BQ Scotland Issue 18

www.bqlive.co.uk

ISSUE EIGHTEEN: WINTER 2014

TECH OF THE TOWN The camera that could change our world view SCOUTING FOR TALENT The art of being a career matchmaker A CREATIVE BUZZ Advertising guru’s journey of discovery LET’S WORK TOGETHER Industry leader shares his vision ISSUE EIGHTEEN: WINTER 2014: SCOTLAND EDITION

THE GOOD LEAF

Enterprising duo take tea to a new level BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS

SCOTLAND EDITION

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WELCOME

BUSINESS QUARTER: WINTER 14: ISSUE EIGHTEEN Welcome to Business Quarter Scotland. We hope you find something enjoyable and thought-provoking to read in this issue. As we prepare to enter 2015, we can take a moment to reflect on 2014 as an astonishing year for Scotland. From the vibrancy of the Scottish Referendum to the outstanding Glasgow Commonwealth Games, the glorious Ryder Cup, and welcoming Year of Homecoming, we have certainly put Scotland on the global map.

We’ve all had plenty of opportunity to consider what it means to be modern Scots in a global world. But there are big challenges for our ‘shiny country’, as one of our BQ Live Debate participants described it. As we go to press, the oil price has fallen to its lowest since October 2009. The price of Brent Crude dipped to $68 a barrel, a fall of nearly 40% since before the September referendum when oil was such a big issue. The gush of shale oil in the United States has had a major impact on world markets, and places massive pressure on the viability of exploration and development in the North Sea and West of Shetland. One of our Live Debate participants asked: How does this impact on Scotland’s chemical industry, which is responsible for 11% of our GDP. And where does our much-vaunted offshore renewables strategy fit, when our tidal companies are struggling for funding? Pertinent question to address.

With a UK general election in May, we have the prospect of an invigorated SNP, with Alex Salmond as an MP holding ‘feet to the fire’ in Westminster, making national politics not only supremely interesting, but potentially divisive.

Deeper division in our society is the last thing we can afford. And Scotland’s business community is already making this clear to policy-makers. Scotland faces a ‘grown-up’ conversation about how it spends the money it raises. It is either higher taxation, deeper cuts in civic spending or the delivery of more Principal Sponsors

efficient and innovative public services. The Smith Commission recommended Scotland be given full control over its income tax raising powers. Despite the ‘silly pranks’ of burning copies of the report by daft councillors who should know better, that’s a step forward.

Politicians and civil servants now need to make this work. Revenue Scotland has been created by an act of parliament. Under the act, the Scottish Ministers must not give directions relating to or otherwise seek to control this independent organisation, although they can give guidance. However, this organisation must be tough and assiduous in collecting what it is properly due in Scotland. Sir Tom Hunter, at the inaugural Entrepreneurial Scotland event in Glasgow, warned it is much easier to spend money than to earn it. This is something the Scottish Government will find out when it has to raise its own taxation.

Hammering wealthier Scots (the Scottish Land and Buildings Transaction Tax is already viewed by many middle-class Scots as ‘vindictive’) might seem like a populist approach, but it is likely to a lead to a slow bleed of our talented and creative people. Getting more people into better-paid work, increasing national productivity, which has slipped, and exporting more goods and services have to be our key priorities. BQ Scotland is doing its bit by celebrating our great and emerging Scottish exporters in our awards in March. And we remain committed to encouraging and celebrating enterprising Scots who create jobs and wealth. It is the only real way to sustain our multicultural, plural, tolerant and open society. And while we continue to champion our exceptional entrepreneurs, we appreciate this is part of the wider policy discussion about Scotland’s national economic strategy.

Kenny Kemp, Editor of BQ Scotland

CONTACTS ROOM501 LTD Bryan Hoare Director e: bryan@room501.co.uk EDITORIAL Kenny Kemp Editor e: editor@bq-scotland.co.uk DESIGN & PRODUCTION room501 e: studio@room501.co.uk PHOTOGRAPHY KG Photography e: info@kgphotography.co.uk ADVERTISING Bryan Hoare Director e: bryan@room501.co.uk t: 0191 426 6300 Audrey Atkinson Sales Manager e: audrey@room501.co.uk t: 0191 426 8205

room501 Publishing Ltd, Spectrum 6, Spectrum Business Park, Seaham, SR7 7TT www.bqlive.co.uk Business Quarter (BQ) is a leading business to business brand recognised for celebrating entrepreneurship and corporate success. The multi-platform brand currently reaches entrepreneurs and senior business executives across Scotland, The North East, Yorkshire and the West Midlands. BQ has established a UK wide regional approach to business engagement reaching a highly targeted audience of entrepreneurs and senior executives in high growth businesses both in-print, online and through branded events.

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While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All company profiles are paid for advertising. All information is correct at time of going to print, December 2014. room501 Publishing Ltd is part of BE Group, the UK’s market leading business improvement specialists. www.be-group.co.uk

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SCOTLAND EDITION

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BQ Magazine is published quarterly by room501 Ltd.

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CONTE BUSINESS QUARTER: WINTER 14 LET’S WORK TOGETHER

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Features 20 A NEW LEAF OF LIFE Two enterprising women are taking tea to a new level

28 LET’S WORK TOGETHER The head of the Scottish Council for Development and Industry shares his vision

36 LIVE DEBATE Business leaders look beyond the constitutional question that has occupied the nation

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42 A CREATIVE BUZZ Advertising guru Ian McAteer recounts his journey from the heady days of the late Seventies

A CREATIVE BUZZ

56 TECH OF THE TOWN The Scots behind a 360-degree camera that could change our world view

60 SCOUTING FOR TALENT Recruitment boss Steve McCutcheon on the art of being a career matchmaker

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TENTS SCOTLAND EDITION

32 COMMERCIAL PROPERTY

The latest deals and developments in this key sector

TECH OF THE TOWN

46 WINE Geographer Mike Groves goes on a journey of discovery with two fruity offerings

Regulars 06 ON THE RECORD Fresh thinking is changing the way universities operate

12 NEWS A round-up of key developments across the country

18 AS I SEE IT The self-employed have been overlooked by policymakers, says Chris Bryce

48 MOTORING Brewery boss is the coolest mum at the school gates in the new BMW i8

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52 FASHION Welcome to the home of the world’s sexiest wellies – at £700 a pair!

54 EQUIPMENT

SCOUTING FOR TALENT

Watch-making legend Angelo Bonati takes time out to talk to Josh Sims

64 BIT OF A CHAT With BQ’s backroom boy Jock Yuler

66 EVENTS Key business events for your diary

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60 BUSINESS QUARTER | WINTER 14

ON THE RECORD

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>> A licence to find the merging technology In the first in a BQ Scotland series on commercialisation in Scotland’s universities, Claire Brady, Head of Technology Transfer at Edinburgh Research and Innovation, looks at how intellectual property within the university translates into industry applications Take a look at these impressive figures, in the past five years, The University of Edinburgh, through Edinburgh Research and Innovation, has formed 180 new companies. In the same period, university spin-out and start-up companies have raised £275m investment and have generated a not-inconsiderable £664m turnover. Moreover, ERI’s commercialisation activities have attracted nearly 2,500 industry partnerships across the world, generating a financial worth of around £80m.

This underlines the University of Edinburgh’s proven success in translating its world-class research into intellectual, social and economic benefits for business, industry and society around the world.

Innovation from the university extends across many facets of everyday life, including healthcare, communications, energy and the environment. With over 150 new discoveries being disclosed every year, this offers an effective route for businesses and other organisations, to translate cuttingedge research into profitable new products, processes and services.

Within ERI, we have long experience of establishing deals that reflect the individuality of each technology opportunity, which takes into account the licensee’s needs and the university’s objective of ensuring development of the IP, which helps to create wider societal and business impact.

The success of this approach is demonstrated by the conclusion of circa 50 IP-based licence transactions each year. This accomplishment is achieved by making access to IP straightforward, yet also ensuring approaches are appropriate for the different types of Edinburgh IP and licensee’s needs.

ERI’s Technology Transfer Team, who lead licence negotiations, together with our legal team colleagues work closely to prepare

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Claire Brady, Head of Technology Transfer at Edinburgh Research and Innovation

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template agreements that serve as frameworks for all typical licensing circumstances. Equally, we recognise that in many cases, successful commercialisation of intellectual property is reliant on finding the specific contract terms that meet the individual requirements and sometimes constraints of our partners.

Importantly, these templates are reviewed and updated regularly, based on feedback from real-life negotiations, to ensure clauses contained are clear, balanced, and that we are exchanging best practice on the commercial terms. Moreover, we also work with external legal firms to prepare corporate documents in order to expedite spin out transactions. We very intentionally obtain input from external legal counsel that often represents young fledgling businesses trying to raise money.

These documents include company articles and shareholders’ agreements tailored for typical company formation circumstances.

Adoption of the university’s template corporate documents is not compulsory; rather they are offered up to prospective management teams as a means to streamline negotiation of corporate elements and to eliminate unnecessary legal costs. The templates are intended to provide a fair and balanced position, acceptable to all parties, and thus ready-to-adopt. ERI became the first university technology transfer office in the UK to offer a fully online licensing service to industry in 2009. This enables customers to license technologies on standard non-exclusive terms and earlier this year, we launched a new online licensing portal named ‘Click-thru’, that further streamlines the end-to-end online licensing process by including direct access to downloadable software and an online payment facility. As a result, licences can be concluded and in the case of software, the ‘product’ can be in your possession in a matter

Innovation from the university extends across many facets of everyday life

ON THE RECORD

>> Glasgow University wins £29m in quantum funding A portfolio of ‘quantum technologies’ set to be brought to market by a new consortium of universities and businesses has been given a substantial funding boost.

Greg Clark, Minister of State for Universities, Science and Cities, announced that a new Quantum Imaging Hub, led by the University of Glasgow, will receive £29m in funding over the next five years from the Engineering and Physical Sciences Research Council (EPSRC).

The hub brings together the Universities of Glasgow, Bristol, Edinburgh, Heriot-Watt, Oxford and Strathclyde with more than 30 industry partners. The hub’s lead academic is Professor Miles Padgett of the University of Glasgow. Prof Padgett said: “The hub’s vision is to work in partnership with industry to translate our world-leading discovery science into revolutionary imaging systems that will benefit the UK economy across commercial, scientific and security sectors.” One University of Glasgow-led project uses single-pixel sensors to build ultraviolet or infrared video images much more affordably and conveniently than has been possible.

A second project, also led by the University of Glasgow, will use springs ten times thinner than a human hair to image minute changes in gravity fields. A new camera development led by Heriot-Watt University uses photon-timing techniques to recognise objects around corners, as well as images through walls or opaque biological tissue.

of minutes. At present, over 20 click-thru products are available to license online for commercial use – more than any other UK university with an equivalent facility.

The Click-thru portal has been of particular value for ‘end-user’ licences, e.g – a piece of software that a company will use in-house.

This is because in such circumstances the needs of the customer are both standard and predictable, and therefore a bespoke approach isn’t required. ERI launched an initiative called ‘Open Technology’ in 2012, to highlight the opportunities being developed by the university. There are currently 12 ‘Open Technology’ opportunities available and signing a licence agreement signifies the start of a mutually beneficial partnership. We

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just have to look at some of the illustrious names that ERI has given a springboard to, such as Blackford Analysis, DestiNA Genomics, Fios Genomics, Mobile Acuity, pureLiFi, sensewhere, SkoogMusic and Sofant Technologies – all strong examples of companies that have their foundations immersed within university technology transfer and who are now successful in their respective fields. Many established companies have acquired university technologies to expand or improve their product lines, including: Aquamarine Power; Biogen Idec; Dr. Reddy’s Laboratories; EMD Millipore; Ilika Technologies; Pufferfish; Simedics; and Synopsys. n Find out more at www.research-innovation.ed.ac.uk

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ON THE RECORD

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>> Why ‘adopting’ an intern can make a difference to Scottish business Joy Lewis is hoping to increase the number of firms in Scotland taking on a paid graduate intern in 2015. She speaks to BQ Editor Kenny Kemp In the bad old days, an intern was able to gain a leg-up because Mum or Dad were pals with someone in the law firm*/ accountancy practice/ auction house/ film studio/ fashion magazine (*tick where applicable) where Johnnie or Joanna could get vital work experience. It was generally unpaid – but it was a foot in the door. After all, the Catch 22 of the workplace is, how do you ever get experience, if only those with experience need apply? With the world of internship becoming such a hot-ticket for graduates, something had to change. In 2009, along came Adopt an Intern, which was given funding from the Scottish Government. As a small organisation, it has been able to change the landscape, and now Skills Development Scotland, our national skills body directing 15 to 24-yearolds into work, which gets £210m a year in public funding, is turning some of its attention to interns.

Adopt an Intern, which emerged from a think-tank study by the Centre of Scottish Public Policy, can be viewed as the trailblazer in Scotland, networking with the likes of Investors in Young People. In 2013, the Scottish Government doubled the funding and now more than 800 ‘paid, short-term’ interns have been given work experience in a range of cross sector companies. 77% going into permanent employment.

“We are a not-for-profit company that is achieving great things. After five years, we have a deep reach to graduates across Scotland and the UK. I’m comfortable with where we are and the momentum we’ve built up. Moving forward in 2015, we depend on more business support across Scotland: that’s my key message,” says its founder and chief executive Joy Lewis.

Adopt An Intern has grown mainly through its networks and word of mouth. Joy Lewis is clear it needs to speak more loudly.

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Joy Lewis

We need more businesses to be brave and take the plunge “We need more businesses to be brave and take the plunge,” she tells BQ. “I started Adopt an Intern from nothing in 2009. It came from policy discussions we had at CSPP and I thought this was something I should do. I had worked in the UK government but I wasn’t in recruitment. I knew there was a supply and demand and I wanted to help that. We want internships to be a paid-for work experience and this is the culture we are promoting.”

Joy Lewis and her team are determined to make it open and transparent for every Scottish graduate to apply, no matter what the background or socio-economic status. “If we made it paid, then it opened it up even further. It is an open process and that’s what we are all about.”

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So how does the business benefit and how can they afford it?

“We encourage small businesses to pay as much as they can afford. If they can only afford the minimum wage, then OK. But most people usually pay them on a more enhanced pay-scale depending on their business.”

Joy Lewis talks about short-term ‘projects’ for graduates, with a beginning and an end. “So that graduates have an outcome to put on their CVs, and the employer has an outcome they can measure too. Everyone gains. The social value we give to the graduate and the business can be great.”

Our internships are as varied as the interns who do them. While marketing, communications and social media make up a large number of our internships, we’ll recruit for pretty much any role in any industry in any sector. We’ve also recently been helping Museums Galleries Scotland with their traineeship programme, which dealt with nongraduates. We’re really open about who we will work with because we know that interns can benefit any business.

“It is not always about skills, but the attitude of the graduates,” she says.

How does she view other youth employment programmes, which have been pushed by the Scottish Government?

“We are very inclusive: we are in this together to get graduates into work. We’ve got a lot of links on our website with other organisations and programmes. We want our graduates to be contributing to the economic growth of Scotland. It’s unacceptable to have graduates – or any young people for that matter – on the scrapheap.”

For businesses keen to have an intern, there is a sliding scale of fees. “It’s a very affordable one-off fee. We don’t charge if they take them on permanently afterwards, which is a massive saving in terms of recruitment fees.” n

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COMPANY PROFILE

Unexplained gaps in the system must be remedied for growth to blossom The story of the last few years is well known by now. Businesses weren’t borrowing, banks weren’t lending, growth was stilted and a more conservative approach took over HOWEVER, THINGS HAVE CHANGED. HAVEN’T THEY? The economy is recovering, the mood seems brighter and the anecdotes are getting far more positive. Despite the uncertainty fuelled by the recent Scottish Independence Referendum and the impending UK General Election, business leaders will tell you that things are looking better.

