Aiming high: As we start to emerge from the pandemic, there are signs of economic optimism

In his first year in the job, Stuart Black, chief executive of Highlands and Islands Enterprise (HIE), has overseen the beginnings of the Covid recovery in his role at Scotland’s economic and development agency for the north and west of Scotland. 

 The organisation has been working with industries hit hardest by the pandemic, investing in the renewable energy sector, promoting net zero to businesses of all sizes, and creating new roles to help integrate people wanting to relocate to the Highlands and Islands. 

 More than 1,800 jobs were forecast to be created or retained as a result of HIE’s investments in 2020/21 (not including government Covid funds). And although this year’s annual report is yet to be published, figures are forecasting a further 1,500 will be created or retained from the agency’s investments in 2021/22.

Since taking over as chief executive in January this year, Black has visited seven of the eight local areas served by HIE in the past three months. He planned to visit Shetland by the end of August to see first-hand the development of businesses and the state of the economic recovery in their communities.  

Holyrood spoke to Stuart Black to discuss the work that HIE has done during his first eight months in post. 

Speaking on the progress of the Covid recovery in key sectors in the Highlands and Islands, Black says: “I think particularly in tourism, we are seeing some recovery. The numbers of domestic visitors are strong although understandably, the numbers of overseas visitors still haven’t recovered to where we were back in 2019.  

 “One of the trends, probably due to inflation and the cost-of-living, is that although there are lots of visitors around, they are fairly careful about how they are spending money. So, the visitor attractions aren’t quite seeing the recovery that they’d hoped for. And some of the areas of discretionary spending are reduced.  

 “There are also some challenges around staffing and recruitment in the sector. In terms of how the Highlands and Islands contribute to the national recovery, tourism is one of the main sectors for us. Food and drink processors, and particularly the likes of shellfish exporters, were hit with Brexit challenges but the salmon sector is going strong,” says Black. 

 “The Highlands and Islands are driving forward on renewables activity. We’ve had positive announcements; the Moray West Wind Farm got a contract that will help to create quite a significant number of jobs. There’s a lot of activity around Nigg, providing logistics space for the Sea Green Wind Farm off the east coast of Scotland.  

 “There’s ongoing investment in our port infrastructure. Stornoway Harbour has just embarked on its new deep-water port. It’s a £59m investment, and we’ve invested nearly £12m in that project. That’s now under construction.” 

Black says that innovation in traditional sectors has also proven to be a big success. “We have had quite a strong year in 2021/22 in terms of performance. Our investments last year are forecast to result in around 1,500 jobs being created or retained.  

 “One of the flagship projects we had was at Kishorn in Wester Ross, where Bakkafrost is running a four-year R&D project that will create 30 rural jobs.  

 “The whole Kishorn site is a good example of innovation. It was originally created as an oil yard, and it built one of the biggest floating structures in the world back in the 70s. Now it’s been reborn as a logistics centre for aquaculture. It’s also involved in renewables, and it has some oil and gas and decommissioning work. It is a good example of how innovation is happening in our region with previous assets now being used for renewables.” 

 The emergence of the Highlands and Islands as a hotspot for satellite launches is something that has only become a reality in the last decade, but Black is very excited about its potential. He said: “I was at the Farnborough Air Show this year and there is huge interest in Scotland. There are three potential vertical launch sites, and they are all in the Highlands and Islands.  

 “Already under construction is the SaxaVord space port, which is on the island of Unst in Shetland, and that has potentially three launch pads. And of course there’s Space Hub Sutherland, which will also be under construction in the near future.

“Right now there are very few launch sites. A lot of satellites were previously launched from Kazakhstan. That has become impossible to use given the situation with Russia and Ukraine. There are relatively few sites in the northern hemisphere. So, there’s huge interest in Scotland.   
 

“If someone had said ten years ago that there will be a space launch from the Highlands and Islands, I think most people would have been very sceptical, but now there’s a clear likelihood of one within the next year.”   

 Elsewhere, Black says there are positive economic signs across the Highlands and Islands. He says the marine industry has seen growth already this year with Mowi investing significantly, around £15m in its factory in Fort William and “significant jobs” being created in aquaculture.  

He says: “The University of the Highlands and Islands is creating a lot of work and interest. Particularly in the marine sector.” 

Black also details the importance of attaining net zero goals in the region: “The National Strategy for Economic Transformation has come into play in the last few months. It talks about cleaner and fairer recovery.  

 “On the greener front, we have employed a new head of net zero in the organisation. We are looking at our estate and our activities and making them as net zero as possible.  

 “We are also working with businesses, with input from the Scottish Government. We have the Green Jobs Fund, and we have already used that to good effect. We have helped a range of different businesses from tourism to timber around net zero and green jobs, helping reduce costs and increase efficiencies. 

 “We also have specialist advisors, we work with Zero Waste Scotland, and we’re doing things directly to help businesses make the transition to net zero, but it’s something we need to step up. We’ll be doing a lot more in the coming year or two. 

 “The other thing we’re doing is putting investment into areas where companies can save money right across the board, not just on environmental initiatives, but processing productivity improvements, particularly because labour supply is an issue now. So, companies are looking to try and be more efficient and to work with modernising plant and equipment and training their staff.  

 “We are probably seeing slightly fewer new jobs but higher paid jobs. That is part of our drive as well around fair work. From the first of April, we were the first of the three Scottish development agencies to introduce fair work criteria to our financial support packages. 

 “We have a ladder approach around fair work, and we’re doing something similar around net zero, where companies can progress in steps. Becoming net zero is not going to happen overnight.” 

Sustainability and regeneration are vital areas of work for Black’s agency and he describes the new roles of the settlement officers in places like Uist: “We’ve got settlement officer posts in some of our more fragile areas to try and encourage repopulation efforts. One of them recently started in the Uist area. It’s an area where the population has been falling significantly. 

 “Part of our role is to try and identify potential housing assets that could be used. There might be people who have second homes or family homes that they haven’t used for a while; can they be brought back into use for rentals? That’s part of the role.    

 “We are seeing people move into the area, bringing their work with them and the settlement officer can work with our colleagues in HIE and in the councils to identify opportunities, either for existing companies looking to recruit or people who can bring their work to the area. The general idea is to help facilitate moves back to these islands, in particular, but also some mainland areas such as north west Sutherland and parts of Argyll and Bute.” 

Reflecting on a busy start to his eight months in the job, HIE’s chief executive says: “I’ve been able to get out and about and meet the people and organisations that are helping the Highlands and Islands thrive.

“What I’ve seen is a renewed confidence, albeit there is uncertainty around things like inflation, energy costs and labour supply, which are some of the challenges, but we have lots of opportunities in this region. Addressing the remaining challenges around transport, housing, and digital connectivity in some areas, will unlock its huge potential.”

This article was sponsored by Highlands and Islands Enterprise. This article appears in Holyrood’s Annual Review 2021/22.