of Cumbernauld. That contact, call and relationship that was established was essential in ensuring that we delivered that continuity of operation for the Okai plant. Patrick Harvie. Thank you. Just to follow up on John McAlpine's questions on the global Scott network, no doubt it has value, but is that value not undermined if a member of that network ceases to be an ally as you described them and begins to attack and undermine Scottish interests or use their status and profile to abuse and bully Scottish citizens? Is there not a bit of weeding leading done there? I think I can think of one example that perhaps... I can too. I'm sure Mr Harvie and I are thinking of the same one. Obviously in a network of several hundred individuals there will be the occasional difficulty that we encounter, but I think on the whole that's a very good asset for us. The question is whether somebody should continue to enjoy and use that status as being part of that network? I understand the issue that Mr Harvie is raising, but from my perspective I think that the network in its entirety has a big contribution to make and I'd want to encourage it to do so. Do you want to ask another question? If I move on to the other issues that I was going to raise. I think that the Deputy First Minister knows that I've been interested in the Government's national performance framework since it was created. Although we won't necessarily agree on every aspect of the way that pans out, I see it as a positive step in terms of a broader range of economic indicators. How do we ensure or how does the Scottish Government ensure that the economic developments, the economic changes which arise from trade in particular and from internationalising our business in Scotland, contribute to the Government's wider economic priorities such as the social solidarity targets, such as the sustainability targets? How do we ensure that we don't just see a volume of growth of exports but that we see a quality of that economic activity which supports social and environmental and wider economic priorities than just growth? It's a very substantial issue and the way that I can best answer it is by indicating to Mr Harvie that the national performance framework and the policy framework that surrounds that should be utilised as a discipline on the particular developments that we try to pursue. We have to essentially ensure that there is a direct connection between our priorities and our commitments as a Government and what is done on our behalf in terms of the identification of business development opportunities. I think that that's probably the best way that I can answer that, that we have to make sure that there is that constancy and consistency of action between the policy framework and what is done in our name. Can you give an example of a way in which the Government's trade and export strategy attempts to ensure that our export contributes to the social solidarity target but the sharing of wealth in our society? A lot of our international activity is focused on increasing the value of employment and productive employment within Scotland so we have a particular focus on trying to encourage and ensure that we are successful in obtaining investments that will enhance the technological capability of Scotland and, by its nature, then improve the levels of remuneration and the levels of productive value of employment that we have in Scotland. I think that that's perhaps the best example of how we do that. Another example would perhaps be, if I again invest in my own experience, the largest proportion of my time in the Korean and Japanese markets have been focused on trying to pursue opportunities for investment around renewable energy, which obviously contributes towards our wider sustainability agenda, but then also on life sciences, which in life sciences employment by its nature tends to be higher value employment, research intensive and focused on improving wider health and wellbeing. Those types of investments and those opportunities would be central to the type of agenda that we would be pursuing. Those contacts that I'm making are based are essentially very well advanced in the communication chain that SDI personnel will be taking in individual markets. The other obvious aspect to this is the Scottish Government's climate change obligations. Just last week, we saw figures published by the Government indicating that the carbon footprint of Scotland has increased during the last year for which those figures refer, increased by 5.3%, if I remember rightly. A large part of that is around our consumption patterns, the outsourced emissions that are embodied in the goods that we import. If we export goods or services that have a high embodied carbon, that will contribute to our domestic carbon inventory. If we export coal, for example, because we're not burning it any more in Scotland after next year's, it seems most likely, then that will contribute to emissions on somebody else's inventory, but it will contribute to our carbon footprint. Do you agree in principle that the Government's export strategy and its goals about how we change the nature of economic activity in and out of Scotland needs to be closely aligned to the social and environmental priorities, otherwise it's going to fail to achieve the Government's stated objectives? I believe that alignment is there, and that was the foundation of my first answer to Mr Harvey's sequence of questions on this point. The adherence to the policy framework that supports the national performance framework is implicit in that process. On the issue about the calculation of carbon emissions, I think we've got to be careful that we don't double count here, because carbon emissions are somebody's responsibility. We, for example, will declare the carbon emissions for the consumption of goods within Scotland under transportation. The act requires two different approaches. One is about the domestic