The pipeline is looking healthier and there is a welcome return to thinking about growing and developing the business.

So, where is the funding coming from to power this growth and development, this expansion and refocusing? If you ask business owners, they say that money (on acceptable terms) is extremely hard to find. On the flipside, if you ask the funders, it’s there for the taking.

Looking at these two different sides of the story, it is clear that there is a significant gap in perception.

Surprisingly, one of the major obstacles to businesses securing funding is a lack of knowledge of what’s out there – or to put it another way, a lack of visibility of the options. There is funding, but in some cases it’s very well hidden.

The banks have borne the brunt of criticism about access to funding and you could be forgiven for thinking that the Government has lost faith in the banks to deliver this service and has tried to

take a different approach. They doors. The banks and funders have set up a number of need to get back to being recent initiatives which communicative. Having push funding out spent many years with to SMEs through heads well and truly other sources: the below the parapets, new governmentit’s time to get backed Funding back out there.

Circle has recently Businesses need to launched; educate themselves the Scottish about the new Investment Bank market – it’s in a very had huge potential different shape and to service the market; only by getting to know and in its last budget it can you taken advantage statement, the UK Government of it. And, intermediaries can announced a significant chunk of play a crucial role by trying to bring Gareth Magee, partner cheaper borrowing for start-ups the two closer together. and SME specialist and SMEs in a bid to spark an 2015 would seem like a good year ‘entrepreneurial revolution’. to sort the gap out, so that when But the critical factor is that all the political uncertainty subsides, these initiatives will only work if those that need it the various players are all set to go. If the gap can find it and secure it. There has been a serious between those seeking funding and those lack of awareness, perception and understanding. offering funds becomes considerably narrower, If SMEs – who represent 99% of Scotland’s private we could well see some really positive growth sector economy – are up for funding, their funding on the horizon. options should be shouted from the rooftops, pasted on billboards, put up in lights.

The responsibility for change lies at a number of

If SMEs – who represent 99% of Scotland’s private sector economy – are up for funding, their funding options should be shouted from the rooftops, pasted on billboards, put up in lights

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Gareth Magee advises high growth SMEs and has an active involvement in the Scottish investment community. To find out more call 0131 473 3500 or email Gareth.magee@scott-moncrieff.com

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ON THE RECORD

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>> A tale of two cities: celebrating Scotland’s success stories BQ Editor Kenny Kemp joins WeDO Scotland in Edinburgh and Entrepreneurial Scotland in Glasgow at their annual awards Scotland needs to keep celebrating the success of its wealth creators. And that’s what they love doing at the WeDO Scotland’s dinner and awards in Edinburgh. Founder Belinda Roberts and her colleague Gill Eastgate are to be applauded for making WeDO such a vibrant and cohesive organisation supporting emerging and existing entrepreneurs. There is a genuine thrill for those business people involved with this organisation.

Interestingly, the WeDO event was only a few days before the much larger Entrepreneurial Scotland’s inaugural dinner in Glasgow’s Hilton Hotel, which seemed bombastic by comparison. It will be interesting to see how the marriage of the Entrepreneurial Exchange and the Saltire Foundation beds in and chief executive Sandy Kennedy and chairman Chris Van Der Kuyl will have to seriously re-think about how next year’s awards ceremony fits with the organisation’s expanded brief.

In Edinburgh, Stuart Hunter, who set up consultancy Advance Global Recruitment, was named Entrepreneur of the Year in the WeDO Awards, sponsored by Claymore Global Solutions. Runner-up was Erica Moore of eteaket (whose partner Sarah Chanter is featured in this BQ).

Stuart was one of five winners at the Sheraton Grand. He thanked his business partner Cameron Taylor, with whom he set up Advance Global Recruitment in March 2011.

They had been working together in a local recruitment agency before going into the international energy market, specialising in ROV and sub-sea appointments.

“What a fantastic award. I could not have done it without Cameron – my best friend.

Also I’d like to thank the team for all their hard work in building AGR,” said a startled Stuart.

The company, which was set up in Leith, employs 15 in Edinburgh and three in Dubai

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and is opening an office in Houston. In less than four years, it is heading for a turnover of £10m. Stuart also paid tribute to Belinda Roberts and the WeDO’s way of encouraging.

“The people that we’ve met through the WeDO network are truly inspirational. You can’t really pay for that. You might spend a fortune on getting advice but it comes willingly from the members in the WeDO network. I appreciate that,” he said picking up his prize.

The other four winners were: Nathan Pike, of Pike & Bambridge, for Young Entrepreneur of the Year, sponsored by CNJ Accounting, with runner-up Nick Cohen of PCR Business, a Glasgow technology company. Nathan’s business is in motor and vehicle leasing. Mike Christopherson, of Nordic Drinks, for Most Innovative Business, sponsored by Geoghegans Accountants & Business Advisors, with runner-up Gavin Neate of Neatebox. Mike and his wife Anna import Swedish cider to their trendy Edinburgh bars.

James Magee, of Securicorps Security Management, for New Start Business of the Year, sponsored by Mazars, with runner-up Ian LeBruce of Cappuccino Ads. James impressed the judges with how quickly he has grown and developed his firm in Edinburgh and London.

Martin Walker, of Everycare Edinburgh, for High Growth Company of the Year, sponsored

The entrepreneurs are the greatest catalyst for change in any society

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by Santander, with runner-up Abigail Stevens of Think Global Recruitment. Everycare, which opened in early 2011 in Edinburgh, allows care for the elderly and other adults in their own homes.

“I’m gob-smacked,“ Martin told BQ. “I wouldn’t have put myself forward for this at all. I don’t do this for recognition. It’s a reward to see that we are making a difference to people’s lives everyday. We’ve been upgraded by the Care Inspectorate for the care that we give. In the short time that we’ve been operating, it is nothing short of astonishing. We are barely scratching the surface in Edinburgh.”

Over 180 Scottish entrepreneurs were in attendance and the judging panel was chaired

by Graham Langley, Martin Mutch, Dougie Walker, (winner of our 2013 Entrepreneur of the Year) and Rod McMillan.

At the Entrepreneurial Scotland awards, Mike Welch, of Blackcircles.com, was named Emerging Entrepreneur of the Year, Peter Vardy, of the Peter Vardy Group, was named Entrepreneur of the Year, while Alan Revie, of National Tyre and Autocare, and Bob Keiller of the Wood Group, were inducted into the Hall of Fame. It is impossible not to agree wholeheartedly with Chris van der Kuyl, who said: “The entrepreneurs are the greatest catalyst for change in any society… we need to break down the mythical notion that entrepreneurship is only about start-ups; being entrepreneurial or even intrapreneurial is vital to all firms, large or small, who want to grow. Plus an entrepreneurial mindset will unlock real value in government, education and social enterprises. Being entrepreneurial is fundamental to Scotland’s future growth and prosperity.”

BQ is the media sponsor of the WeDO Scotland awards. n

WeDO winner: Stuart Hunter with partner Gaby Crolla

Entrepreneur of the Year: Belinda Roberts with winner Stuart Hunter and Dougie Walker, last year’s winner, and Tam Henderson, of sponsors Claymore Global Solutions Graham Langley, Chairman of WeDO judging panel

Mike Christopherson, of Nordic Drinks

Nathan Pike, winner of Young Entrepreneur of Year

New Start winner: James Magee of Securicorps, with Belinda Roberts and judge Martin Mutch (right) and Brian Hay Smith of sponsor Mazars (left).

Summing up: Gill Eastgate of WeDO Scotland

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NEWS

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First Minister’s rallying call to business, oil sector ripe for mergers, lager brewer’s figures are refreshingly good, research reveals huge potential of family firms, untapped coal reserves discovered >> Nicola’s stimulating talk First Minister Nicola Sturgeon used her first economic address to Scotland’s businesses to call for ideas to stimulate growth and exports. Speaking to more than 70 representatives from Scotland’s business community, she announced the continuation of the Council of Economic Advisers, chaired

by Crawford Beveridge, the former chief executive of Scottish Enterprise.

Speaking at Scottish and Southern Energy in Glasgow, she said the CEA would continue to benefit from the expertise of Nobel Laureate Professor Joseph Stiglitz and welcomed Sir Harry Burns, former Chief Medical Officer to the Scottish Government, to the CEA. “London has a centrifugal pull on talent, investment and business from the rest of Europe and the world. That brings benefits to the broader UK economy. But as we know, that same centrifugal pull is felt by the rest of us across the UK, often to our detriment. The challenge for us all is how to balance this in our best interests.”

She asked Scottish businesses to share her ambitions to compete, innovate and export.

“I want to hear your ideas about how we can grow the economy faster and more sustainably and better support you to compete, innovate and export. I want, today, to open up an ongoing dialogue with you about our shared ambitions and how we achieve them.”

I want to hear your ideas about how we can grow the economy faster

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>> Why it’s worth being one of the crowd A new online peer-to-business lending company has been launched in Edinburgh, supported by serial entrepreneur Bill Dobbie. Lending Crowd has entered the market for SME lending and hopes to build a presence across the UK in an expanding market predicted to be worth £1.74bn in 2015. Crowdlending offers investors the opportunity to gain higher rates of returns through keener rates compared with traditional savings products and methods. It is similar to crowdfunding.

Stuart Lunn, the chief executive officer, said: “It is basically a fast and transparent way of lending, using technology as the backbone. We are providing a clear and easy experience for both investors and borrowers.”

Mr Lunn was an equity analyst in institutional stockbroking before setting up Crowdlending, while Bill Dobbie was a co-founder of Iomart and, more recently, involved with Cupid, the successful online dating site.

“We felt this was a fantastic opportunity to move into this space, blending our combined skills.

We have brought together a team of senior people with experience in financial services.”

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NEWS

>> North Sea mergers in pipeline as oil price dips A spate of North Sea energy industry acquisitions and mergers may be on the cards in 2015. With the oil price falling below $80 a barrel there have been fears that increasing supply, driven by US shale production, would outstrip demand in a low growth environment.

While many investors have been selling off their holdings in oil producers, Kames Capital’s High Yield Global Bond fund managers Phil Milburn and Claire McGuckin believe oil companies are insulated from declining prices and McGuckin says the sector is ripe for M&A activity. Their view is reflected in the UK merger activity, which rocketed back in the third quarter with private equity recording its highest activity level since 2009. The activity reflects the pent-up demand from buyers and excellent selling conditions, according to the latest PCPI/PEPI from BDO Corporate Finance.

Neil McGill, director at BDO, said: “The appetite for deals in the private company arena are undiminished. There is a lot of cash chasing good quality deals and private equity funds continue to take advantage of the excellent conditions during 2014. We continue to see good businesses receiving frequent enquiries from potential buyers. What we are not seeing, somewhat surprisingly, are prices being lowered to get deals done ahead of the impending General Election. There seems to be a working assumption that the Capital Gains Tax rate won’t change in the next Parliament and, therefore, pricing remains resilient. We expect this to continue up to the elections, based on the cash in the market and investor appetite.”

>> Moving upsteam INEOS Upstream – a division of the Swissbased chemical company which owns Grangemouth – has bought an 80% stake in a shale oil licence in central Scotland from Reach Coal Seam Gas Limited. It is known as Petroleum Exploration and Development Licence 162. This development licence area is 400 km2 and next to an earlier licence, PEDL 133, bought in August, when INEOS took a 51% stake in fracking rights from BG Group. INEOS will be the licence operator and is funding the initial appraisal consisting of two wells and 100 km2 of 3D seismic. INEOS is controlled by founder and shareholder Jim Ratcliffe.

>> California: clearly better Optos, the Scottish retinal imaging company, has unveiled a second device from its next generation imaging platform at the American Academy of Ophthalmology meeting in Chicago.

California, a new compact desk-top retinal imaging device, provides greater imaging functionality and expands the portfolio for the ophthalmology market. Shipments are expected to commence in the first half of 2015. Roy Davis, chief executive officer of Optos, said: “I am delighted to unveil California, our newest offering for the ophthalmology market.”

The company also increased revenue and other operating income by 7% to £108m from £101.7m, up 3%, with profits before

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tax doubling to £11.8m, with profit after tax of £5.42m

>> Gael lands lucrative deal Scottish software developers, Gael Ltd, has reached an undisclosed deal with an Asian aircraft engineering and maintenance group which will see its new cloud-based product rolled out across HAECO Group. Gael, which provides quality, safety and risk management software and services for industries such as aviation, manufacturing, healthcare and life sciences, will work alongside the Hong Kong-based HAECO Group to implement Gael Enlighten, a cloud-based solution.

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NEWS

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>> Keeping it in the family

>> Firm wins BP contract A Livingston-based company has won a major contract to protect the critical software systems on BP’s new floating production, storage and offloading vessel (FPSO), west of Shetland. Asset Guardian Solutions will operate the Quad 204 redevelopment project.

>> Danish firm backs Beatrice Copenhagen Infrastructure Partners has taken a 25% stake in the UK offshore wind project Beatrice, in the Moray Firth. The project is one of five awarded an investment contract by the UK government. It has been developed by SSE plc and Repsol and is progressing towards final investment decision in 2016, to be fully operational in 2019.

>> Rapid growth recorded

>> A sparkling performance

Employment law and health and safety consultancy Law At Work has grown by 12% to reach a turnover of £2m. The growth, which follows an MBO two years ago – has been achieved through more clients across the UK and the continued development of the services. Pre-tax profit also increased by 58% for the firm, which has offices in Edinburgh and Glasgow.

Tennent’s, Scotland’s best-selling lager, continues to deliver a fizzing performance for parent C&C Group, as the company increases its revenues by 9.3% to £305m. The Irish-based company, which also owns Magners cider, saw operating profits grow by 2.7% to £54.6m, thanks to its core business in Scoland and Ireland.

The company is also making progress in integrating its Gleesons and Wallaces acquistions. Stephen Glancey, C&C Group chief executive, said: “The strength of our core business in Ireland & Scotland underpinned profit delivery of € 69.2m (£54.7m) in the period. Given the lower than expected contribution from the US and England & Wales businesses, this is a solid outcome. Our businesses in Ireland & Scotland are the cornerstone of the group representing 86% of operating profit.”

Scotland reported a resilient performance despite the significant task of integrating Wallaces and Tennent Caledonian, he said.

>> Firm negotiates new deal Glasgow-based Smart Metering Systems has reached an agreement with its existing lenders, Barclays Bank, Clydesdale Bank and Bank of Scotland, on a significant amendment to its £105m revolving credit facilities.

Established in 1995, the firm connects, owns, operates and maintains metering systems and databases on behalf of major energy companies. It aims to offer its services to the UK industrial and commercial gas market in which its customers have an 80% share.

BREAKFAS T

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BUSINESS QUARTER | WINTER 14

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Family businesses in Scotland have the potential to boost the country’s economy by up to £1.23bn a year, said a research project commissioned for Scottish Family Business Week. In Scotland, SMEs account for 99.3% of all private sector enterprises and 63% of these are family businesses, while 73% of Scottish family businesses want to keep the business in the family. In 2012, only 12% of family owned businesses in Scotland were passed down to the second generation and only 7% of family owned SMEs had been in the family for three generations or more.

