Why Scotland Inc is rolling out the red carpet to world

It’s one with relevance to Scotland, sometimes accused of being backward in coming forward about its undoubted strengths as destination for investment, in spite of the efforts of Scottish Development International and the UK government’s “Brand Scotland” campaign.

But this week Scottish Financial Enterprise (SFE), the industry association for financial and professional services, together with the City of London Corporation, set out to dispel that image by hosting a first-of-its-kind “Global Investment Summit” in Edinburgh.

In a long career in financial journalism I’ve attended my fair share of events like this in various parts of the world designed to big up the host country’s credentials as a place to park investment dollars.

Yet while it was not quite on the scale of a similar summit held by the UK government in London this time last year, it did feel like the longest stretch of red carpet to have been rolled out by Scotland, Inc, for a long time. (Full disclosure: I moderated a panel at the event.)

And they came, too. Among the roughly 300 attendees, at least 100 were big investors. Among them were sovereign wealth funds such as Abu Dhabi’s Mubadala; Asian banks including China Construction Bank and OCBC, Singapore’s second largest lender; the Alberta Investment Management Corporation from Canada; and the Kuwait Investment Authority. Saudi Arabia sent assistant minister for investment Ibrahim Almubarak. Home town investors included Barclays, Aberdeen, and NatWest, at whose Royal Bank of Scotland Gogarburn campus the main session was held on Tuesday.

At a dinner the night before in the Georgian splendour of The Signet Library off the Royal Mile, Bank of England governor Andrew Bailey highlighted opportunities in Scotland including in commercial space and renewables, quipping he hoped that “a Sassenach like me can do something to help develop these opportunities”.

There was much talk of rediscovering Scotland’s ambition, with Alastair King, Lord Mayor of London and the SFE’s chief executive Sandy Begbie – the summit’s co-architects - urging Scottish businesses to “get on planes and kick down doors” to persuade investors to part with their cash.

So, why go to such lengths in this way now? Scotland already scores well in attracting inward investment. Consulting firm EY said in June that a quarter of global investors planning to establish operations the UK next year expect to choose Scotland, second to London.

The answer lies globally in the intensifying search by the world’s largest investors for reliable, long-term returns in stable jurisdictions, as well as something called geoeconomics.

Pension funds are scouring the globe for the kind of investments that will guarantee long-term cashflows to fund their pension annuity obligations back home. Often this means things like infrastructure and energy, which require huge amounts of capital committed over the long periods needed to build and operate projects – like offshore wind, a Scottish strength.

Moreover, in a world that’s been fractured by trade wars conflict and supply chain disruption, investors favour regions offering stability in world of increasingly febrile geopolitics.

“Sometimes when you live in a place, it doesn’t seem that stable,” Keith Anderson, chief executive of Scottish Power, told the summit. “But when you look around elsewhere the UK is pretty stable.” This week, his company’s parent group, Iberdrola of Spain, said it would be investing £10 billion in Scotland, out of a total €58bn allocated to the UK, much of that in upgrading grid and transmission networks.

Investors are also now having to respond to forces driven by domestic policies rather than the post- world-war two “Washington Consensus” around globalisation and borderless trade. Trump’s “America first” tariffs and attacks on green technology are the clearest expression of this geoeconomics trend, which has triggered a generational rethink on capital allocation, some of it away from the US.

“There’s demand internationally to do a bit of rebalancing and international investors are helping to shift the story,” said Sandra Boss, chair of US asset manager BlackRock’s UK business, which last month officially moved into expanded premises in Edinburgh. “When we look at the global picture, we are very pro-UK.”

The Scottish capital will soon be the firm’s fourth largest presence globally by staff numbers. Scotland also checks the box on fintech and AI, and life sciences. Day one of the forum involved presentations at the Edinburgh Futures Institute by a handful of local startups including Amiqus, a digital back-office compliance business spun out of Edinburgh University’s Edinburgh Innovations commercialisation service, which has produced 64 spinouts this year alone.

“We’re finding Scotland to be a pretty rich hunting ground,” Douglas Hansen-Luke, executive charman of Future Planet Capital, an impact investing firm, told me. Included in its portfolio is Roslin Technologies, another Edinburgh University spinout that was granted a patent two months ago for a process to create self-renewing stem cells from pigs – a world first.

However, it was not all self-congratulatory backslapping. Darren Jones, UK minister of state for intergovernmental relations and chief secretary to the prime minister, abandoned his scripted speech at the last minute, inviting instead questions from the audience.

One was about how the UK government could accelerate planning. Someone else asked how long-term investments could be depoliticised in the current climate of anti-net zero rhetoric from populist politicians. Chirantan Barua, the Indian-born chief executive of Scottish Widows, drew applause after describing the experience of arriving off flights at Glasgow and Edinburgh airports as “like something from the 1980s”.

Curiously absent from the two days was mention of Scotland’s tax rates, often cited as a barrier to further entrepreneurship and investment. One for a follow-up summit, perhaps.