Associate Feature: Green shoots

After many months of economic uncertainty and apprehension, 2023 began on a decisively positive note for Highlands and Islands Enterprise (HIE) with the eagerly anticipated announcement that Inverness and Cromarty Firth had, with Forth Ports, been selected as a site for one of Scotland’s two new green freeports. 

It was, says Stuart Black, chief executive of HIE – the agency that works with businesses, communities and social enterprises across the region – “fantastic news”. Black, who assumed his post in January 2022, was understandably elated by the news but stresses that the successful result came only after some two years of assiduous preparatory work by the bid partners.

“Thanks to our natural assets and the £300 million investment in ports and harbours over the past ten years we were able to maximise our geography, natural assets and infrastructure to accommodate all that a green freeport needs,” he says.  

“This was a strong local partnership, a collaboration of more than a dozen organisations representing industry, academia and the public sector around the Easter Ross and Inverness area and I believe the project will benefit the whole of the north of Scotland, not just the area around the freeport.”

Inverness and Cromarty’s bid was not the region’s only one and he stresses that HIE was even-handed regarding both. “Orkney clearly has a leading role to play, demonstrated by Scapa Flow’s importance as the largest deep-water harbour in northern Europe and with exciting plans for the Scapa Flow Future Fuels Hub.

“EMEC, the European Marine Energy Centre in Orkney, is also significant in terms of renewables innovation and the benefits of the green freeport will extend to locations such as Kishorn, with its enhanced capabilities following the redevelopment of the dry dock there, plus Wick and Scrabster as we continue to work with all the ports around the north and the west to develop the net-zero potential for Scotland.”

Alistair Dodds is chair of HIE and has considerable experience of identifying the benefits of cooperation between the public, private and third sectors. He agrees that while HIE welcomes the green freeport announcement, the really hard work begins now. 

“We must take full advantage of that potential and it’s important that it’s advanced through the partnerships we’ve forged with the local authority, the business community, the port authority and the University of The Highlands and Islands (UHI),” he says.  

Further evidence of this collegiate approach is the Regional Economic Partnership (REP) which he says is a relatively new collaboration in the region between HIE, local government, the private sector, education and skills providers and the third sector. 

The green freeport and other projects exemplify what HIE says is its overarching aim to create a fairer, wealthier and greener Highlands and Islands economy that contributes to Scotland’s National Strategy for Economic Transformation (NSET).

The strategy, published last March, sets out how over the next ten years the Scottish Government plans to deliver economic growth that will make the country more prosperous, productive and internationally competitive. 

It’s set to augment other initiatives in which HIE is engaged, including ORIC, the Orkney Research and Innovation Campus, a joint venture by HIE and Orkney Islands Council (OIC) to support growing research and innovation activity and the expansion of companies working in the world-leading marine renewables, energy and low carbon sector.  Last year it was boosted by a £2.8m funding package split 50/50 by HIE and OIC.

Again in 2022, Macduff Shipyards Limited (MSL) announced it was to double the berthing capacity of its facility in Buckie with the help of £190,000 in funding from HIE. Reinforcing the fact that as a part of the local supply chain the marine industry is well placed to service the growth in aquaculture and offshore renewables.

The region is a remarkably diverse one, which gives it both advantages – especially regarding the transition to a net-zero economy – and challenges, such as having the country’s lowest population density and many of its communities living in relatively remote locations. 

“We often need to work hard to get the attention we deserve,” says Black. “Many potential investors tend to look first at the central belt and while many people have heard of the Highlands and Islands and have formed a positive impression, they don’t necessarily associate us with the levels of technology, industry and innovation that increasingly define the region.” 

In the Highlands and Islands, much centres around delivering a green recovery and wellbeing economy and HIE welcomes the strong regional dimension to NSET. “While we represent less than 10 per cent of the population, we also have unparalleled natural assets and it’s important to persuade people that coming to work and live here is a great idea,” says Black. 

“While, in the first instance, we need to create the employment opportunities to attract them, we’ll continue to support our businesses and community organisations to adopt and embed Fair Work. And – almost universally – when people do come, they wonder why they hadn’t done so before.” 

He emphasises the importance of HIE’s investment being equitably spread throughout the region. “We’re supporting projects – for instance in Barra in the Outer Hebrides and Fair Isle in Shetland, which are small island communities that are particularly fragile. So, while fairness involves the fair work agenda it also means ensuring that every part of the Highlands and Islands can thrive and be successful.” 

Dodds concurs: “We’re very fortunate in the Highlands and Islands in having an abundance of natural capital that includes significant marine reserves and a plentiful supply of wind and wave power which are essential for developing the green and blue economy – all of which means that we can be significant players in the Scottish Government’s national strategy.” 

In 2021, COP26 in Glasgow shone a laser on the urgent need to address what’s increasingly described as a global climate emergency and Black points up the region’s crucial role in the transition to net-zero. 

“We already produce 40 per cent of Scotland’s renewable power, with hydro-electric and huge developments in the wind power sector with the ScotWind auction last year indicating the enormous potential of 20 projects around the Scottish coast.”

The region is then quite fundamental to the net-zero future of the country, including opportunities in green hydrogen. 

On the west coast, a partnership of private, public and community representatives in Argyll and Bute has also been working with research specialists to quantify the potential of carbon sequestration there and accordingly, represent important opportunities for green financial investment through carbon markets.

Though buoyed by this activity – which it has supported by approving more than £1.4m in Green Jobs Capital Funding since April 2022, HIE is also confronting some very daunting challenges, with the impact of the war in Ukraine compounding those of the Coronavirus pandemic and the effects of Brexit. 

HIE’s latest Business Panel survey confirmed that rising costs were a continuing concern, especially for businesses in remote rural areas. However, the report revealed that more than four in ten businesses are actively striving for growth and, despite falling confidence in the economy, were demonstrating a sense of confidence about their own futures – with most believing they would be viable over the next six months.

And, encouragingly, while a range of workforce-related challenges were identified (such as the ability to attract new talent), most felt they were equipped to deal with those risks to the business.

Black concedes that the outlook for the year ahead is mixed but says that 85 per cent of those surveyed were confident about the coming six months. “It’s been a tough time, and the winter months are always difficult for our tourism industry (though there are notably bright spots with Orkney Harbour Authority having 236 cruise ships booked this year, with combined passenger capacity of around 200,000).

“In addition, unemployment remains relatively low – which presents its own challenges to businesses in terms of staff availability and that links back into areas such as the availability of housing and efficient transport links … all of the things that are important for rural labour markets.”

Most of the businesses HIE talks to are aiming to expand, with the main constraint being a shortage of staff in areas ranging from tourism and food and drink through green energy and life sciences to the emerging space industry, with launch sites planned in Shetland, Sutherland, the Outer Hebrides and Argyll.

“Many of these are good, well-paid jobs, frequently green jobs and ones that fit the Scottish Government’s agenda exactly,” says Dodds.

“Meanwhile, here as elsewhere there are issues to be addressed such as housing and transport links and these can only be achieved through a partnership approach. This is where HIE is taking on a significant and growing role in facilitating people, businesses, communities and public bodies to collaborate and strengthen our regional economy.” 

This article is sponsored by Highlands and Islands Enterprise (HIE)