In 2012, 17,385 new enterprises were set up in Scotland, but 16,760 of these have now ceased to exist. A number of these business closures resulted from failed business succession. The survival rate of new businesses after five years is around 35-50%. In contrast, the survival rate of business transfers is around 90-96%.

The research shows that transferred businesses outperform new start-ups in terms of turnover, profit, innovation and employment.

In 2012, 17,385 new enterprises were set up in Scotland, but 16,760 of these have now ceased to exist >> Weir’s £138m acquisition Glasgow-based Weir Group has bought Trio Engineered Products, a ChineseAmerican manufacturer of crushing and separation equipment for the mining and aggregates markets, for £138million. Trio has a strong position in Chinese mining and US aggregates markets. The company employs around 700 people across its operations in China and the United States with revenues growing from £70m in 2013. Meanwhile, Professor Sir Jim McDonald, currently principal and vice chancellor of the University of Strathclyde in Glasgow, has been appointed a non-executive director and joins the board in January 2015.

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>> Warning over high taxes Scotland will face an exodus of highearners if the Scottish Government tampers with the top bands of income tax. Under the Smith Commission proposal, Scotland is to be given full control over its income tax, a move welcomed by those calling for maximum devolution of powers. But Prof Brad MacKay, head of strategy at the university of Edinburgh, warns against taxing high earners at rates well above the rest of the UK. He said: “When you start to look at the change in stamp duty in Scotland, and the full devolution of income tax, my view is that if the Scottish Government changes the higher-rate bands for tax, you will get an exodus from Scotland.

“In Scotland, 46% of employment and 60% of national inclome is dependent on large businesses. If there’s an exodus of this, you will get all kinds of knock-on effects.”

>> Boost for business schools The Association of Business Schools, the representative body for UK business schools, welcomes the introduction of a postgraduate loan system. Anne Kiem, chief executive of The Association of Business Schools, said: “We welcome the Chancellor’s announcement to widen access to British higher education by providing a loan system for postgraduate students. Business schools represent one in five postgraduates studying in the UK. Business schools have been particularly hard hit by the decline of postgraduate students, in a large part due to the visa restrictions for international students, so our members welcome initiatives that will stimulate higher numbers.”

NEWS

>> Women seeking growth Over 80% of business women in Scotland want to grow their businesses and are seeking access to enterprise support, finance and market opportunities, a survey has found.

Launching the Women’s Enterprise Scotland (WES) Survey of Women-Owned Businesses 2014 on Women’s Entrepreneurship Day, as part of Global Entrepreneurship Week, WES CEO Margaret Gibson said: “The majority of women running microbusinesses employ fewer than ten staff. Our results show personal savings were the main source of finance in the last 12 months, with only 12% accessing public funds. The perception was that investment for business growth was more problematic. In addition, respondents indicated a clear preference for flexible business support, where a selection of services were available rather than a ‘one size fits all’ approach.”

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BUSINESS QUARTER | WINTER 14

NEWS

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>> Expanding in healthcare Craneware – with its focus firmly on the US healthcare market – has completed two equity transactions giving the firm good prospects for 2015, shareholders at Tanfield, in Edinburgh were told. Keith Neilson, chief executive of the company, said: “The first transaction is the share ‘buy-back’ and the second is the acquisition of the emerging technology company, Kestros Limited.

“Kestros provides a platform in the high growth Patient Access market, as the company addresses the growing level of consumerisation within healthcare.”

>> ECS appoints new MD >> Cluff finds more coal Cluff Natural Resources, the AIM quoted company, owned by entrepreneur Algy Cluff, interviewed in BQ Scotland, has discovered an estimated 335 million tonnes of coal under the Firth of Forth. The company had measured and indicated 247 million tonnes within its 100% owned Kincardine Licence in the Firth of Forth, Scotland.

This initial resource estimate is a key step towards building the UK’s first deep offshore Underground Coal Gasification demonstration project.

Two coal seams alone identified 43 million tonnes of coal in place – meeting CNR’s key coal quality criteria for a fully commercial UCG project. This contains 1,471.5 petajoules of energy which is equivalent to approximately 1,395 billion cubic feet of natural gas-in-place on an energy equivalent basis.

Chairman and chief executive Algy Cluff said: “This report supports the company’s UCG licence selection and forms the basis for future investment in Scotland while proving the performance of the deep UCG process in a UK context. The development of UCG at the Kincardine Licence Area would result in the creation of new jobs, help protect existing industry as well as create significant supply chain benefits. “

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One of Scotland’s fastest growing IT consultancy and services providers, ECS – placed 15th in the Sunday Times Tech Track 100 – has appointed Charles Quinn as group managing director.

Quinn, an IT industry veteran in executive leadership, sales, marketing and IT services gained with the likes of HP, Dell and Microsoft, is spearheading ECS’s next phase of growth. His appointment comes as ECS predicts over 45% growth for 2014 with anticipated revenues of over £80m.

>> Apex hits new heights Edinburgh-based Apex Hotels has turned in another strong performance with turnover up to £56m – while it confirms plans for 2015.

Turnover grew to £56million, an increase of 11%. In the London market, the group benefited from an upturn in market conditions following the 2012 Olympic Games and experienced strong growth in occupancy and rate, with an increase in RevPAR of over 9%.

Profit to 30 April 2014 of £9.6m represents an increase of 37%. New acquisitions include a site in Bath with planning permission for a 177-room luxury hotel and a purchase agreement for an existing Glasgow Hotel.

>> Strength in numbers One of the largest independent accountancy firms in Scotland will be headquartered in Dundee after the merger of two practices. Dundee-based EQ Accountants

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LLP, which celebrated its 10th anniversary, will join forces with Carters, who are based in Glenrothes, with effect from 1 April 2015.

With offices in Dundee, Forfar, Glenrothes and Cupar, the new firm will have over 100 staff, including 16 partners. No redundancies will be made as a result of the merger.

>> City Deal’s a good deal The construction industry will be the biggest winner in the massive £1.1bn City Deal for Glasgow, says Stuart Patrick, the chief executive of Glasgow Chamber of Commerce. “A lot of the City Deal projects will be infrastructure projects,” he said speaking at a BQ Live Debate.“There are one or two elements of City Deal that have a more ranging aim, particularly around life science and centres of excellence around South Glasgow hospital, but the construction industry will be the benefactor.” He says that £1bn will be for infrastructure projects, and there is scope for the regional authorities to go down the route of helping local business if it is in the parameters of the agreement with the UK Treasury and the Scottish Government.

“This is one of the gains we got out of the referendum. We wouldn’t have had a City Deal without the referendum because the Treasury would never have taken an interest in it, and the Scottish Government would never have matched the money were it not for the vote.” He said it was an interesting start for Glasgow Chamber in trying to get a wider range of organisations involved in the distribution of the public money. Read BQ’s Live Debate on Page 36.

We wouldn’t have had a City Deal without the referendum

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NEWS

>> BQ people on the move Macdonald Henderson has promoted Alan McKee to director. He joined Macdonald Henderson in November 2010 and leads the firm’s commercial dispute resolution team. He is also chairman of the Glasgow & West of Scotland Insolvency Forum.

Alex Innes

Jan Emery has appointed Loganair’s director of charter services. Jan’s previous role was at Aberdeen International Airport as route development and marketing manager.

Scottish Equity Partners has appointed Peter Bachmann as director and Andy Low as principal to work on its £135m Environmental Capital Fund.

Commercial law firm McClure Naismith has recruited two specialists in the international outsourcing and IP/IT, and Real Estate – Phillip Rees and Michelle Kershaw. Phillip will be based in the firm’s London office, while Michelle becomes director of real estate, again based in London.

Jamie Davidson has been appointed as partner by accountancy firm Henderson Loggie focusing on working with clients in the charity and not-for-profit sector. Based in Edinburgh he will advise clients across Scotland, working alongside colleagues based in the firm’s Aberdeen, Dundee and Glasgow offices. He is a member of the ICAS Charities Committee.

George Adams has joined MB Aerospace as general manager in Motherwell, having previously had a successful career with Rolls-Royce. Headquartered in Scotland, MB Aerospace is an international group providing engineering solutions to the aerospace and defence markets.

Shreya Kisan has been appointed business

development manager at Alexander Dennis, the major international bus and coach manufacturer. He was previously with Cummins.

The Livingston James Group, the £2m turnover recruitment and leadership advisory business, has secured the services of Douglas Adam, who has spent more than 17 years working for a FTSE 250 recruitment business.

This is a response to changes in both the public and private sector landscapes and will add to Livingston James’s growing portfolio of specialisms. The company has established a number of specialist businesses, including Rutherford Cross and Drummond Bridge.

Balhousie Care Group has appointed Mike Reid as finance director. He joins from Grant Thornton. The group has also appointed two non-executive directors – Marian Keogh, formerly chief executive of CHAS, and David Burke, latterly depute chief executive and executive director (Housing and Community Care), Perth & Kinross Council.

Senior lawyer Alex Innes has joined law firm HBJ Gateley as a partner in its banking and finance team. Innes, a deal-maker who

is dual-qualified in Scottish and English law, joins from Anderson Strathern, and is joined by solicitor Euan Anderson.

Lambert Smith Hampton have appointed Andrew Shiells as a director in its Capital Markets team in Scotland. He joins LSH from Knight Frank, where he has been one of the leading deal makers in the investment team.

Standard Life Investments, the global investment manager, has appointed two new members to the European Equities team, increasing the team to 12 people.

Tom Dorner, based in Edinburgh, joins as an investment director in the European Equities team, while Jonathan Fearon has joined to manage the Standard Life Investments European Equity Growth Fund.

Santander Corporate & Commercial has appointed Dave Walker and Stuart Thom as new relationship directors for Aberdeen.

Based at the Corporate Business Centre in Aberdeen, Dave and Stuart join an 11-strong team and will specialise in working with local businesses with turnover between £2.5m and £25m.

McHardy Financial, an independent financial advisory firm, has appointed Paul McCabe as independent financial adviser. Mr McCabe, who will work at the firm’s Kirkcaldy and Edinburgh offices. He worked previously for AEGON and MetLife as a broker consultant, and joined the financial services industry in 1998.

Design and digital agency Lewis – celebrating 40 years in business – has appointed two new designers. Steven Scott takes up the role of senior designer working alongside design director Scott Walker. Designer Kari Yoshime, who has six years experience, also joined the team.

If you’d like to include someone on the move, please email editor@bq-scotland.co.uk

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BUSINESS QUARTER | WINTER 14

AS I SEE IT

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LONE WOLVES NEED TO COME IN FROM WILDERNESS With almost five million people in Britain now working for themselves – and 286,000 in Scotland – the sheer size of the UK’s selfemployed sector is usually enough to convince any doubters that a self-employed revolution is well underway. The meteoric rise in selfemployment – which has grown by more than 50% in just over 20 years – is set to continue.

In terms of pure numbers, self-employment is tipped to overtake the public sector before long – quite an achievement for a group which has grown accustomed to being in the minority and all but ignored by politicians in years gone by.

But importantly, change is

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Scotland – and the UK – is a breeding ground for self-employed people. Chris Bryce, chief executive of the Independent Professionals and the Self-Employed, says it’s time it was properly recognised by policymakers afoot. Self-employment is climbing up the agenda in the UK parliament, and climbing fast. We hope that the Scottish parliament is paying proper heed to this too. Increasingly, our politicians understand that these are the people vital to the economy, the men and women holding the key to future growth.

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So it came as no surprise that the UK government recently made two very encouraging announcements.

In November David Morris MP was appointed as the UK’s first self-employed ambassador, indicating that the Conservatives are ready to take action on the various issues facing the millions of people working for themselves across Britain. In the IPSE manifesto we call for a Minister for Self-Employment, and the appointment of David Morris is the first step to appointing a minister to champion our cause at the heart of government.

On the same day, plans were unveiled to review the current maternity pay system – something else we’ve called for in our manifesto. Granted, action most definitely speaks louder than words, but these

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developments symbolise a turning of the tide, reflecting that self-employment is quickly becoming a hot topic.

While there’s never been a better time to work for yourself, as we all know, the self-employed landscape is far from perfect. To truly unleash the staggering potential of this self-employed army, the UK must become a place where it’s easy to become self-employed, engage with the self-employed and work as self-employed.

In the IPSE manifesto we outline the specific measures that we believe must be taken to ensure this happens.

We’re calling for policy makers to make changes to the late payment system, which is more of a hindrance to the self-employed than a help. Legislation needs to protect selfemployed people from the scourge of being paid late, not leave them frantically chasing up invoices months later.

The next UK Government, of whatever colour, must look into strengthening the Prompt Payment Code and name and shame the businesses guilty of late payment. On top of this, it’s crucial that self-employed people are able to report clients who fail to pay within a reasonable timescale anonymously, and without the fear of jeopardising relationships.

We’re also pushing for tax simplification. The current system is complicated and alienates the self-employed. For years, experts have criticised the way the people who work for themselves are treated when it comes to taxation. It’s become the elephant in the room, and needs reviewing. To make things simpler for everyone, we suggest a full merger of

AS I SEE IT

Four out of ten independent professionals are women, while those aged between 18 and 30 make up one of the fastest growing groups in self-employment.

National Insurance and Income Tax. Just a few decades ago self-employment was the sole preserve of men boasting a wealth of experience and a contacts book to match.

This simply isn’t the case anymore and our sector is as colourful and as diverse as it has ever been. Four out of ten independent professionals are women, while those aged between 18 and 30 make up one of the fastest growing groups in self-employment.

It’s time the UK supported the thousands – if not millions – of young people brave enough to become their own boss. The IPSE manifesto states self-employment and entrepreneurship should be on the curriculum in schools and universities. Arming students with the skills needed to become a business owner is vital. We believe young people need to be equipped with the knowledge to decide whether to enter traditional employment or to work for themselves.The five million or so self-employed people in the UK rely on good quality, affordable, not to mention reliable, connectivity – both virtual and physical. We’re asking for high speed broadband to be rolled out all across the UK to help the growing number of rural business owners and remote

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workers stay connected with the business world and reach their potential. The sky is the limit for self-employment in Britain. The fact that growth in the sector has outstripped growth in permanent employment by three to one in recent times, demonstrates that it is the new way of working and arguably represents the future way of working.

However, for this vibrant sector to hit the heights it promises, the Government must be fully committed to creating a freer, fairer self-employed habitat. Time is of the essence, and with next year’s general election looming, there’s never been a better time to do it.

Chris Bryce is chief executive officer of IPSE – The Association of Independent Professionals and the Self-Employed. With over 21,000 members, IPSE is the largest association of independent professionals in the EU, representing freelancers, contractors and consultants from every sector of the economy. It’s a not-for-profit organisation owned and run by its members. n Twitter – @teamIPSE or Chris Bryce – @CJBryce

BUSINESS QUARTER | WINTER 14

ENTREPRENEUR

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Sarah Chanter works with Erica Moore. These two entrepreneurial women are driving eteaket, a loose leaf tea company that is increasing its exporting value. Sarah takes tea with BQ Editor Kenny Kemp 14,675. That’s a figure etched in Sarah Chanter’s mind. With no formal training, she baked this number of scones when she spent two weeks in Japan promoting loose-leaf tea from Scotland. If anything, it shows entrepreneurs are great at rolling their sleeves up. Sitting in the turquoise teashop in Edinburgh’s Frederick Street, Sarah recalls one of the highlights of her whirlwind life as director of eteaket, the specialist loose leaf tea business.

“I had made eight scones before I went to Japan. When I left I had made 14,675 scones for the high teas. It’s probably my proudest moment. You know, you have to learn to do things somehow. I didn’t know how to export butter to Japan, I know now.”