emissions inventory and the other is about the consumption-based, so that's the carbon footprint stuff that came out last week. You're right that there's an issue about double counting, but both these approaches are valid and important, and both need to be consistent with international pay. I think that the one caveat that I want to put into this is that we've got to be very careful that we don't double count here, because the climate change targets are generally viewed as very demanding targets. I think that if we start putting an element of almost requiring double counting into them, they'll be even more challenging than they were to begin with. The twin-track approach was agreed in the legislation. I appreciate that, but I think that in our analysis of all that, we have to be careful that we properly acknowledge the danger of double counting in some of that analysis. That's not to, in any way, escape from the fundamental obligation to meet the targets. That's very important. It's fundamental that we do so, but I just think that caveat has to be understood within that. I appreciate the acknowledgement of the need for alignment between trade policy and those wider objectives. I'm happy to leave it there. I wonder if I may ask three brief questions. The first question, perhaps, will involve Ms Laurie in terms of the European funding. You mentioned, Deputy First Minister, access to finance. There are three major European funds, which would help Scottish business. One is the COSMY fund, which would help small businesses to have them involved in export activity. There's a rise in 2020 programme for R&D and innovation, and then there's the 10T, the Trans-European Network Transport programme, of 26 billion euros. Are we happy that Scotland, and I know that Scotland Europe has done some work on this, but are we happy that these funds are widely enough known in the business community and how they might increase our internationalisation? We will want to ensure that that awareness is there. I suppose that, to answer the question, I'm satisfied that there will be perfect awareness about these issues. No, there will never be perfect awareness about all of these opportunities, but the Government will certainly be engaged. The European team will be well versed in these issues. We've been into the approach with different teams within the Scottish Government, and with our wider partnerships, and every effort will be made to maximise the impact of these funds within Scotland. The second question is somewhat related to that, particularly the last on the 10T networks. Clearly, we have to secure movement of business people, tourists and also moved products. If I may wrap three things together, the situation, first of all, on the passenger duty, and how, when you actually foresee a selling control of that in Scotland, the second one, which relates to the 10T, is the adequate investment in Scotland's ports and transport connections, and I know that's not both in the Government's gift. The last thing that is perhaps most contentious, at least for me at this moment in time, is the privilege and pleasure of working with some people in China to develop an economic friendship link between Dandong province and East Ayrshire, which was consummated in January this year. The main protagonist from China is planning to bring five fellow alleged millionaires back to East Ayrshire to look at the investment in April, but all their visas have just been rejected. Do you have a view as to what we can do differently in terms of making sure that that is not happening? It appears to be happening on a fairly regular basis. So is APD the port and transport connection an old visa issue? On APD, we would expect that the devolution of that power would be complete to the Scottish Government, sometime after the 2016 Scottish parliamentary elections. How far thereafter is not yet clear, but I imagine that I can see no good reason why that should be any later than shortly after the 2016 Scottish parliamentary election. In relation to ports, as Mr Brody highlighted, not all ports are under the Government's control or responsibility, but there is certainly very active investment in a number of different ports in Scotland. I have seen a number of these developments at first hand myself and they are very welcome and we need to encourage further that investment. On visas, I would be a matter of concern that people who wish to come here to invest are unable to get visas, so there has to be a very good reason why that is not happening in a more co-operative way, but without the detail of that. It appears that the last cross-party group in China where the UK ambassador to Beijing appears that quotas are it, no matter what the priority is, if they reach a quota. That is it, and anybody else beyond that. Earlier, we heard evidence from Graham Blackout of Bigger Economics and he helped to produce the N56 report, Export Based Growth, and that highlighted it in 2013, Scotland in a balance of trade surplus of £12 billion compared to a UK trade deficit of £34 billion. However, we also received evidence that 60 per cent of Scottish exports are dependent on just 100 companies. Is there concern about potential risk to future export growth by relying on such a small number of large exporters? I think that that is a danger for us. For that reason, we need to encourage more companies to become involved in export activity. If I look at the growth of export activity, a lot of it has been driven by the food and drink sector, and it is welcome. I do not complain about it, but it is a acknowledgement of fact. There has also been substantial growth in perhaps not so much growth, but the next large component is around refined petroleum and chemical products. There are two very sizable elements of our export profile. Obviously, the food and drink sector in that category will be a substantial part of it, but there will be a multiplicity of other