Associate Feature: Aiming High

It has been two years since Scots last celebrated a normal Hogmanay, as the unpredictability of the Covid-19 pandemic reared its head once more in late November through the emergence of the Omicron variant. Nonetheless, Highlands and Islands Enterprise (HIE) has been able to mark the start of 2022 with a first footing of sorts.

In early January, the economic and community development agency welcomed its Moray area manager Stuart Black into his new position as chief executive. The New Year gift that Black brings is a positive vision in which the Highlands and Islands region capitalises on its natural advantages, as economies around the globe rebuild from the pandemic towards a net-zero future.

“I’m optimistic about the future for the region,” Black says as he sits down alongside HIE chair Alistair Dodds to speak to Holyrood. “We’re a net-zero transition region, with a huge number of talented people and the industries of the future. If we get the right investment, across both the public and private sectors, we’re really in a very good place. Ultimately we are aiming to be the partner of choice for both public and private investment alongside emerging businesses in the region.”

The medium to long-term viability of that ambition was underlined recently when HIE was among the signatories on the £100m Moray Growth Deal, a 10-year commitment led by the local authority and involving local partners and both the UK and Scottish governments. The agreement will secure ongoing support for projects that create opportunities to build on the local economy. It adds to deals already in place for the islands (northern and western), Inverness and Highland, Ayrshire, and Argyll and Bute.

The geography of the Highlands and Islands makes it an ideal candidate for investment into the aforementioned ‘industries of the future’ – the space industry, life sciences, marine economy, green hydrogen and offshore wind energy.

As Black highlights, the region is host to four active space launch site projects – in Argyll, the Western Isles, Shetland and Sutherland – boosted by its northern latitudes offering excellent access for low-Earth orbit. Of these, HIE is most heavily involved in the Space Hub Sutherland (SHS) project on A’ Mhoine Peninsula through a partnership with the UK Space Agency. HIE itself has committed £9.8m to support the project, which received planning permission in August 2020 and is estimated to create up to 250 jobs across the region. Once active, it is anticipated to boost the regional economy by £56m per year in less than a decade.

SHS is intended to form part of a far more extensive space industry in the Highlands and Islands, with launch capability from multiple locations in the near future supporting opportunities in space-related design and manufacturing, supply chain and data analysis, including climate monitoring. In line with net-zero ambitions, the Orbex Prime project launching from SHS will involve lightweight vehicles powered by low-carbon biopropane and feature components being recovered and used for multiple launches, Black says.

Each of the four sites also offers the potential for partnerships across Scotland and the UK, including with the University of Strathclyde’s space cluster. The knock-on effects are already acting as a catalyst for related businesses. Indeed, Black points to the 60 jobs created by Orbex building satellite launch vehicles at its new rocket design and manufacturing facility in Forres. He indicates the local impact with a reference to a “young man, who used to work in the supermarket and is now helping to build parts for rockets”.

“The four launch projects in the region are looking at different aspects of the space industry,” says HIE chair Dodds. “They are complementary in that they are different types of launch sites – vertical and horizontal – and for different sized rockets. That’s really important because we’re talking about some of the most remote areas of the region, with real population and job creation issues. You now have young people studying aeronautical engineering at university who know all about the Highlands and Islands. That’s exactly what we want – to be an attractive place for young people.”

This forms a key part of plans by the agency – and the region as a whole – to tackle challenges of depopulation and both retain and attract ambitious young talent. “The emergence of remote working amplifies the viability of the region as a very attractive place where young people can live and work,” says Black.

In the decade since the University of the Highlands and Islands was formally established, the region has been home to growing life sciences and marine economy industries. To this end, HIE recently partnered with the university to develop a 2,500m2 life sciences innovation centre that is currently under construction in Inverness and approved £4.5m of investment in the expansion of the European Marine Science Park at Dunstaffnage near Oban, where a host of firms are capitalising on local research expertise and access to biodiverse coastal waters.