With Scotland’s Year of Food and Drink ahead, it is interesting to see how a Scottish firm is capitalising on a distinct export market, with an approach that fuses a love for tea in all its glorious aromas and scents, with a digital outlook based around online selling >>

A REFRESHING LEAF OF LIFE BUSINESS QUARTER | WINTER 14

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ENTREPRENEUR

BUSINESS QUARTER | WINTER 14

ENTREPRENEUR and a sharp eye for design. Indeed, eteaket is a template for other start-ups and one that many might wish to emulate.

Is this something Sarah ever thought about when she started studying product design at Edinburgh College of Art? “No,” she laughs. “Tea is an amazing industry to be in. The whole hot beverage market is a unique one, whether it is tea, herbal teas, hot chocolates or coffees. The growth is exciting as well.”

Tea is a global phenomenon and an ingrained part of our British culture, but in the UK it has been the domain of the major companies, such as Tetley, part of Tata Global Beverages; Brooke Bond, once the UK market leader and owned by Unilever; Yorkshire Tea, from Taylor’s of Harrogate; and Twinings, the family-run business who invented Earl Grey tea. Scotland was renowned for Melrose’s tea, shipped into Leith for nearly 200 years, now part of the Typhoo tea brand, whose parent is the Apeejay conglomerate, based in Kolkata.

“I’ve always loved tea; which is a prerequisite for working in this business,” she says.

Sarah, originally from Brighton, came to Scotland to study visual communication and graphic design at Edinburgh College of Art, graduating in 2006. She moved south and became a graphic designer with Lisa Tse, Ltd, founder of the women-only Sorority Club in London. Then she headed back to Edinburgh to work with One O’Clock Gun design consultants, doing work for the NHS, various local businesses and estate agents such as Rettie and Stuart & Stuart.

She also worked on websites and with The Skinny, the central belt’s ‘cool and hip’ arts and culture newspaper.

“In 2008, when everything fell apart and the property market seized up, I was made redundant from One O’Clock Gun because there wasn’t enough work. I landed a job working here through my love of tea and over time built up my strong relationship with Erica.

Then I was asked to do more.”

When Sarah joined Erica Moore, the tearoom in Edinburgh was going well. But the online and wholesale side was still ‘in development’.

This was where exporting expansion could help grow the eteaket loose tea brand.

“The tearoom was here and it was as busy

BUSINESS QUARTER | WINTER 14

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then as it is now, which is lovely. I’ve been able to help Erica expand,” explains Sarah, who was made a director in August 2014.

Erica Moore’s own tale is well-known in entrepreneurial circles – indeed she was finalist in this year’s WeDO Scotland Entrepreneur of the Year awards. Originally from Gourock, she became a litigation lawyer with Kendall Freeman in London and, in December 2008, she quit her job, took a leap of faith, and went travelling to learn about tea. She married fellow lawyer Stewart Moore, who now works for McClure’s in Edinburgh. On winning the Beverage Standards Award in 2012, Erica said: “It was my all-consuming passion for tea and my desire to make leaf tea exciting and accessible to the public that made me get into the café business. I had no experience whatsoever in running a café or business so it has been a rather steep, but enjoyable learning curve.”

Erica, who wasn’t available for this interview as she was taking maternity leave with Faith, her second child, credits Sarah with revamping the lay-out and moving it from a self-service Starbuck-type retail outlet to table service making the cuppa something more special.

“I manage the three business streams. We have a teashop manager, and then I oversee the management of the café. I also run the wholesale and the online as well,” says Sarah.

It was 2011 when Sarah embarked on that eventful first trip to Japan to source teas – and bake scones. She set up a pop-up tea-room in the Hankyu Department Store, Kakuda-cho, Kita-ku in Osaka for a fortnight.

“It was brilliant and insane. The Japanese would queue up for four hours to come and have tea with us. It was the Harrods of Japan on 13 floors, with six or seven storeys of luxury products. At 10am, when the store opened, people were running up the

escalators and there was a surge of people to get into our pop-up tearoom on the ninth floor. It was unbelievable.”

Taking tea from Scotland to Japan, where there is an almost spiritual reverence about the tea ceremony, smacks of hauling coals to Newcastle.

“One of the special aspects of tea is that there are ceremonies wherever you go in the world.

It is like a communicative tool to bond people.

Tea and conversation go hand in hand. So taking the British afternoon tea to Japan, with scones, butter and pots of strawberry jam [from the Fruity Jam Company] and clotted cream, was amazing. For me, one of the best things was working with a new tea-room team, waiting staff and cooks, all Japanese.

I had to have a translator.”

While there was the obvious novelty, it proved that there was a willing market for specialist teas.

“We now export to Mitsukoshi, one of the major department stores in Japan. We would like to do more teashop projects with them in the future to highlight our brand. It would be beautiful and wonderful to do it again. We are also exporting to Hong Kong and across Europe but there is growing interest from United States and Russia.”

Erica made it her job to visit tea plantations in China, Sri Lanka and meet with the tea masters and select the freshest leaves. This was part of her ‘tea pilgrimage’ to source the best leaves. And there are plenty of hill-top plantations to see around the world.

According to International Tea Commission statistics, China remains the top grower with 1,761m kg, in 2012, followed by India, with 1,111m, then Kenya with 369m and Sri Lanka with 336m, while other tea nations are Vietnam, Turkey, Malaysia, Indonesia, Bangladesh, Malawi, Uganda and Tanzania. >>

One of the special aspects of tea is that there are ceremonies wherever you go in the world. It is like a communicative tool to bond people. Tea and conversation go hand in hand

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ENTREPRENEUR

Tea production has grown to 4,527m from 3,879m in 2008. Massive domestic consumption in China and India means Kenya is the world’s leading exporter, followed by China and then Sri Lanka, with India fourth.

In 2012, Sri Lanka made the highest price on international auctions for its tea, at $3.07 a kg, against $2.28 for Indian, and $2.88 for Kenyan tea.

What eteaket offers is an astonishing diversity of tea, with its various tastes. While many refined Scots who eschew builder’s tea have long been familiar with Assam, Darjeeling, Lapsang Souchong and Earl Grey, there is now a cornucopia of teas, with black, green and herbal teas. eteaket have introduced the Edinburgh tea set to Rooibos teas from South Africa, gunpowder tea from China, green Yerba Mate from Latin America, and Gen Mai Cha from Japan.

“It’s interesting how a brand works in different market places. The reason our brand works so well in Asia is the British heritage but also the design and the packaging. It is a strong product on the shelf and its looks different.” eteaket’s market share is the equivalent to a quarter-pound packet of tea in one of these large wooden tea-chests, once beloved by house-removers.

“The market for us is in speciality tea and brands. Our Chilli Rooibos or Blooming Marvellous [a mix of green Chinese sencha

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It is important to go back to the source and see where the tea is coming from leaves coupled with mallow and sunflower petals with vanilla] are unique to us.”

“For us, it is important to go back to the source and see where the tea is coming from.

When you are selling, it helps you understand the process and what goes into it.”

Erica has been helped by Scottish Development International and was part of the mission to Hong Kong. She also attended Anuga, the largest trade food fair in the world in Cologne. A year ago, eteaket was part of Santander’s Breakthrough International trade mission programme to New York along with nine other female business owners. Erica admitted she was perturbed about exporting horror stories to the United States. Perhaps her legal background was kicking in because she said there were concerns about how litigious it can be. But it was a great opportunity and is a potentially vast market for eteaket.

“Four years ago, when I came on board, the online wasn’t something we had developed.

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We only had a handful of wholesale customers and we weren’t concentrating on this side of the business. We now have hundreds and work with distributors and exporters. So our growth has been impressive.”

Growth has been a 220% increase in the last two years, with turnover touching £500,000.

The celebrity chef Gordon Ramsay’s Petrus is also a long-standing customer, with eteaket supplying five Michelin star restaurants, among them Scotland’s Tom Kitchin, a number of top-grade hotels, as well as niche cafes, delis and bistros.

“We don’t supply to the big supermarkets. It is something we have chosen not to do. We like who we work with. We are independent.

People are surprised when they meet me or Erica at a trade show and we say we are a small Scottish business rather than a brand from a multi-national food business. We have the autonomy to go off and do new blends, and launch things that we think are going to work. While the branding is important, it is the quality of the product that sells.”

Sarah Chanter has taken the lead on all the design, working with her old college. She set a brief for the illustrations from fourth-year students. The competition was won by Milly Wood, who was inspired by American folk art and design of the 1930s. The leaping horses, the ceremonial elephants and the flower designs now grace the packets. Milly’s latest

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drawing is on the Chilli Rooibos loose leaf tea, with the package designed by Sarah. The tea is a blend of Rooibos, rosebuds, safflower petals, peony petals and chilli pieces.

“Her illustrations are beautiful and we get so many compliments. We like to add to our range every year.” eteaket has been working with Not On The High Street.com, the award-winning website set up by entrepreneurs Holly Tucker and Sophie Cornish in 2006, and selected for the TechCityUK’s Future Fifty programme.

For the tea specialists, social media has been a blessing with regular updates on Erica’s excursions and the promotion of events, and even live music in the teashop. Does she think they might expand the teashop from its cosy basement in Edinburgh’s Frederick Street?

After all, it’s a must-visit in the Lonely Planet guide to Scotland.

“It’s something we are always looking at.

The internet and wholesale growth has taken off for us. Although, the biggest complaint I get about this place is that there is always a queue, so demand suggests we could probably open an over-spill,” she laughs.

“We have our regulars but there is a mix of people from students, tourists, across the generations, who enjoy over breakfast, brunch and afternoon tea with scones and strawberry jam. We are not aimed at one demographic. I always think it is a special thing to come here.

ENTREPRENEUR

It’s not like going to a high-street chain.”

The ethical dimension of the business also remains at the heart of their thinking, as next year they will be a member of the Ethical Tea Partnership which improves the lives of tea workers. Their charity work is Cuppa For Causes, raising money for Aberlour, the children’s charity with a gift-voucher drop, and Breakthrough Breast Cancer. And Sarah and the team support the Bethany Care Van, which distributes food and clothing to the homeless.

The recent news that the Wee Tea Company has produced tea from its bushes in Scotland at Amulree in Perthshire is also exciting news.

“Scotland has a great heritage with the tea industry. We took part at a tea festival in Laurenckirk in Aberdeenshire, which celebrated the influences of James Taylor, the importer of Earl Grey, and Thomas Lipton, an iconic Scottish business figure. Tea is such a hardy plant, it’s exciting to see if it will grow successfully in Scotland.”

You can already see Sarah’s brain whirring on how tender Scottish leaves might be blended with jasmine or gen mai cha. eteaket is already moving into tea-based cocktails and tea-beers, which are now being taken up by trendier bars looking for something new.

As a 29-year-old, managing a rapidly expanding business, what challenges does she face? “The good thing is no two days are the same, the bad thing is that no two days

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are ever the same. You can come prepared for your working day with a list and then there’s a curve ball with a huge order that wants immediate delivery.

But the sense of achievement when you are able to deliver is brilliant. No matter how hard the day, you’re always picked up by a nice review on TripAdvisor or an email from a happy customer.”

Sarah is methodical about the figures and sales and likes to see everything laid out on spread sheets.“I’ve picked up so much over the past four years, but there’s more I can be learning.”

As Erica’s business shareholding partner, Sarah says they share the load. “We kind of do a bit of everything each. I do a lot of the marketing, design, public relations, online activity, while Erica is doing the potential export growth and tea training – and we both look after customer relationships. Erica’s taste buds for the tea are amazing: she knows what is the best tea, before even drinking it. Hopefully, this is something that one day I will learn.”

Sarah, who lives in Stockbridge and walks to work most days, is a keen runner; she’s hoping to undertake a marathon, possibly the Paris event, and also the Mighty Deerstalker in muddy March. For Sarah and Erica, eteaket is breaking the surface of a massive market.

Meantime, eteaket also sells coffee too, which is roasted by Edinburgh-based Artisan Roast.

But that’s another story. n

BUSINESS QUARTER | WINTER 14

COMPANY PROFILE

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Be the best

Osbit Power aims to be the best. We want to produce the best engineering for the best customers using our best engineers and the best supply chain. We want to create the best value for money while generating the best level of wealth for our staff and owners. And the journey must be fun. That’s a lot of ‘best’ to achieve!

My journey started in 1966 with seven years at Newcastle University gaining a BSc and a PhD, in the Agricultural Engineering Department. This was followed by five years as a lecturer at Edinburgh University. I then returned to the Newcastle department as a temporary Research Associate, and with Dr Tim Grinsted and led by Dr Alan Reece we developed SMD over the following 18 years to be the best designers and builders of seabed trenching systems in the world. SMD was owned and run in the formative years by three engineers. During this time we also bought Pearson Engineering which much later became the basis for the Reece Group, now a major ‘best engineering’ group in NE England.

I established The Engineering Business in 1997, and three colleagues from SMD quickly joined

We must use our skill and persistence to extract money from our customer’s pockets - in exchange for delivering excellence to form the business, owned and run by four engineers. EB is now a world leading supplier of pipelay systems with some genuine ‘best engineering’ qualities. EB was sold to IHC Merwede in 2008 and the sale created significant wealth for the owner-directors and 70 of the staff who received 20% of the sale value.

I established Osbit Power in 2010, with two engineer colleagues with extensive backgrounds in SMD and Pearson Engineering. A fourth engineer originally from EB joined as an owner-director in 2013. OP is entirely owned and run by four engineers. We are determined to provide best engineering value by using clever and experienced engineers working in a structured but low

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Above, The OP team on a ‘Racing day out’ September 2014. Left, MaXccess P35 gangway for Subsea 7.

Right, MaXccess T18 walk-to-work system for the Marubeni Fukushima floating wind farm Japan

bureaucracy environment. I believe that the benefits of creating a successful business should be shared with all who help to create it. We are fortunate that the UK tax regime is favourable to entrepreneurial businesses and to the owners of these businesses. 20% of OP business value is allocated to staff using an EMI scheme. Gains in wealth by owners and staff are only taxed at 10% in most circumstances. The result is highly incentivised staff and owners working together to create success for all.

There is general agreement that the NE England

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region needs to grow and strengthen its engineering base. This can be a combination of inward investment from well-established organisations and expansion of existing businesses. But far more exciting is the creation of new businesses to develop new technology and new ways of doing things. This is where greater wealth can be created and greater value to the region established. We have a wonderful engineering heritage in the region to build on.

The aim is to be world-class in niche areas of technology. We must be flexible and opportunistic

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COMPANY PROFILE

Westermost Rough windfarm cable installation deck spread

to identify where there are difficult problems to be solved and there is funding available to allow solutions to be created.

This region has for far too long, relied on government backed funding to grow local prosperity. We are surrounded by a world full of challenging problems to be solved, and customers willing to pay for good solutions. We must use our skill and persistence to extract money from our customer’s pockets - in exchange for delivering excellence.

Osbit Power is growing rapidly and has increased turnover by 500% to ÂŁ8.5m in the year ending 30 September 2014. Staff employed has grown by 50% over the same period. So a very exciting period in OP development. Getting past the first couple of years with a new business is always exciting and anxious with new people and new customers in new business areas. The accounts are poor and start-up funding is a worry. And you have to pay the salaries at the end of every month.

As we grow there will be different challenges in managing more people and not allowing the business ethos to deteriorate.