enterprises involved. One of the interesting observations that I would make about that point in general is that, if I look at my own experience of being involved in different elements of the business development process for the best part of about 25 years in Scotland and starting off originally in the private sector, the challenge about business development 25 years ago and encouraging companies to become involved in exporting was that it all seemed very far away and very difficult to do. Now, with digital connectivity, my impression of the new start business community in Scotland is that virtually every one of them thinks they start off as a global player because the technology enables them to be a global player without really costing them very much money to establish themselves as just being there available on the internet. I spend a lot of time, as I think that the committee knows, with the new start business community in Scotland. I keep on talking to people who advertise their services through social media and then suddenly a message comes in and before they know it. I think that one example that somebody has talked about a week ago operates a web development company from a village in my constituency and an inquiry came in and he has ended up doing website designs for various companies in Los Angeles just simply because it is something that he saw in social media. What enables that to happen is good connectivity. It is what enables that to happen and vision on the part of those companies. The connectivity should really help to overcome some of the practical impediments that people might have felt were obstacles to them making progress on the question of exporting. On Mr McDonald's fundamental point, do we need to encourage and motivate more companies to undertake this activity than the answer would be yes? What is the Government's strategy to increase and support the number of companies, especially SMEs, so that we are less reliant on the number of large companies for exporting? A large part of it will be through the channel of SDI advice and support. A large part of it will also be around some of the other business development interventions that we make that encourage companies to think more broadly about what they are undertaking. The example that I cited about some of the new start business community, a lot of the techniques and tactics that have been talked about within that community are encouraging people to think about exporting without needing to rely on the specific support of SDI because that resource will be finite, however much money we put in that direction will be a finite resource. I think that making sure that we have that support well focused and well directed and ensuring that we have the new start community focused on encouraging companies to participate in this way are a couple of the steps that we can take to assist in this respect. A couple of weeks ago, Ian McTager of SDI said that Scotland benefits from many successful and established businesses that have done it all themselves. Although they are now beyond the need for government help, they are willing to contribute something back to the debate. How does the Government intend to take advantage of this goodwill? I think that that is a very helpful practical suggestion. There are certainly very clear mechanisms by which we can enable that to happen. A lot of it comes back down to the co-ordination of all of that effort because by its nature it is disparate and diffuse. We have to find the practical ways in which we can encourage companies to make those offers and to assist. Probably the most effective way to do that would be in direct company to company activity so that successful exporters that do not require government support are able to share their experience and expertise with other individual companies. The chambers of commerce are well placed to try to support some of that activity into the bargain because of the fact that they have direct company networks in almost all the qualities within Scotland. We heard evidence from the Scotland food and drink of the benefits of an industrial-led approach. Given that you have already said that SDI has the resources, it is finite. We have heard of a number of companies that have been successful in exporting without SDI support. In terms of UKTI, Daniel Kazinski MP was looking at the effectiveness of UKTI and said that much of the evidence from the Institute of Chartered Accounts and Things in Wales called the knowledge among the business community of UKTI worrying that 81 per cent of large companies that export and 69 per cent of SME exporters are not familiar with UKTI. Given that many companies have been successful without either SDI or UKTI support, should we not have a more industrial-led approach to exporting? I do not think that it is an either or. If I look at the performance of our export figures and the fact that food and drink has comprised such a proportion of the increase that we have been able to undertake, I would ascribe a lot of that to the endeavour of Scotland food and drink. When I go around the country, I get strong and positive feedback about their effectiveness. I do not think that it needs to be an either or. We should encourage and motivate different industry-led organisations to play a part in the activity. Of course, we have an extensive amount of existing industry dialogue through the industry leadership groups that Scottish Enterprise convene, of which Scotland Food and Drink is one. There is an invaluable amount of experience and knowledge that comes from that industry dialogue that then shapes the priorities that we take forward as a Government and as an organisation through SDI to ensure that we are acting on that. The best available industry intelligence. My final question is the N56 recommendations in the report. Recommendation 2 was that continued access to global markets is critical with Scotland's continued membership