Elsewhere, and with COP26 still fresh in the memory, the region has already proven its worth in the field of green energy. Indeed, Scotland’s progress in its transition towards renewables was highlighted by Scottish Government figures published in December. These showed that renewables accounted for 98.6 per cent of electricity consumption in Scotland in 2020. The Highlands and Islands contributed almost 40 per cent of Scotland’s installed renewable electricity capacity in 2020. In the same year, the Highland Council area was top in the UK for generation of onshore wind and hydro power, according to the Department for Business, Energy and Industrial Strategy.

Beyond serving Scotland, the Highlands and Islands have the potential to be a European powerhouse in the sector. This has been reinforced by the recent announcement of a planned £110m offshore wind tower factory at Nigg, backed by Global Energy Group and Haizea Wind Group, that will create 400 manufacturing jobs from 2023. Meanwhile, Buckie Harbour in Moray was recently selected as the long-term operations and maintenance base for Ocean Winds’ offshore wind farm in the outer Moray Firth.

“Buckie is a traditional fishing port and it’s had some fairly tough times,” says Black. “That’s 60 year-round jobs for the next 25 years or so. And the Nigg announcement that was made recently is also a really important one for Scotland. We’re talking about the UK’s largest rolling mill for offshore wind turbine towers. It’s a great example of the energy transition that is so often spoken about in action: a facility built for the oil industry in the 1970s, repurposed for renewables. Of course, because we generate so much wind power on land and offshore, we also have great potential for green hydrogen. That could really transform, not just the Highlands and Islands, but the whole country.”

Despite the many positives, both Black and Dodds are at pains to point out that many challenges remain, not least in terms of infrastructure, that must be addressed if the region is to fulfil its potential.

“We’ve undertaken a lot of engagement with the board and leadership team talking to businesses and communities right across the Highlands and Islands,” says HIE chair Dodds. “The same challenges that come up time and again, without exception, are transport in terms of both roads and ferries, the availability of adequate and varied housing stock, and digital connectivity. Having these issues seriously addressed is crucial in making the Highlands and Islands a success story.”

The same is true when it comes to supporting established industries in the region, such as the food and drink, tourism and creative industries sectors. All are going through a period of reinventing themselves for the post-pandemic, post-Brexit age, with businesses angling to attract new talent.

“Nowadays, there are longer-term opportunities in these sectors,” says Black. “The wage structure has improved and continues to improve. One of the challenges has been the loss of European workers. There is the potential for the shortage occupation list to help meet gaps, but the longer and medium-term solution is to get more of our young people into these industries. Suitable accommodation, transport links and digital connectivity are all key to that.”

As with the space and green energy industries, these traditional sectors are also looking to capitalise on the region’s natural advantages. Tourism projects supported by HIE include the installation of electric vehicle charging points across the Highlands and Islands, investment in new bike infrastructure and trails, and the development of an energy-efficient hotel with related businesses at Nevis Range. The journey to net zero is evidently front of mind in each area in which the agency is active.

In food and drink, it is supporting the expansion plans of numerous diverse businesses, such as Sinclair Breweries, which plans to create new jobs in Orkney and cut its emissions via an improved temperature control system, and Bute Island Foods, which produces vegan cheese and ice-cream alongside other plant-based products.

“Some whisky companies have quite challenging targets to reach net zero before 2030, if not earlier than that,” says Black. “The challenge is across the whole supply chain, from farmers who grow the barley, to transportation, to the distillery itself. It’s a big change for that sector, but it’s starting to happen. We need to make sure our small companies are aware of what’s coming and are ready for it.

“Thankfully,” he adds, “we’ve got a great story to tell about the quality of our natural environment. Most of the vital ingredients are there to make our region a real success story in the net-zero age. But we need to make sure the infrastructure is also there to support it and that consequently we attract and retain high-value businesses and talented people.” 

This article is sponsored by the Highlands and Islands Enterprise.