The OP team has a wide range of experience over the past 40 years in the design and build of offshore, subsea and seabed systems for many of the leading contractors and operators in the world. OP has supplied systems to the oil and

I believe that the benefits of creating a successful business should be shared with all who help to create it. We are fortunate that the UK tax regime is favourable to entrepreneurial businesses and to the owners of these businesses gas, renewables and military markets. It is well known for personnel transfer systems for offshore wind and larger systems for general offshore operations, all under the MaXccess brand name.

A recent delivery is a MaXccess P35 system for Subsea 7 which was a joint project with Tyne Gangway. The system is being mobilised in West Africa at the moment. OP has developed a range of systems suitable for particular people transfer situations. This year OP has delivered a MaXccess T18 system to Marubeni in Japan for use on the Fukushima offshore floating wind turbine.

Other projects this year include a duel launch system for remotely operated vehicles, a cable deployment deck spread for offshore wind and a 150 tonne shock absorber for trenching plough deployment. Osbit Power aims to create entrepreneurial engineers and has a nurturing environment where people can develop rapidly and take on significant responsibility while maintaining high quality and ensuring safety.

We take on many students and fresh graduates,

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hoping to attract and retain the best to the region.

The offshore and subsea industry in our region is vibrant and varied and this is clearly the best location in the UK for our types of activity. There is real opportunity to expand and flourish making use of excellent ports, rivers and universities and create a new and lasting engineering heritage.

Dr Tony Trapp DL FREng, managing director, OSBIT Power Ltd, Broomhaugh House, Riding Mill, Northumberland NE44 6EG T: 01434 682 505 E: tony.trapp@osbitpower.com W: www.osbitpower.com

BUSINESS QUARTER | WINTER 14

INTERVIEW

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LET’S WORK TOGETHER Ross Martin, the chief executive of the Scottish Council for Development and Industry, says collaboration and respect for other views is the only way for Scotland to move forward in the post Smith Commission world. He talks to BQ Scotland Editor Kenny Kemp During the Second World War, the pioneering Scottish Secretary Tom Johnston set up the Scottish Council on Industry as a substitute for the Scottish Board of Trade. After the conflict was over, the body was merged with the Scottish Development Council, a private sector organisation created in the 1930s by the shipbuilder and industrialist Sir James Lithgow.

The new organisation became the Scottish Council (Development and Industry), now without the brackets. In his 1975 book, The Scottish Political System, James Kellas described the Scottish Council as an ‘omnibus’ body, made up of representatives of employers, unions, local authority associations, civil service ‘assessors’ and individuals.”

He said the council did ‘unofficially what the Scottish Office might be expected to do officially’. Kellas also pointed out that the council was unpopular with then Labour governments because Willie Ross, the Scottish Secretary, disliked its semi-nationalist pronouncements, at a time when Douglas Crawford, a council former chief executive and prominent SNP figure, was campaigning for Scottish industry to be disentangled from English control. That was 40 years ago!

For Ross Martin, the chief executive of Scottish Council for Development and Industry, who took up his position in 2013, the organisation remains hardwired to the economic and

BUSINESS QUARTER | WINTER 14

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political landscape of Scotland but it works in collaboration rather than conflict. During the Scottish Referendum, according to Martin, SCDI was careful to maintain its line of ‘studied neutrality’ but was also tasked with asking awkward questions.

“In the post 1999 period, across the economy and in public policy, there has been a flourishing of individual organisations and sectoral interest groups, and SCDI throughout all of that has had the ability to knit all of this together. It has been able to add specific value, but in partnership and that is a big element of what we will do in the next few years,” he says.

“On the back of previous work, we were able to make a key intervention during the referendum debate, bringing Mark Carney [Governor of the Bank of England] and getting stuck into the whole issue of the currency.” Indeed, the visit of the Canadianborn Governor and his meeting with the then First Minister Alex Salmond in January was a seminal point in the debate. It was a feather in the cap for SCDI to host the Governor’s first public speech in Scotland, following his meeting with the First Minister.

“It took a lot of time to secure this event and I genuinely believe it was a transition point in the quality of the whole debate. The discussion about the policy issues around currency and the relative risks and flexibilities of a Yes or a No outcome moved the debate up a gear from personality driven politics to real substance. We’re pretty proud of that.

While CBI Scotland took intense nationalist flak as it supported a ‘No’ vote, SCDI’s fiercely guarded and hard won reputation as being an independent membership organisation became paramount at this critical juncture.

Now with the Smith Commission’s pronouncements the talk of the political steamie, there is a triple crown of issues that Scotland and SCDI has to tackle.

“If we are focusing on the economy in the next few years, we need to tackle innovation, or the lack of it in Scotland, especially business R&D spend; productivity – and the lack of it – across the public and private sector; and internationalisation – and the lack of it -– all underpinned by the need for modern infrastructure. It is good to see governments

getting this now, and this will be a key focus of our SCDI Forum in Edinburgh in March.”

The Scottish Council for Development and Industry are clear that Scotland’s economy needs to ‘up its game’ on each of these fronts.

How does Ross Martin see SCDI? “It is about being true and honest about who we are as an organisation. Because we range across the private, public and third sectors that makes us unique not just in Scotland, but around the world. It is that collective discussion, that rich diverse mix, that has generated the big interventions which SCDI has made over the years. This is the main attraction for our members – the ability to speak to and learn with other members from across the rest of the economy.”

When preparing for his new role, Martin asked a colleague familiar with the organisation to define SCDI. The answer was: If you want to take the temperature of the Scottish economy, just ask SCDI. “I think this is a good way to describe us,” he says.

SCDI has been well-regarded for its international trade missions taking companies and groups overseas. So how does this fit with other organisations, such as Scottish Development International and now banks arranging overseas missions for customers.

Isn’t there a danger of duplication?

“Our discussion with SDI at the moment is that we can add a bit more diversity, in terms of our membership, or we can provide additional reach in going to different places.

If SDI is going to Chicago, we can then go on to Cincinnati. We can go for second-tier cities and reach out to their economic regions and right down their supply chains. For example, our immediate focus is on Bavaria in partnership with our local authorities in the

INTERVIEW

cities.” Martin had just returned from speaking at the Anglo-Bavarian Club in Munich on the UK after the referendum. He has great admiration for the exporting prowess of the Mittelstand sector that has driven the German economy and been part of the supply chain.

“We have a strong heritage in trade mission work and we can link up the existing ties with an added economic edge.”

With more pressure on public sector budgets, isn’t there a danger of duplication?

“We don’t rely on public money for any of our core work. It is all funded through our membership. That gives us the ability to say to people who are relying on public funding, where budgets are being squeezed and cut, ‘come and talk to us.’ We can discuss different ways of doing things, or getting other partners involved. It’s about spreading the load.”Clearly, Ross Martin, as a physics graduate, was magnetically attracted to the SCDI position. He had been the policy director of the Centre for Scottish Public Policy for seven years.

“I knew of SCDI and I knew what it did because it was operating in a similar space to the think tank. While SCDI was focusing on economic policy, the think-tank was looking at social policy. They were like brother and sister, but SCDI was much bigger and had an industrial and economic heritage. It had a bigger membership and was better resourced,” he recalls.

You could say that Martin has unwittingly been preparing for his current job with a career spanning teaching physics in Fife, and spell as a Labour councillor in Lothian Regional Council, where he became chair of the Lothian & Borders Police Authority dealing with the Fettesgate break-in scandal.

Then after regional re-organisation, he was >>

The discussion about the policy issues around currency and the relative risks and flexibilities of a Yes or a No outcome moved the debate up a gear from personality driven politics to real substance. We’re pretty proud of that

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BUSINESS QUARTER | WINTER 14

INTERVIEW

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elected convener of West Lothian Council’s education authority and deputy leader of the council until May 1999. He was instrumental in helping stimulate economic development which involved the blooming of Livingston as the regional retail hotspot and council headquarters. During the early years of the Scottish Parliament, he established an educational consultancy and then, encouraged by his former Labour councillor and transport guru David Begg, became director of Robert Gordon University’s Scottish Forum for Modern Government in Aberdeen. He was also a director of a planning consultancy for eight years, advising on schools infrastructure projects, and the national adviser to the Business Improvement Districts, and the Scotland’s Town Partnership. In 2013, taking the lead at SCDI, with its profile in Scotland and overseas, was an obvious move.

“The more I looked at the aims of SCDI and the scope of its work – what it had done in the past and the promise it held for future economic interventions – the more it was clear to me it pulled together all the bits I had been doing throughout my career. There was the economic aspect, of course, then there was infrastructure, which I had been working at as a consultant, then on government and public policy at various levels, and also cities working together. Latterly, at the CSPP, Martin had been instrumental in pulling Scotland’s six city regions together to find common ground.

“We had been challenged during our Edinburgh City Region events to look at how the cities should be working together. From 2008 through to 2010, we had international speakers including Chuck Dalldorf, of the League of California Cities. They asked us how Edinburgh interacted with the other Scottish cities: the answer was, ‘We don’t’.”

CSPP took up this challenge and pulled the Scottish cities together and that became the Cities Alliance, which had the Scottish Government as a partner, hosted by SCDI. “I was at CSPP and we launched the cities agenda. One of the drivers for me going for this post was getting back into this space. We had been doing a lot of work on towns at CSPP and we wanted to knit this together with the cities. For me, it was a matter of bringing local, regional and national economies

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We are starting to look at the bits of the country where there hasn’t been so much of a focus. We want to shine a light on this to drive local growth more closely together.” The Scottish Cities Alliance, of Scotland’s now seven cities, is hosted by SCDI, while the recently launched RSA City Growth Commission, which is UKwide, has recently released its ‘Unleashing Metro Growth’, which talks more about the connectivity and amalgamation of the UK’s northern cities. It makes the point that 61% of UK growth is generated in city regions and there is a £10bn investment pipeline for projects. The 15 largest metro areas include Edinburgh and Glasgow.

“We are talking to RSA about partnership and collaboration. They have beefed up their office in Scotland and want to do work here.

For us, it is allowing other people the space and valuing their contribution. But we’ve got a history and heritage of policy making and can

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work alongside them.”

However, the issue of Scotland’s underperforming towns is not being neglected

by SCDI. They have a number of initiatives in Forth Valley, Ayrshire and Fife. “We are starting to look at the bits of the country where there hasn’t been so much of a focus.

We want to shine a light on this to drive local growth.”

At the heart of SCDI’s submission to the Smith Commission is the major issue: productivity.

“There should be an economic benefit test to any new powers for the Scottish Parliament.

It means we must focus on growing our economy in the next few years. We all want to see poverty and social inclusion and mobility tackled, but this has to be about building an enterprise culture.” The productivity gap in

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Scotland is widening, with industrial output not matching the increases in employment. So what needs to be done?

“There are obvious drags on our productivity.

The question is how we identify what these drags are. One of the drags is that split between economic policy and social policy.

For me, the most exciting part of the Scottish Government’s Independence White Paper was Nicola Sturgeon’s bold move to grab childcare as a social policy cost and ram it into the heart of economic policy.”

He says without a decent childcare system, productivity will not improve because we are excluding far too many people, mainly women, from the labour market. And if they do have jobs, they are likely to be less productive and part-time.

“If you have a proper childcare system like other successful countries then women are much more likely to play a fully productive part in the economy. We welcome what Nicola Sturgeon is doing on this.”

He talks about the importance of transport infrastructure for the North-East, particularly the connection between Glasgow and Aberdeen. He is also pushing to improve Scotland’s inter-city rail network, which he describes as “literally Victorian”.

“SCDI is pressing hard on the issue of intercity connectivity, both road and rail. It is just not good enough to have a couple of single track sections between Central Scotland and Aberdeen given the impact on journey times and the quality of the experience, and the unreliability. It was the Cities Alliance that pushed for better wi-fi on the trains, but it is still not as good as it should be.

The reason for that is the lack of joined-up government thinking between Scottish and UK governments because of the way responsibility for different bits are provided. Hopefully, this can be tackled. On the inter-city part, we’re the only country in western Europe that does not differentiate between inter-city quality services and mass regional transit systems.”

ScotRail’s new franchise holder, Abellio, made a big pitch on improving this – so there will be a lot of people, including SCDI, watching from the platform when the Dutch firm, Nederlandse Spoorwegan, takes over in April 2015.“We are talking to Abellio about the rolling stock, speed of transfer, the quality

Our actual export figures in Scotland are really, really weak and need a serious push

of the provision and how they might beef up the inter-city experience. There has to be recognition that whenever public subsidy goes in, it boosts economic activity.”

On the national high-speed connection between London, there are concerns that Scotland is missing out.

“We’ve still to see the full potential of the West Coast mainline as there are bits still to fix, particularly between Wigan and Glasgow.

On high-speed, it is good to see the UK government having a sensible conversation.”

Meantime, Martin says it is important for all of Scotland’s cities to maintain the airport slots they have in the London airport hub.

SCDI held a lively discussion which pitched the Heathrow versus Gatwick runway extension campaigns, but its members have a common view that London slots, whatever the airport, must be maintained, so that Scots can do business in the south-east of England – and get out and connect to markets out in the world.

He says choice is critical, with point-to-point as important as hub and spoke. Better access to markets would help Scotland’s exporting figures which Ross Martin says are ‘shockingly small’. “Some sectors and some companies are world-class and shining lights, and many are SCDI members. The whisky and salmon farming industries in particular are doing fantastically well. They have cracked the internationalisation issue, but there are far too few Scottish companies exporting. 60% of all our exports are down to a small number of firms. Our actual export figures in Scotland are really, really weak and need a serious push.

“Exporting is a huge priority. We are not going to have a robust and resilient economy unless we trade our way out of the recession and

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INTERVIEW

that means internationally.”

SCDI has re-established an International Business Committee to provide stronger leadership and modernise the trade mission work that has been a staple of the organisation since its inception.

“Alongside the partnership with SDI, we want to look at the characteristics of the emerging economy – such as the life science or creative industries – and how do we shape an offer that can be taken abroad. We are looking at the work Entrepreneurial Scotland and GlobalScots are doing and we are looking at how we can support this.”

On the educational front, SCDI has been running the YESC network of Young Engineers and Science Clubs all across Scotland – a project running for over 25 years and close to the heart of Ross Martin, a science graduate.

“There are around 1,000 science and engineering clubs throughout Scotland and they are all doing their bit to promote careers in science and engineering, which is something I am very passionate about. I loved teaching science and I only gave up because I knew I couldn’t give it my 100% commitment when I was a councillor in Edinburgh.“ It was during a parent-pupil night that he realised he wasn’t being fair to his charges when a parent asked if his political career was more important than teaching his child. While he gave up his party ticket several years ago he knows that Scottish politicians of every hue need to speak honestly about the road ahead.

“One of the tasks of SCDI is to take the energy of the Referendum campaign – with 97% voter registration – and channel that into a mature discussion about the economy. It is about focusing politicians’ minds on economic growth and generating the money by which they can improve public expenditure, and tackle what is going to be a really tough few years in public expenditure terms.”

So how will 2015 pan out?

“For SCDI, it is about that focus on the economy, working in partnership and bringing people together. We need to work with decision-makers to think about how we boost economic activity through innovation, productivity and internationalisation.”

If SCDI ever needed a theme tune, perhaps it should consider the Canned Heat classic rock anthem: Let’s Work Together. n

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COMMERCIAL PROPERTY

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Capital’s office take-up performs well but future remains uncertain, Stamp Duty changes will breathe new life into housing market, landlords’ confidence is high, survey finds, Gateway project pitches to prospective investors, almost 80,000 SMEs are poised to move Edinburgh experienced strong levels of office take-up during the first half of 2014, which followed from a good 2013, but question marks remains for the future of the market until the extent of new fiscal powers for Scotland are properly decided, a report reveals.