with the European Union, providing the easiest access to markets. What is the Government's view on that recommendation? I think that our interests lie in remaining full participating members of the European Union and that will be the Government's position. OK, thanks very much. One of the questions that I made to Gordon MacDonald and to which you alluded, Deputy First Minister, that one of your constituents had developed a website for someone in Los Angeles. I don't wish to incur the wrath of the convener whose antipathy towards French is now well known. I wonder if there might be a suggestion that we encourage the capability of translation into foreign languages or websites, because we could do that. It's not so much a question as a request. It's undoubtedly an opportunity that could be pursued. Thank you. One of the messages that we've got so far has been the importance of co-operation, which I think that the Deputy First Minister would support. In that light, I wonder what your view is or what could be done to support colleges and universities who themselves have developed international links to ensure that local businesses with their located benefit from that. In one locality, the college has many links abroad. When they are hosting events locally, how could that be taken forward? Do you see a role for government in that? Secondly, in relation to cities in particular driving and supporting internationalising businesses, what work has the Scottish Government done to support that or to encourage that? On the first point about further and higher education institutions, I am completely supportive of the point that Johann Lamont makes. The higher and further education communities are actively involved in international markets and the recruitment of students as just one example, but there will be other examples of international collaboration. I think that there's a fine balance to be struck between enabling those organisations just to get on with it because they need to do that for the purposes of their own recruitment operations and purposes. I think that what I would be keen to do, and this will be part of what we explore in our international strategy, is how we can encourage various players. It's not just about higher and further education institutions to go to Gordon MacDonald's point. There will be some companies that are very actively involved in the promotion of Scottish products overseas that we try to ensure that we are broadly communicating the same type of message about Scotland so that that's helping the general knowledge and awareness of Scotland and the business opportunities that can be pursued in Scotland as a consequence of the presence in different markets by further and higher education institutions. I think that there's a job of work and I have to say that the institutions themselves are very open to that discussion and that dialogue and that's very welcome. In relation to the second point on cities, a lot of the channel of our discussion with the cities is really through the cities alliance. I can't give John Lamont a detailed answer about any specific city-based marketing efforts other than the fact that I know that there is dialogue through the cities alliance. It's crucial from an investment point of view that if we are out in a marketplace trying to encourage investment in Scotland that we have the best possible awareness and perspective of what the cities can offer in that process, it's important that that message is reflected in what we share and communicate more widely. I wanted to follow on from that point. Brian Wilson makes the point that we have multiple brands with multiple identities in relation to business. It's very obvious that Glasgow has a particular pitch. For example, the Hebridean brand, whether it's Stormy Black, Pudding or Aris Tweed, can be very strong. Equally, the UK and the Scottish brands are very strong. How do you see the agencies for which you've got responsibility, recognising those different brands that they're not necessarily in conflict with each other but give a space for those different brands to be given support internationally? I think that it's about making sure that we have a proper reflection of the strengths of Scotland so that those different characteristics are able to be visible to a wider audience. I don't think that there's anything necessarily that is in conflict. We just have to make sure that there is enough appreciation of the particular strengths that we have to offer. One of the questions that I answered earlier on was about the point about focus. Given the vastness of the world that is out there, the more focused we can be about what it is that we're actually going after, the more chance we're going to have of finding it. Engaging in a dialogue with the cities or with an industrial sector or with individual companies about what it is that they're trying to achieve will help to inform the work that SDI can take forward on behalf of those cities or in collaboration with those cities or those companies or those areas of the country to make sure that we maximise the value and effectiveness of that contact. How do you see collaboration and interest in some sectors across the United Kingdom? How do you see that? For example, let me take life sciences for example. There's a lot of collaboration between the Scottish Institutions on Life Sciences so they've created a Scottish Academic Health Sciences Alliance and they are prepared to essentially market, come to Scotland, this is what you get on life sciences. It's a very formidable proposition involving the Edinburgh Bay Quarter, the Beechwood campus at Inverness, the medical school in Dundee, the new South Glasgow hospital in all of its connections with the university and the developments in stratified medicine. It is a very strong and powerful proposition. I'd have to accept that there's a competition between that proposition and other propositions