Scottish businesses are still finding ways to prosper in uncertain times, says Paddy Graham, head of central Scotland and Northern Ireland at growth investor BGF
You don’t have to look far most weeks to find reports that suggest Scottish businesses are holding off on making big decisions on investment because of persistent uncertainty in the economy.
Brexit looms large and while businesses across the UK eagerly await clarity about what the final exit deal will mean for them, businesses in Scotland are also processing recent discussions about another potential vote on Scottish independence, increased devolved powers and even a separate currency.
We know from our own portfolio companies and the many entrepreneurs we speak to every day that this persistent uncertainty isn’t helpful. But we also have to remember that for many companies, the old adage that times of uncertainty also create opportunities will prove to be true. Scotland, after all, is a nation of enterprise, where innovative companies in a diverse range of sectors are making a name for themselves on the global stage every year.
Since BGF first established an office in Scotland and began investing in local companies, I’ve had the privilege of seeing first hand countless examples of world-class invention, innovation and expansion.
If we want that to continue, it is imperative that investors such as ourselves continue to provide funding that enables inno - vative ideas to continue to flourish and act as a catalyst for creating jobs and wealth for the country.
As a long-term, minority investor we can be supportive during uncertain times and
can follow our money to help businesses continue to grow. To date, BGF has backed 30 Scottish businesses and invested almost £250 million here.
BGF’S recently published Ready for Business report found a sizable group of almost 900 high-potential businesses that are continuing to grow through the current turbulence and have the potential to power Scotland’s economy in future.
This group of Scottish businesses has experienced 11 per cent combined turnover growth and increased the number of people they employ by 9 per cent over the last three years. And they’re not just in the cities either – Argyll and Bute, the Scottish borders and Fife are home to the businesses with the highest combined turnover growth across the whole of Scotland.
We continue to see great growth stories in new sectors such as technology, but also in sectors that have traditionally been the backbone of the Scottish economy, including manufacturing, industrial, and food and drink.
Recent examples from our own portfolio include family-owned Walker Precision Engineering, which makes high-pre - cision components for the defence and space sectors, to whom we have provided follow-on investment to fund further business expansion. Similarly, BGF continues to support M Squared Lasers, a leading manufacturer of lasers and quantum technology systems used in a variety of sectors, including diagnosis of dementia. The business has grown its turnover from around £3m when BGF originally invested to almost £20m, focusing on innovation. The research shows these success stories are not anomalies.
We know that there are barriers to achieving big goals. Brexit has undoubtedly made it harder for local businesses to make longer-term plans around exporting, talent retention and recruitment.
But while uncertainty can jeopardise some businesses, it can strengthen others which use times of challenge to explore new ideas, find solutions to problems, consider new markets and push boundaries. BGF was set up following the last global financial crisis and as we face a new, different time of need, our work and ongoing investment is now more important than ever. Ambitious businesses need to know someone is standing with them. Someone with the capital and confidence to keep forging ahead, and the belief that companies can and will succeed.
When faced with uncertainty, my experience is that our entrepreneurs, problemsolvers and creative visionaries become even more valuable. This is the time to back them and help them to explore new markets, develop new ideas and push the boundaries of what is possible. Competition is fierce in most sectors, so they can’t afford to sit on their hands and await clarity from the politicians.
Our research shows that, even in challenging market conditions, ambitious manage - ment teams in Scotland have continued to create jobs and are looking for growth opportunities. We want to engage with and support more of these companies across Scotland.
There will always be uncertainty. But if we actively support our companies to meet the challenge head on, there will also be opportunity.
● Ready for Business, BGF’S annual summer gathering, will be held on Tuesday, 28 May at The Royal Botanic Gardens in Edinburgh.