“What is unclear is how much better this would have been in the absence of the uncertainty created by the Referendum, particularly as the rest of the UK recorded the highest levels of office take-up for five years during this period,” says a special report by GVA James Barr, now part of Bilfinger Real Estate.

“We believe the momentum will return relatively quickly given the existing pent-up office demand from forthcoming lease events in Edinburgh. It is worth highlighting that throughout the UK, the lack of speculative office development during the recession, together with the dwindling availability of good quality office stock, has become a distinct component of regional office markets.

Our Tipping Point research series identified

that some regional cities were falling into under-supply and Edinburgh is one example with less than 2.1 years’ worth of available Grade A office stock in the city centre.”

Take-up of office space in Edinburgh city centre has averaged 554,000sq ft pa over the last 20 years. Over the five years post ‘credit crunch’ (2009 to 2013) the average has been slightly lower at 503,000sq ft pa, which is in line with the average for the previous, prerecessionary ten years of 538,000sq ft pa.

The financial and business services sectors have been the most active, accounting for 32% and 25% respectively of transactions over 10,000sq ft with deals such as Blackrock (77,000sq ft), BNY Mellon (54,600sq ft) and Brewin Dolphin (47,800sq ft). Most notably, the Technology, Media and telecommunications sector has grown in importance, accounting for 16% of deals above 10,000sq ft over the five year period and four of the five largest lettings in the first half of 2014.

These include Rockstar’s move to 75,000sq ft

Barclay House, 37,000sq ft to Codebase (in two transactions) and 20,000 sq ft deals to Zonal Retail Data Systems in both Argyll House and Tanfield. In addition, Skyscanner has organically grown in Quartermile One to now occupy 50,000sq ft.

“We have assessed the nature and quality of existing office accommodation in Edinburgh city centre. There is currently 1.45 million sq ft of available office space of which 480,000sq ft is Grade A. It is worth highlighting that many offices are being converted to alternative, and presently, higher value uses such as hotels, student accommodation and residential rather than being refurbished for continued office use. From an office stock perspective, the lack of Grade A and good quality Grade B accommodation within Edinburgh city centre may drive some occupiers to consider out of town or alternative destinations. As things stand, there are only six existing buildings capable of satisfying requirements in excess of 30,000sq ft on single or contiguous floors in central Edinburgh, “ said the report.

>> The ten largest deals in central Edinburgh over the last five years Property Exchange Place 1 Barclay House 108, Holyrood Road Waverleygate Festival Square, Capital House Atria One, 144 Morrison Street 2/3/4/5 Exchange Place 2 Waverleygate 102 West Port Atria One, 144 Morrison Street 28 St Andrew Square

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Occupier Blackrock Rockstar Amazon BNY Mellon Brewin Dolphin Wood Mackenzie NHS NHS PWC Virgin Money

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Size (sq ft) 77,000 75,500 57,400 54,600 47,800 38,200 37,000 32,300 32,300 30,000

Deal date Q2 2012 Q4 2013 Q2 2011 Q3 2013 Q1 2012 Q4 2009 Q1 2010 Q3 2012 Q3 2013 Q1 2011

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COMMERCIAL PROPERTY

>> Demand set to soar

>> Schools contract secured

The impending changes to Stamp Duty will trigger record levels of activity in the housing market in the southside of Glasgow in early 2015, predicts Shepherd Chartered Surveyors. Normally it has been February and March before home market activity is restored after a festive lull, but Martin Waite, partner at Shepherd’s Glasgow Southside office, anticipates that January will herald record activity levels. “The introduction of the Land and Buildings Transaction Tax, which is set to replace stamp duty next April, is all set to shake up the property market. The tipping point will be £325,000 whereby, if you are buying a property for less than this amount, you will pay less tax.

“This is likely to create a strong demand for both vendors and buyers in the latter bracket to transact before the new regime takes effect.

That’s why, in practical terms, we envisage a very quick and strong start to 2015.”

“In the current set up, the thresholds of £125,000, £250,000 and £500,000 have acted as a ceiling mechanism but the new system is a progressive tax and, hence, will remove the capping effect,” he explained.

Reflecting on the housing market in the southside throughout 2014, Waite said it has been a strong year built on steady growth. “We have not seen the significant swings like other part of the country, such as Aberdeen, but, instead, have seen a natural increase in activity which, in turn, has seen a steady and sustainable pattern of capital growth,” he said.

Scottish business Morrison Construction, part of Galliford Try plc, the housebuilding and construction group, has been appointed to North Lanarkshire Council’s Schools and Centres 21, Phase 2 Framework, which is expected to produce a pipeline of up to £100m schools projects over the next four years. Morrison Construction is one of three contractors due to deliver works over the four-year duration of the framework. The schools projects will be awarded as design and build contracts through a selection process of mini-tenders. Meanwhile, Galliford Try has announced the acquisition of Miller Construction from Miller Group Holdings for £16.57m.

>> £20m deal finalised Property investment firm, the Chris Stewart Group has finalised a £20m deal with Marriott International for its second Courtyard-branded hotel in Scotland in the centre of Edinburgh. The hotel will occupy three adjoining Georgian townhouses on Baxter’s Place, where CSG has begun work to restore the historic buildings. The work is expected to support 250-300 construction jobs. The new Courtyard by Marriott Edinburgh Hotel will comprise of 240 guest rooms, an all-day bistro restaurant, fitness centre and a multi-function meeting room, and is due to open in early 2016.

>> Blue-sky building Work continues on the new headquarters building for Scottish Power in Glasgow, due for completion in late 2015. The development comprises a 14 storey office development with two storey underground parking on St Vincent’s Street. The Scottish headquarters will be the largest single-occupier development in Glasgow for around 25 years, and accommodate up to 1,900 Scottish Power staff across more than 20,000m2 of floor space.

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>> Rental confidence is high The Braemore Index – a new barometer of landlord confidence – shows the outlook for the long-term potential in Edinburgh is good. The index, which reflects the mood of more than 450 landlords across a number of measures, recorded a confidence level of 72.1, with the majority of investors (84%) stating that they see their rental properties as long term investments.

The rental market in Edinburgh is strong with the majority (83%) confident in the rental potential over the next 12 months.

That confidence only dips slightly over 3-5 years (78%) and over 10 years (75%).

Only 13% of investors felt that they have some anxiety over the short term strength of the property market. A high proportion of investors agree (73%) that property is always a safe investment in the long term.

The research, carried out in November, questioned landlords with properties in the capital. Of the 450 respondents, only 30% lived in Edinburgh and only 1% referred to themselves as full-time property developers. 65% of landlords owned only one or two properties and the age range of landlords was evenly spread from 35 to over 65 and between male and female.

Crucially, the vast majority of those who gave a reason for becoming a landlord stated that it was a proactive decision (77%), with only 12% claiming to be ‘reluctant’ landlords because they were unable to sell their property.

Malcolm Cannon, chief executive of Braemore, Edinburgh’s largest lettings agent, said: “The Braemore Index is a fascinating reflection on the private rented sector as the data collected represented a large spread in terms of gender, age, working status and property ownership. The reasons for becoming a landlord were hugely varied but the common thread was an acceptance of property as a long term investment, even when the levels of confidence in the costs associated with letting a property were relatively low.”

BUSINESS QUARTER | WINTER 14

COMMERCIAL PROPERTY >> Gateway to opportunity Clyde Gateway – Scotland’s most sporting new business destination – has been pitching to new investors at property events in London. Recently, the organisation took part in MIPIM’s UK property show, a forum for professionals looking to close deals across the UK property market.

Ian Manson, chief executive of Clyde Gateway, said: “This has been a phenomenal year for Clyde Gateway.

We have been overwhelmed with the interest that the Commonwealth Games generated and with the quality and numbers of businesses that have already made the decision to make Clyde Gateway their new home. It’s clear that the location, the value for money and of course the quality of build available are second to none.”

“The Shawfield development, in particular, is a one of a kind. It’s the largest planning consent in Scotland and the 11th largest in the UK – what an opportunity that presents.”

Over the past six years more than £1.5 billion has been invested from both public and private sectors. The £24m Police Scotland move to Riverside East is underway, and Clyde Gateway is seeking a joint venture partner for Shawfield, which offers the scope to deliver a large-scale modern business environment. It will be primarily Class 4 business space but with ancillary mixed use to support the needs of occupiers, staff and the local population.

>> Aon on board Atria Edinburgh, the City of Edinburgh Council’s top flight office development, has secured another tenant for Atria One. Global firm Aon, the largest insurance broker and provider of risk management services in the UK, has taken the final suite on level one of Atria One, comprising almost 4,900 sq ft of Grade A space, on a ten year Full Repairing and Insuring lease.

The 55-strong Edinburgh team has now moved in.

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>> Tasty deals Graham + Sibbald has secured two restaurant deals, letting the Reform Street premises in Dundee to Project Pie, a new American pizza chain. The premises will be transformed into a 65-seater restaurant. In Perth, Graham + Sibbald and Eric Young & Co, have sold the restaurant premises on Mill Street, beneath the new Premier Inn. This prime site, developed

by Deanway/Muir group, is situated next to Perth Concert Hall. The premises were purchased for £444,000 by Kisa’s, a local restaurateur already based in Kinross and Auchterarder.

>> Ryden on the rise Commercial property consultant Ryden showed its turnover rose by 17% to £13.2m in the 12 month period to 30 April 2014. The firm’s annual accounts also showed a 50% increase in profit and a strong balance sheet with £3.9m in cash and no borrowing.

Bill Duguid, who took over as managing partner last year, said: “The transactional side of our business grew by 38%.

This, coupled with the continued strong performances in non-transactional work, is fuelling the firm’s growth.”

>> SMEs on the move More than 78,000 Scottish small and medium-sized enterprises have itchy feet and are planning to move or expand their business premises in the next year, according to research. As economic confidence and activity levels grow, the research by Clydesdale bank suggests more than one in five (23%) SMEs are planning to expand their existing premises, move into larger properties, or expand into additional locations to meet the increased demand for their products and services. These investment plans are being made against the backdrop of improving confidence and economic conditions for UK businesses. According to the latest official statistics, capital investment by businesses grew by 11% in the second quarter of this year compared to the same period last year.

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>> New fund launched Standard Life Investments, one of the largest real estate managers in Europe, has launched a new commercial real estate lending fund. Structured as a limited partnership, the Commercial Real Estate Debt Fund is designed for institutional investors seeking a reliable and attractive source of income with limited capital risk. The fund has attracted an investment of £100 million from the Standard Life Group Pension Scheme, who view this investment as a sustainable source of yield whilst providing strong risk adjusted returns. The fund will aim to deliver a target of 5-6% per annum return over 10 years.

>> Team gets stronger JLL has continued to strengthen its Glasgow team in 2014. Eight members of staff have been recruited, including four graduates – bringing the total number of staff based in the city to over 60. Alexandra Savelli joins the retail team as a chartered surveyor and Brigid Ryan is appointed consultant within the planning department. Andrew Armstrong, formerly of Ryden, joins the industrial agency as a surveyor while Neil Milligan has been appointed surveyor in the hotels and hospitality group. Mhairi Laidlaw, Claire Watson and Charlie McNaught, all from the University of Aberdeen, and William Rankine, from Glasgow Caledonian University, have been appointed graduate surveyors.

This has been a phenomenal year for Clyde Gateway – the Shawfield development, in particular, is a one of a kind

A MAJOR EVENT TO INSPIRE, MOTIVATE & SHARE BUSINESS SUCCESS

Emerging Entrepreneur Dinner 2015 Scotland: 18th February, Hilton Glasgow BQ Magazine continues to support and encourage entrepreneurship across the UK. Our mission is to recognise and celebrate the contribution that entrepreneurs make to our economy, whilst encouraging and motivating others to succeed in business.

The BQ Scotland Emerging Entrepreneur Dinner is being held in conjunction with MADE: The Entrepreneur Festival 2015, the UK’s largest annual festival of entrepreneurship.

Be inspired, gain practical advice and celebrate as our successful entrepreneurs and emerging talent tell their story. Join BQ and BBC Home News Editor Mark Easton for an evening of chat, celebration and recognition on Wednesday 18th February in Glasgow.

Winning BQ Emerging Entrepreneur of the Year 2014 was an incredible honour that reflects the hard work we have been doing at Geco Industries. The award significantly raises the profile of Geco Industries and being presented at the MADE festival adds to this.

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LET’S NOT BE MIRED BY THE CONSTITUTIONAL QUESTION WHEN ECONOMY NEEDS WORK The issue: It is time for Scotland to look ahead – and way beyond the referendum sparring that has exercised minds in the past 18 months In the wake of the referendum outcome, it has become clear that civic Scotland requires bold leadership and collaboration across sectors to face up to the difficult challenges ahead. That is the consensus of the BQ Live Debate, held in Glasgow, and sponsored by UBS Wealth Management. The widely-held view was that: no matter what the outcomes have been, business in Scotland still needs to tackle a fundamental number of issues to grow, export more and improve its productivity. The Scottish referendum in September 2014 prompted one of the most invigorating public debates in our national history.

It stimulated Scots from all walks of life, encouraging them to envisage a different kind of future for Scotland. While the ‘Yes’ campaigners wanting an independent nation were beaten by the ‘No’ side who wished to remain in the Union with the UK, there was a ‘vow’ made by Better Together that Scotland would be given extra powers, including the ability to raise its own income tax. Lord Smith of Kelvin’s commission on increased powers published its report at the end of November

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2014. However, for many business people and those who work in this sphere, the debate – which is continuing to excite many fired-up nationalists – needs to move to a space where public spending is placed in the wider context of wealth creation, enterprise and taxation.

It is business which builds and creates an entrepreneurial economy so that a welfare state can be maintained. Higher taxation in Scotland than the rest of the UK could have a damaging impact on our country.

The BQ Live Debate reflected the vitality of the independence debate, with some strongly held views – but all handled with good grace and aplomb by chairman Caroline Theobald.

On behalf of UBS Wealth Management, Scott Young welcomed the guests to the private dining room in the Corinthian Club in Glasgow.

“We’ve been in Scotland for over ten years now providing a high quality wealth management and financial planning service to business owners and investors, with a particular focus on people who are considering an exit or have recently exited from their business.” In the run-up to the

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TAKING PART Professor Susan Deacon, an assistant principal of University of Edinburgh and non-executive director of ScottishPower Ian McKay, chairman of Institute of Directors in Scotland and chair of Edinburgh College Professor Brad MacKay, chair of strategic management at University of Edinburgh Business School Stephen Park Brown, founder and managing director of NVT Group, technology integrator for Commonwealth Games and Ryder Cup Robin MacGeachy, managing director of Peak Scientific, and EY UK Entrepreneur of the Year Award 2014 for Manufacturing Paul Nelson, managing director of Allied Vehicles Group, based in Glasgow Scott Young, executive director at UBS Wealth Management Stuart Patrick, chief executive of Glasgow Chamber of Commerce and chair of the Wise Group, a leading social enterprise Professor Russel Griggs, independent external reviewer to the Clearing Banks Appeal Process, and non-executive director of Scottish Enterprise Alastair MacColl, chief executive of BE Group Matt Hoyne, client adviser with UBS Wealth Management In the Chair: Caroline Theobald, managing director of the Bridge Club Also present: Kenny Kemp, Editor of BQ Scotland BQ Live Venue: Corinthian Club, Glasgow BQ is highly regarded as a leading independent commentator on business issues, many of which have a bearing on the current and future success of the region’s business economy. BQ Live is a series of informative debates designed to further contribute to the success and prosperity of our regional economy through the debate, discussion and feedback of a range of key business topics and issues.

recent referendum UBS generated a number of research pieces, but we were strongly apolitical and did not have any agenda. Our concern was to try and address a number of questions that our clients had around how a post-referendum independent Scotland might look. We were interested in the key issues that Scottish private businesses, as a sub-group, might face.