within the United Kingdom that would be offered. There is there a competitive tension because if there's a life sciences investment to be made by Japan somewhere around the world, we want to get it and what we will try to do is minimise the areas of competition and encourage the areas of collaboration within Scotland as effective as we can. I think it's difficult for us to do that right across the United Kingdom. If there were individual businesses who recognised that they had a common interest in their business across the United Kingdom, is there a role for the Scottish Government and its agencies to support that? I think that one of the big messages from businesses at one level support us but don't get in a road and I wonder what you would see as would there be a role for SDI in supporting that collaboration? I take your point about competition but there will be other areas where it is clearly the interest for a pitch to be a UK wide one. I think that I'd come back to my answer to Joe McAlpine's point that when a company comes to us and talks to SDI about what their perspective is and what their horizons are, it might become apparent that there is a partnership involving a company somewhere else in the rest of the United Kingdom and the UK-Ti connection is how we'll join all that together and make it happen. Therefore, as a consequence of a collaboration with a Scottish company in England as a joint proposition to an international marketplace, that would be facilitated and put together by SDI and UK-Ti working together. I'd be confident that the arrangements that we have in place would enable that to happen. This week about the North East Scotland trade group where Aberdeen Council, Aberdeenshire Council, Chamber of Commerce, SDI, Scottish Enterprise, UK-Ti, the universities and some see UK all work together and share agendas, share information and some of those collaborating missions. Is that model from Aberdeen one that you think could be usefully and successfully applied in the case of other cities or other parts of Scotland? I think actually to be honest that captures in a sense some of the response to the point about this all needs to be joined together and co-ordinated and all that goes with it. I think that's a very practical manifestation of how that happens because every one of those players has got a role to perform. If SDI is out in an international marketplace it comes up with some great idea and they come back and they say to Aberdeen or Aberdeenshire Council that they would like to get this and the council say sorry, we've not got the land for it or Scottish Water can't provide the connection for it. We've got to get these things to be fixed to make that happen. It's a perfect example of how that collaboration can work effectively. Excellent, and another thing that we heard from SDI this week was a community of practice to establish for example a single calendar of international market events across the public and private sector. Is that again on a Scotland-wide basis something that the Government would support those discussions? Yes, and it would perhaps help to avoid the type of circumstances that the convener talked about if that actually was a problem that we had two trade missions going to the same continent, albeit that they were going to several big countries in a very large continent. Thank you. Good morning, Deputy First Minister. You actually have covered some of the points that I was going to ask you, but can I go back over in regards to co-location? We've heard through businesses, SDI, UKTI and the benefits of co-location of offices in overseas markets. It's my view that we partly own the UK embassy network, but we don't use it to a full advantage. In some, and you were on about global Scots, and you were on about the factor of going to African countries where different we may not be totally located. Do we have any plans to increase overseas offices in co-location in UK embassies? Do we have any resistance to that, or do we intend to follow up and see if we can actually improve and take on more offices? Obviously, we keep under review the locations of the offices that we undertake. There have been expansions of the office network, and the presence of SDI personnel in India and Asia today, compared to five years ago, will be a very significant change. Those issues are kept under review, and as part of the international trade strategy that the Government looks at, we will explore those questions further to determine whether we have the right locations. On the question of whether we have any resistance to joint working and co-location issues, I'm not aware of any that we have. Certainly, in my experience, I've had events arranged within British embassies around the world that I've hosted, with the collaboration of the relevant ambassadors. They've been perfectly acceptable and well-organised in productive events. Mr Lyle raises a fair point about whether we use those enough, and that's perhaps an issue that we have to expose to whether there could be more opportunities taken to try to use those resources that are clearly there. As I've said, I've had a number of events around the world that have been held in UK embassies, and they've been very successful events. We should consider that further as part of the development of our strategy and our plans. I certainly welcome that, because I believe that we have the power to be on them. What other assets can Scotland use to support Scottish businesses? I think that some of the answers would go back to what I said, or the issues that were raised by Johann Lamont in our question, that I do think that we have a lot of organisations, well, Johann Lamont and Gordon MacDonald's questions, with a lot of organisations either hiring further education institutions or companies that are out in the marketplace. Along with global Scots, I think that if we just worked more collaboratively and collectively with all