Fintech driving Scotland’s inward investment success
By Kevin Reynolds, Inward Investment Specialist at Scottish Development International
It has been an excellent past month or so for inward investment in Scotland.
As Scottish Government Business Minister Ivan McKee announced at the World Forum for FDI in Edinburgh in May, Scottish Development International (SDI) statistics revealed that more than 7,500 planned real living wage jobs had been generated by inward investment in FY21/22.
The figures showed that 113 investment projects were supported by SDI, Scottish Enterprise and its partner agencies Highlands and Islands Enterprise, South of Scotland Enterprise and Skills Development Scotland in the past financial year, 39 of which were investors locating in Scotland for the first time.
These excellent results were reinforced by the publication of EY’s latest Annual Attractiveness Survey, which confirmed that Scotland was again the most attractive location for inward investment in the UK outside of London.
EY’s figures showed that Scotland secured 14% more Foreign Direct Investment (FDI) projects in 2021 compared with 2020. This helped ensure that Scotland’s investment destination attractiveness was now at record levels.
And earlier this week, a new Department for International Trade report showed a substantial increase in both the number of projects and jobs created in Scotland due to inward investment in FY21/22, compared to the previous financial year.
So, these reports showed Scotland’s continued ability to attract inward investment is clear, with the country’s software, IT and digital sectors central to this success.
SDI’s results showed that one of the most predominant sectors for inward investment was Software and IT, while EY’s figures revealed that Digital projects in Scotland rose by 73.6% in 2021 compared to 2020.
In the past financial year, SDI supported many fintech firms choose Scotland for global growth. For example, Hong Kong cyber security company PolyDigi Tech continued to expand its presence in Edinburgh. PolyDigi Tech has been involved in several programmes designed to support innovative start-ups, including EIE (Engage Invest Exploit), and was chosen as one of the Rising Stars 4.0 Scotland regional winners, an early-stage tech scaleup competition organised by Tech Nation.
And the good news keeps coming. In May, Embark announced plans to hire more than 50 people in Dundee over the next few months as it continues to develop its presence in the city.
Meanwhile, digital finance company ClearScore recently announced that it intends to create an Open Banking Centre of Excellence in Edinburgh, creating up to 100 jobs over the next few years. SDI has been pleased to engage with both companies regarding their plans for growth in Scotland.
Looking ahead, our dedicated specialists based here and in more than 30 locations around the world - alongside our prestigious international networks such as GlobalScot - will continue to promote Scotland as a perfect place for companies to locate.
Using the Scottish Government’s Inward Investment Plan as our North Star, we will focus our activities on delivering projects in opportunity areas where Scotland is a genuine world leader. One of these sectors is undoubtedly Digital Financial Services.
Scottish Enterprise has developed a national programme on the digital economy, demonstrating our own commitment to digital scale-up. Scottish Enterprise also provides investment to the wider tech sector. For example, Scottish Enterprise last year invested more than £30m into companies in the sector via our co-investment funds, investing alongside local, national and international investors from seed through to series A and beyond.
But we know this will be a partnership effort. Our ‘Team Scotland’ approach, which sees public bodies, academia and industry working together to promote the very best Scotland has to offer, makes us stand out from the crowd. Businesses have told us that this joined-up approach is a key reason why they choose Scotland.
For example, both Scottish Enterprise and the Scottish Government have endorsed FinTech Scotland’s recently published ten-year Research & Innovation roadmap, which outlines a bold and ambitious commitment to fintech innovation in Scotland, playing on our key strengths in regulation, payments, climate finance, etc.
By bringing together start-ups, entrepreneurs, businesses and universities, we can create, co-develop and share knowledge, leading to more innovation that will help unlock Scotland’s economic potential.
Scotland’s financial services sector is rightly regarded as one of the leading finance centres in Europe. Our universities are world-renowned and the innovative technology scene in our towns and cities is second to none. When you combine these factors with our skilled workforce, Scotland is an irresistible proposition for fintech growth and development.
Scottish Enterprise is fully focused on transforming Scotland’s economy, as well as our journey towards a net zero future. Crucial to achieving this will be innovative sectors such as fintech. We look forward to continuing to work with partners across the public and private sectors, including FinTech Scotland, to ensure all our communities and regions benefit from the economic opportunities arising from fintech.