What does it mean for Scottish businesses in a UK and a global context? We are delighted to hear the thoughts of the guests tonight. We

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want guests to hear useful discussion so we can all be better informed.”

THE REFERENDUM RESEARCH Professor Brad MacKay was one of 12 senior fellows and 40 researchers working as part of the Economic Social Research Council (ESRC) programme looking into the independence debate in the UK and Scotland. The aim was to create objective, non-political information that could be fed into the public domain.

“My interest was looking at business. We did a couple of different studies undertaking about 70 interviews with senior business leaders across six industries in medium and large companies, and there was a second study with the Federation of Small Businesses in Scotland.

My colleague David Bell at Stirling University, also undertook a survey with the Scottish Chambers of Commerce.”

“The statistics were relatively consistent across all the surveys, which was surprising to me. We never asked people their political views or how they intended to vote, we were interested in their attitudes to opportunities and risks and how it might influence their decision-making under different constitutional scenarios. My working hypotheses was that you might have expected the smaller businesses to be more favourable to independence than the larger ones. Among the FSB survey, there was a larger percentage that were more sanguine about the opportunities of independence, but the statistics were pretty consistent across the business sector.”

Prof MacKay asked what the major risk was

The preference in our study was to keep sterling and to continue EU membership to business. The currency issue for Scotland was at the top of the list, then after this was taxation, although personal tax rates mattered more than corporation tax. “The argument was that if you look at the UK, the level of corporate tax is relatively low and competitive.

Most businesses in Scotland don’t pay corporate tax, so personal tax was the message that was coming through. It was the same for both small and large businesses. Another issue was the European Union and whether Scotland would continue to be part of it, the preference in our study was to keep the pound sterling and for continuing membership of the EU.” Both large and small businesses pointed to the importance of the single UK market.

“If you are a big business in Scotland, trading within the UK, probably 90% of that is with the rest of the UK, outside Scotland. Businesses were continuously coming back to this notion of a consistent fiscal and regulatory regime across the UK. Once you got below this, one issue was the ability to attract and retain key talent for business, and then there were differences across sectors, in engineering, technology, financial services, oil & gas and

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food and drink. There was some diversity in view across sectors.”

The professor’s findings were: a 50-50 split between businesses who said there were no opportunities and those who said there were from independence. 5-7% said there was an opportunity to invest in their business, but the rest was around various aspects of government support, access to government ministers.

“This was more about the general business environment than the specific business case.

Looking at the frequency of uncertainties and risk against opportunities, around 90% argued that the risks leading up to the referendum, particularly given the lack of fiscal information, outweighed the opportunities. 10% said there was opportunity with independence.”

OPENING GAMBITS Professor Russel Griggs declared he was a ‘Yes’ supporter and chairs pureLifi, a university spin-out using visible light communications to transmit information across a data network. He also spoke about his work as an independent reviewer to the Clearing Bank appeals process where they had undertaken 11,000 appeals and put £50m of new lending back into the UK economy. Stuart Patrick says he is committed to the extension of the successful single market of the United Kingdom to a wider set of people. “The Chamber are committed to the economic growth of the city of Glasgow, within that we are interested in all the economic levers that cities ought to have available to them. We are particularly aware of the imbalances at national and local level >>

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in different parts of the UK.” Alastair MacColl said his company – the BE Group – was in the process of investing in Scotland. “In what looks like uncertain and turbulent years ahead in Scotland, how do we get greater visibility and a sense of what the economic or industrial plan is and how business in Scotland can engage with that plan, almost regardless of the outcome of political decisions.”

Robin MacGeachy, who explained his Glasgow company exports 95% of its manufactured products, hosted the Secretary of State for BIS Vince Cable, and Labour’s shadow business secretary Chuka Umunna, and Alasdair Darling during the referendum campaign. “We were one of the few companies able to stand up and say we were a ‘Better Together’ company. We decided as a privately owned company -– owned by myself and my wife with 230 people around the world – to stay in Scotland. We were very close to moving out of Scotland if it had been a ‘Yes’ vote.”

Matt Hoyne of UBS asked if further devolution and tax-raising powers are happening would there be positive implications for Scottish business? “I’m keen to hear about the opportunities with further devolution.”

Paul Nelson, whose Glasgow firm builds taxis and other vehicles for disabled people and employs 474 people in Scotland, said most of his business is in the UK, and has recently started to export to Europe and the United States. He said he was agnostic about who was in government in Scotland as long as they don’t place further obstacles in the way of his firm investing and growing in Glasgow.

“In Scotland we can be very insular and decide to do things our own way and we ignore the fact that we are part of the United Kingdom with all the advantages. Then, on the other hand, we are left up here by the UK Government in London who forget about us.

They don’t really represent us unless they want to get a political message over to us prior to the referendum. I wonder how many UK politicians have been up since the referendum?”

Stephen Park Brown said his company was having its ‘15 minutes of fame’ after supplying the technology for the Commonwealth Games

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in Glasgow and the Ryder Cup. He said this was a huge feather in the company’s cap after 25 years in business, and employing just under 100 people. He said this success led to the NVT Group winning a contract to deliver IT for the European Games in Baku in 2015.

“I’ve had a long-standing fight on procurement for indigenous Scottish firms. I’ve been disappointed that since the 1990s the Scottish Government has by-passed the local IT industry. It could be a huge source of revenue for Scotland and create a raft of jobs, taking them off the unemployment register and offering them modern apprenticeships. I coined a phrase: ‘Scotland spends about a billion pounds a year on public sector projects – yet we are the biggest exporters of public sector cash in Europe.’ Most of that money leaves the country and virtually none of it stays in any Scottish businesses.”

Professor Susan Deacon spent a large part of her early career in the Scottish political world and says she was involved throughout the 1990s in the whole devolution debate as a Labour Party member, then as an original MSP and the first Scottish Health Minister.

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“It is strange for me to have been on that political journey but in the last year I haven’t voiced my opinions about the referendum in public discussions. In so far as I was involved, it was through my work with other organisations including Edinburgh University, which was about finding ways to facilitate discussion among different people from different walks of public and business life. It was a safe space for them to explore some of the issues that were not explored in the feverish environment outside.”

Professor Susan Deacon stood down from the Scottish Parliament in 2007 to ‘leave the tribalism of party politics behind’ and she is not involved with party politics. “But I am as passionate as ever about changing this shiny wee country of ours for the better. I am passionate about leadership and change in different sectors. What I am keen to explore is how and when we have a grownup conversation about public spending in Scotland, particularly around health and education. It is about how we make some of this sustainable and fit for purpose for the future. Whatever the constitutional settlement

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is – and whoever is the party in power in Scotland – we are going to have to start speaking the language about priorities.”

Ian McKay said as a former trade unionist and then managing director of the Royal Mail he has been on both sides of the bargaining table.

“I have never gone along with the idea that the public sector is too big in Scotland. I have the idea that the private sector is too small. If we don’t start doing something about building the private sector in Scotland, and correcting these basic imbalances, then it will be a Pyrrhic victory for whoever had won the vote. It won’t matter if we don’t get the economy sorted and public spending in control, even if you’re progressive and on the left in politics, if we don’t have the ability to pay.”

Paul Nelson said the message for the UK Government, if they were seriously concerned, was don’t forget about us in Scotland, come back up and see what is going on. “I’d be interested to see if they do come back up.”

THE MAIN COURSE: Robin MacGeachy: “From my point of view, I wish Scotland would stop blaming Westminster and England for its woes. We have the ability here to make a significant change in our own country. I’m passionately Scottish and British.

But I think it would be good for Scots to take ownership – and from an industrial point of view – do things without blaming others.”

Stephen Park Brown began by talking about the procurement process and how Scottish civil servants deliver the framework. “They don’t look upon it as their job to look further than the outcome that they want. They want someone to win the prize of the contract and don’t have any idea about the impact on the local economy – and they don’t really care.”

Yet he says that, later on, the performance of how the country does will have an impact on their pensions. He says his Scottish company is measured against major multi-nationals [he says Microsoft take £300m out of the Scottish economy every year] which can make claims that tick the boxes to win contracts. “No-one in public sector procurement seems to really care about the outcomes.”

“The Scottish Parliament has had all the powers – whether as a majority or minority government – to change that and to do

I wish Scotland would stop blaming Westminster and England for its woes something about this and change this situation. But the civil servants have done nothing and we can’t actually ignore that billion pound of business.”

Caroline Theobald asked what could be done about this. Stephen Park Brown said he has raised this with First Ministers since Jack McConnell. “Even the SNP’s manifesto in 2007 said that 22% of Scottish Government business will be done with Scottish SMEs. They actually had to bin that. Take accountancy – there are very few large Scottish businesses, plcs or otherwise, audited by a Scottish firm of accountants, and did we not invent accountancy? Why do we need the big international players, such as PwC or Deloitte, to do the NHS in Fife? You do not need it.”

Stuart Patrick said it was a badge of honour during the Commonwealth Games to say that £200m of contracts had gone to Glasgow businesses, and over £350m went to Scottish companies.

Stephen Park Brown said that his firm ‘got lucky’ as a Tier 2 sponsor and there was a genuine belief in Glasgow that they wanted as many companies as possible to be local, which proved they could do the job. We had 350 volunteers from schools and universities and 50 modern apprentices and 80 staff. No-one

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else could have done that. It was about getting the experience so we could do something on a bigger scale.”

Ian McKay commended Glasgow on its ‘French’ buy-local procurement process.

“Whatever else was happening in the referendum, a hell of lot of these problems are some we had before the referendum – and will remain problems after. It’s useful for the business community to remember this wasn’t a tsunami or a war, but that in a real and tangible way it affected our economy. It was a decision on a constitutional matter.”

He said that a great deal of UK interest and serious resource was brought to bear during the debate, including Scottish Government and UK Treasury work, with more data than has ever been seen before.

“Yet the day after, a lot of the people who have been providing that resource and stimulating that debate, walk away. They think that it is all done and all finished. That’s my big concern. We need to make sure that both of these governments understand what we want from real politics. The business community now has to really step up. It is not surprising that most businesses kept their heads down during the campaign. During the Smith Commission, businesses wanted to speak up and make their voices heard.”

Professor Russel Griggs: “I agree with Ian. We have to grow the private sector in Scotland and address the key issues of how to do that.

One of the things we need is a grown-up conversation about education and the way we spend our money.”

Robin MacGeachy: “We have a working environment where people have a huge amount of freedom. People come along to our factory – we’ve got table-tennis tables and a golf driving range – and then want to come and work with us. What amazes me are the number of Scottish companies out there still talking about ‘them and us’. They say workers are bad and lazy and need to work harder, but we found the right people. This [our approach] is giving them a sense of expression, worth and being – it is almost as if they own it [the company]. We’ve been able to create something that sadly is not replicated across much of the country. If we don’t sort out education at early stages when people >>

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are coming through, then we have part of a generation coming through who are sadly unemployable and will never get a job. It’s a sad indictment of Scotland. We lose a lot of talented Scots who leave the country.”

Professor Susan Deacon said that there are shared issues and responsibilities and talks of ‘us’ and ‘them’ will only heighten divisions that need to be healed. Leadership and collaboration had to be the key for Scotland.

“The rich terrain is when we bring people together across sectors and find some of that common ground, some of which is valuebased and some about how we take forward a positive approach to our economy.”

Professor Russel Griggs spoke about his work with the chemical cluster around Grangemouth, which was around 11% of Scotland’s GDP. Two things have been concerning this industrial sector: the

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We need to be much cleverer about developing supply chain opportunities change in the oil-energy price and how fracking and conventional gas in the United States has fundamentally altered the way that the firms operate.

“Now Dow Chemical Company is paying 80% more for energy than in its sites across Europe than in Texas. So guess where a lot of the infrastructure investment is going? – into Texas. There is also the impact of the industrial emissions directive they put out. The only politics you get into here is: who can help you best? Is it better to have somebody locally I can talk to, or a minister who can fight my battle for me? The energy market is so complicated with all the carbon floor pricing that a lot of Scottish businesses understand that wherever we go as a nation we will go, but you have to get back to some of the basic questions, about what are we going to do? The energy cluster in Grangemouth is going to have to drop their energy prices by about 20% to remain competitive. We can do that but we need a pragmatic view to some of the directives coming out of Europe.”

Alastair MacColl talked about moving on from the referendum and that exporting was imperative, along with focusing on higher levels of skills to attract inward investors, and also working in key supply-chain clusters.

“We need to be much cleverer about developing supply chain opportunities.

Government works best when it works close to the ground and I think there is an opportunity here that must be grasped by business.

We need to talk about what home rule, devolution or more powers means and how these powers can stimulate economic growth and create jobs.” Paul Nelson said he was down in the UK’s Manufacturing Technology Centre (MTC) in Coventry, one of seven in the UK, but that few Scottish policy people were aware of this – or even encouraged Scottish firms to go and visit it. “Scottish companies

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should be encouraged to use this facility.”

Stuart Patrick took up Alastair’s point about exporting, recalling a visit from Danny Alexander and Michael Moore, both Lib-Democrat Scots in the UK Coalition, after George Osborne’s first budget.

“The task then for the recovery was growing exports and business investment. Neither of which we have done particularly dramatically – particularly in exports – in that time. Very little has happened in our exporting activity and only recently have we seen investment improvement. On top of that our productivity performance is now abysmal because of the reaction of our labour market, with lots of people possibly part-time and self-employed during a time of major demand. We’ve got three substantial economic problems, very little of which were raised in the referendum debate. We are back to those fundamental issues – so what is stopping us?”

Stephen Park Brown said every clever graduate setting up their Scottish start-up is being pushed into internationalisation, without actually doing any business down the road. He said Ireland has done far more to encourage home-grown business to gain Irish contracts.

Paul Nelson said procurement was a problem not just in Scotland but across the UK. “The other huge issue that has permeated government has been the inability to make a decision. Everything is farmed out to consultants who tell you how to make a decision, and this adds time and doesn’t give the government any more security. I make decisions every day: I make 80% right and 20% are wrong. The more decisions I make, the more right ones I make!”

This causes great hilarity – but Paul insisted: “That’s what government needs to do.”

However, several at the gathering pondered the role of the Scottish Office and asked why more UK Treasury officials were not visible north of the Border. It was felt an invisible barrier at the border was being put up, which gave the UK government the opportunity to ignore Scotland.

CLOSING POINTS Ian McKay said that both UK and Scottish Government have to speak to each other more

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openly. He returned to his earlier point that the private sector in Scotland was too small and needed more resources so businesses have a chance. Westminster needed to keep to the promises made throughout the referendum campaign. “There are massive resources available to business through Whitehall departments and equally large resources in Holyrood. But both during the Labour regime – and the SNP for its own reasons – they didn’t talk to each other. They have tended to build a large wall instead of seeking to dovetail all of the support that is available for business. This has got to change. We need to be maximising support from both of these avenues.”

Professor Russel Griggs: “Whatever the people of Scotland will do, they will do. But the issues for business need to be addressed, whoever is in power and wherever they sit. For the companies in Grangemouth area, did the referendum change anything? They might have got a bit more excited. Did the content of the conversation change or has it changed since?

Not at all.”

Robin MacGeachy: “I really would like to see the political parties working more closely together for our benefit, regardless of whether we are independent or not.”