of those three areas of activity, we could supplement significantly Scotland's international presence. Is there any other points that you would like to see this committee pursue in regards to this inquiry? I think that the key questions that affect us here are how can we achieve focus in our international activity, because you could spend a lot of time generally raising awareness of Scotland around the world. Ironically, I think that we have done a pretty good job of that over the last 12 months by the combination of the Commonwealth Games, the Ryder Cup and the Referendum. I think that there will be generally wider awareness of Scotland around the world. I think that what is essential in all of this is that we have got very focused efforts to produce economic benefit as a consequence. If you look at the universities and colleges, they are very focused on the markets that they approach to try to recruit students and encourage them to come to this country. If I look at the business development choices that we make, we are looking at marketplaces to identify where do we think are the synergies that we need to develop. My visits to Japan and Korea have predominantly been about food and drink, life sciences and renewables. They have not been a scattergun about Scotland. They have been very focused about trying to encourage those investments and those business opportunities. If the convener can allow me a last question and you mentioned Japan and Korea several times and the efforts that you are putting in and thank you for what you have done for OKI in Cumbernauld in my region, are there other countries that you think we should develop links with that you could or other ministers could develop links with? Other ministers do that. I cite the Japanese and Korean examples because we have taken decisions to try to establish as much continuity in ministerial dialogue as we can with particular markets. I think that that helps to build up relationships. The former First Minister regularly visited China and built up sustained relationships. Those will be taken forward by our new First Minister. Hamza Yousaf has been active in the Pakistan market in the Middle East and has built up substantial contacts in that respect. Fiona Hyslop has been active in many European markets, particularly in Ireland. Fergus Ewing has been a significant involved given the nature of his responsibilities for the oil and gas sector in the United States, although I have also had a presence in the United States, as have the former First Minister and Fiona Hyslop. Across a range of different ministerial portfolios, we will pursue individual markets to enhance the work that is undertaken by SDI. Can I just ask one last question on the issue that we haven't touched on yet? It reflects some of the evidence that we have had as a committee about the support for Scottish companies. It relates to the broader issue that the committee has looked at over a period of years about Scottish Enterprise and HIE support for account managed companies. We have heard about SDI, which has supported 6,000 companies since 2012. A lot of those have been account managed companies or within priority sectors. The evidence that we have heard from SDI and the Chamber of Commerce expressed some concern that this would mean that not every Scottish company would get the support that they needed. The best way to do that is by making sure that we have a presumption in all of the business advice that we undertake that is encouraging that every company gets the support that it needs, even if it doesn't meet those criteria. The best way to do that is by making sure that we have a presumption in all of the business advice that we undertake that is encouraging and supporting companies in undertaking export activity. I appreciate the issues that the committee has explored about the account managed system. I have confidence in the account managed system as giving the appropriate deep support to companies, to a system in their business development. We have seen the fruits of that in the returns that have been generated to the Scottish economy. However, every company in the country is able to access business development advice through the business gateway. We have to make sure that the business gateway is sufficiently equipped to provide every organisation with the foundations of how they may be able to take forward export activity. I come back to one of my earlier answers about the atmosphere that I detect within the new start business community in Scotland. Some of it is coming out of the business gateway, some of it is supported by organisations such as entrepreneurial sparks, some of it is supported by the Women's Enterprise Network, or Women's Enterprise Scotland, I should say. All of those organisations have an emphasis and an element that is focused on exporting an international business activity. I think that it is that approach that makes sure that every company can get access to some of that advice. If those companies, who are not account managed, have gone through business gateway, if they are identified as having the necessary characteristics and strengths that could make them a successful exporter, then the mandate to SDI is that those companies have to be supported. That gives us reassurance that we have the arrangements in place that can do that comprehensively. That concludes our session on behalf of the committee. I thank you both for coming along and assisting us with our inquiry. If I could ask members just to stay in their seats just for a moment for the next item of business, which is the last item in public this morning, we have an item of subordinate legislation to consider. This is the bankruptcy miscellaneous amendment Scotland regulations 2015, which is a negative instrument. Do members have any questions they wish to raise in relation to this instrument? No, in that case, our members are content simply to note that instrument.