Ian McKay: “I think that what you are doing is the right thing for a country that wants better social values, helping to encourage your people. On the Living Wage, some companies have a real feel-good factor because it is the right thing to do. The private sector can be engaged in doing the right thing – and that reflects the Scottish way of doing things.”

Robin MacGeachy: “Business needs to be profitable to generate cash, otherwise it dies.

But doing something beyond that is important and a lot of Scots, who are more liberal, leftwing, have this understanding.

Stuart Patrick said he was concerned that the Smith Commission has pronounced on full income tax powers for Scotland, yet there had not been a proper debate and research over income taxation and the implications. “I find that really uncomfortable because we have no idea of the financial implications. We haven’t had the same interrogation of that issue as we had of the ‘Yes-No’ debate.”

Paul Nelson: “It is all about values and aspirations. We have to re-invigorate that – not

I would like to see the political parties working more closely together just in Scotland. I’m starting an automotive growth forum in Scotland – because we need a fully-fledged automotive industry here. We export £1bn of automotive products from Scotland and manufacturing is around 15%, so that’s a fair proportion. We’ve companies such as Alexander Dennis and we need to get government to recognise that we exist and create the aspirations in Scotland to build automotive companies and export.”

Professor Susan Deacon: “There is a really big serious question about how we move on from the constitutional question in Scotland. And I think a lot of campaigners for independence would recognise that this is an issue and we now need to re-focus on the issue and challenges that we face together, irrespective of our constitutional future. I look back over

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three decades of being in and around this debate, and I feel there is a huge displacement effect of the time, energy and effort we’ve spent on this constitutional debate in Scotland.

We only have a finite headspace of time and we’ve had a disproportionate focus on the constitutional question. We expected too much. I long for us to move on from some of this and recognise there are other issues.”

Brad MacKay spoke about the two Quebec referendums in 1980 and 1995 and warned that there were similarities to Scotland and the experience led to Montreal losing its position as Canada’s business hub.“What has happened over time in Quebec is that you had 30 corporate head-offices but since 1995, Quebec has lost 20% of its top 500 companies and 300,000 Anglo phone business people left between 1980 and 1995, and the GDP has fallen from 25% of Canada to less than 20%.

So it has been a huge drag on the economy over time. If you look at Scotland, that need not be the case here, but I fear the direction of travel is precisely there.”

He said Scotland must now begin a debate on its national competitive advantage and why it is a good place to do business. n

Satisfying a healthy appetite for information UBS Wealth Management was delighted to sponsor the BQ Live debate on Scotland’s future following the referendum. Whilst we are a global firm; from our base in Edinburgh we look after many of Scotland’s most successful business leaders and investors.

It was clear from the keen interest shown in the reports we produced in the run up to the referendum that there was a strong appetite for any information that could help our clients understand the implications of constitutional change for their business interests and personal investments. That appetite remains undiminished and debates such as those organised by BQ are an ideal forum to exchange views and ideas about how each of us can contribute to a better and more universally prosperous Scotland. Our most recent publication, “the UBS CIO Year Ahead 2015”, details our views and expectations for every major market, asset class and currency around the world. This suggests that economic growth in the UK as a whole will fall from 3.0% this year to 2.6% in 2015. It seems likely that growth within Scotland will be lower than this (the EY Scottish ITEM Club forecasts 2.0% next year) but should still better the Eurozone where growth is forecast to be just 1.2%. Rising business investment, falling unemployment and increased consumer spending are the factors which drive our confidence in the outlook for Scotland and the rest of the UK in 2015. Challenges remain however, including the knock-on effects of a near 40% fall in the oil price since the summer and slower growth in key export markets in the emerging markets and Europe. UBS, on behalf of our clients, will continue to provide helpful and useable investment insight and advice on the issues that matter most, including those that pertain to Scotland’s place in the wider global economy. If you would like to hear more, please contact us on 0131 247 2923.

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BUSINESS LUNCH

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BUSINESS LUNCH

A CREATIVE BUZZ ABOUT THE PLACE Ian McAteer, the founder and chairman of The Union, talks to Jenny Hjul about his personal journey which led to the creation of one of Scotland’s most admired advertising agencies Lunch with an advertising executive sounds glamorous, maybe even a little dangerous.

Perhaps I should leave the car at home and clear my diary for the day. The profession has a reputation – you don’t have to watch Don Draper and Mad Men to know that.

But when Ian McAteer, founder and group chairman of The Union, one of Scotland’s leading agencies, sits down and orders a slimline tonic, I realise that this headiest of worlds has moved with the times and is more sober, subdued and sensible than it was in its flamboyant heyday.

This could have been disappointing but Ian was there, in London, during the crazy Eighties, right at the heart of ad land, and he is forthcoming with vicarious thrills.

He worked for Saatchi & Saatchi, and you can’t really get closer to the action than that.

He joined when they were just taking off and was associated with some of the most memorable campaigns, including BA’s (with the haunting Delibes soundtrack).

“Saatchi & Saatchi was the most energising

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place,” he says. It was 1984, the year after the Tories’ general election landslide, and the Saatchi brothers – Charles (the more ‘secretive’ one) and Maurice, who had helped put Margaret Thatcher in power in 1979 with their ‘Labour isn’t working’ posters – were already advertising gods.

Ian had come to London from the then very left-wing Leeds University a few years earlier to embark on a law career; the winter of discontent was history and punk rock just exploding – “what a fantastic time that was!” he says, eyes twinkling behind pretty cool specs. Law had sounded exciting and studying in England offered a means of escape from Scotland, “the driechest, greyest, most miserable place in the Seventies”. He had dreams of going to Australia or Canada and when he left his boarding school in Dollar he told his friends, “I’m never coming back”.

He joined a respectable chambers and began to practise at the bar, specialising in criminal and family law. But he found it a solitary occupation, and the cases he dealt >>

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BUSINESS LUNCH with –“husbands beating up wives, horrible stories about heroin addicts” – exposed him to society at its worst. It was a ‘class thing’ as well, says Ian, whose father was originally from “a very rough part of Glasgow”, and he felt like a bit of an outsider alongside the Oxbridge graduates.

Visiting the office of a copywriter friend, who worked for J Walter Thompson, he discovered a more natural habitat for his abilities. “I thought, goodness me, they’ve got a bar downstairs, everyone’s running around in jeans and T-shirts, there are lovely looking girls and everyone’s having fun and it’s artistic and creative.”

He wrote to the top 20 agencies and they all turned him down, apart from Saatchi’s, which eventually agreed to take him on as a trainee account executive. His pay dropped from about £18,000 to £8,000 but he was happy.

“When I hear today someone saying I want to change careers but I don’t want to take a step back I say, ‘hang on, why not?’ If you’re starting again you should be prepared to take a step back and have belief in yourself.”

His gamble paid off and within months he was doing film shoots in New York and deals in Casablanca.

“Every Friday, someone seemed to win a pitch and there was champagne in reception,” Ian says. “If I walked out of the office at 7.30pm my boss would say, ‘are you having a half day Ian?’ I’d work until 8.30pm and often there was an all-nighter for pitches…people who were going to the pitch would leave at 11pm so they’d be a bit fresher!”

They’d end up in the Carpenter’s Arms, the pub just around the corner – now Saatchi’s have an in-house pub in the Charlotte Street HQ, called the Pregnant Man (after the famous Family Planning Association ad) – and stay there until closing time.

“We went to lunch every day and drank at lunch, all the time! I’m not saying I don’t drink at lunch now, but in those days it was all the time. Once, we were at an agency away weekend in a hotel in Swindon. Saatchi’s had just become the number one agency in the world. There were 150 people on the dance floor, all completely smashed, and we were all singing ‘We are the Champions of the World’.

It was completely manic!”

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That fear of failure ... at one stage I was so scared, I would go to bed at 8pm because I couldn’t face it He acknowledges that it was the ‘best education’ he could have had – “I feel very privileged to have been there” – and is proud of the agency’s stellar projects, not just for BA but the iconic Silk Cut ads and some of the big privatisation campaigns of the Thatcher era.

As a ‘suit’ or ‘bagman’ he was responsible for selling his colleagues’ ideas, the link between the highly-paid ‘creatives’ and the clients. He recalls his shredded nerves as he went through the signing off protocol with the creative director, another god, only slightly below the brothers on the top floor.

“You’d have a taxi waiting, the client waiting and you’d be ready to go. You’d show him the ad on a board and he’d look at it and go, ‘No, no, no, no, no, no, no’, screaming, get the ad and break it over his knee and stuff

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it in the bin. You were like a minion in the organisation. You’d go ‘ahhhh, what am I going to do’. Maurice would then get involved.”

These days, says Ian, the process is much more reasoned and collaborative, but some lessons have stayed with him.

“I learned very early on that the people who were successful were the people who the clients trusted. And the other thing I learned was that nothing is impossible.”

This mantra was taken to extremes at times – one script for a British Telecom ad featured Thatcher, Ronald Reagan and Mikhail Gorbachev (they almost got the men but Thatcher refused). But it’s a philosophy that has been a key to Ian’s success post-Saatchi.

By the time he decided to leave London he was running about £35m worth of advertising – “not a huge big shot but I did have my own parking space!” He was married, with the first of his three children, and when he was headhunted by Jim Faulds’ agency in Edinburgh he grabbed the opportunity, as much for lifestyle as professional reasons. He had been back to Scotland to see old school friends and thought the capital would be a great place to bring up a family.

He joined Jim as his number two, with the expectation that he would eventually take over. But it didn’t quite work out like that.

Although the business was, according to Ian, “firing on all cylinders”, he was to be tempted down a far riskier route.

“It was the summer of 1995 and the creative guys, Simon Scott and Andrew Lindsay, said we want to start an agency and want you to be the account man. I said, ‘No, I’m about to take over from Jim!’ It was very scary, everything was going brilliantly…and I never saw myself as an entrepreneur.”

He agonised for a couple of months, at last confessed to Jim Faulds [“If he’d offered me something I couldn’t turn down, I’d have stayed,” he says; Faulds hasn’t spoken to him since.] and The Union was born. Ian was 38 and confident that the business would roll in.

It didn’t. Within ten months they were half a million pounds in debt and facing ruin.

“People are risk averse and you represent a big load of risk as a new company,” he says. ‘That fear, when you’re a failure and you’re going to

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lose your house…at one stage I was so scared, I would go to bed at 8pm because I couldn’t really face it.”

The experience was ‘life changing’ but they pulled back from the brink. “We started to win,” he says, “mainly Scottish brands such as Baxter’s and Scottish & Newcastle. We’ve had ups and downs since but that’s the last time we thought of closing.”

He says he is fortunate because he is resilient, thanks to his childhood rather than his initiation at Saatchi’s. Born in Nairobi while his journalist father was editing a string of newspapers in Africa, he discovered selfsufficiency from an early age. He was eight when he and his younger, asthmatic sister were sent off to boarding school in the Kenyan Highlands, and admits he felt a sense of “total, total abandonment”.

He gazes out of the window a lot at this point.

The train journey from home lasted three days and they were truly in the middle of nowhere.

But he got through it, has been back to his school [“It hasn’t changed much”] and found himself cheering the Kenyans in the Olympics.

The survival instinct helped him three years ago when his marriage broke up, something he says was not his choice; though ‘very, very difficult’. It taught him a lot. He is now in a new relationship and agrees that life, though not ‘jetset’, is good. One day he would like to have a base in the Seychelles, birthplace of his late mother and home for his father, and catch marlin and tuna. But he is only 55, his youngest child is 14 and retirement is not yet on the horizon. The Union has bucked what he calls the ‘pretty catastrophic’ trend of the last five years in the advertising market, which has seen most of the traditional agencies in Scotland close down. The premier league companies, such as RBS, Standard Life and Scottish Power, invest their advertising budgets in London, a global creative centre which, Ian says, is like a “super force, a dark star that sucks things in”, including our brightest young talent. “If they were to spend even a small proportion of their total marketing spend in Scotland, which they don’t, it would transform the creative industry.” He measures his words carefully, aware of the village he lives in, but his agency has an impressive line-up of clients, including familiar Scottish names and

BUSINESS LUNCH

Light lunch in a Grand setting If you haven’t been to the Sheraton Grand Hotel and Spa in Edinburgh recently (within the last two years) you probably think it’s still all tartan carpets and oak panelling. Wrong! It has been transformed and its One Square restaurant is light infused and contemporary, Nordic, but nice.

Cavernous rather than cosy, we still managed to secure a quiet corner and Ian was impressed: “It’s much cooler now. I might bring some clients here,” he said. We were given executive chef Craig Hart’s inaugural menu – previously at Gleneagles, he was appointed earlier this year – which is ‘inspired by the very best of the British larder’. Ian started with pan-fried Scrabster crab cake, avocado puree, spicy tomato sauce and cashew nuts, a combination he declared ‘crumbly’ and ‘delicious’. I went for the marinated gravlax of Scottish salmon, dainty and divine. Sticking with the seafood, Ian chose sea bream with salmon dumplings for his main course and found it not just ‘very tasty’ but ‘beautifully presented’. My robust Scottish salmon fish cakes were complemented by perfectly poached hen’s eggs, and Arran mustard sauce. I had a glass of La Pauliere Chablis, described as ‘fresh, light and generous’ – at a cost of £39, A Cloudy Bay New Zealand Sauvignon Blanc is £46! However, the wine list offers something for most tastes and pockets. We declined the warm chocolate brownies, apple and raisin crumble and sticky toffee pudding but I suspect they are several more reasons to return to One Square soon.

The bill for our two-course lunch came in at around £70. www.OneSquareEdinburgh.co.uk

big public sector contracts. One of these is the Scottish Government, which explains his caution talking politics.

What he does say is that the referendum debate – though ‘hugely positive’ – didn’t address the issue of making money.

“I felt that there was a lot of discussion about how we’d redistribute and spend money…but less talk (and no real depth of talk) about how we’d create wealth which, if you think about it, is a harder thing to do.”

Ian has diversified to make his business thrive and has embraced new technology.

He shows me a brochure and then laughs at

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himself – Saatchi’s would have been horrified by a brochure. He remains hands-on, relishes the variety of his job and never switches off.

But social media presentations and ‘data segmentation’ – it’s all far removed from the hedonism of the Eighties, isn’t it?

He mentions a summer party for the staff on an uncharacteristically warm Edinburgh evening, when around midnight half the agency ended up swimming in next door’s fish pond. Advertising people might not put in expenses claims for casinos these days or drink cocktails for breakfast, but it sounds like they still know how to have fun. n

BUSINESS QUARTER | WINTER 14

GROVES ON WINE

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THE GRAPES OF QUAFF

Mike Groves is a geographer who set up a business using sensor technology to identify useful information on maps – such as vineyards.

He and his research team interrogate two fruity suspects I have been talking recently about ‘why geography matters’. As a geographer, I think it does, of course. I am passionate about the subject and think that it is vitally important.

Consequently, I started Codbod, a business that turns the growing tide of data from environmental sensors into useful information using maps and statistics. Geography and wine are, of course, well-known bedmates in the form of the soil, slope, geology, climate and other characteristics associated with the growth of the vine. Indeed, the French word for land, terroir, is a wonderful descriptor which captures that sense of place. I was, therefore, intrigued, at the prospect of testing out two Australian wines that had a geographic twist in the form of an unusual grape mix. The 2011 McLaren Vale Shiraz Grenache Tempranillo comes from Vinaceous – seven wines with seven different personalities.

The 2011 Gioia Blanco, majority Sauvignon with a healthy dash of Pinot Grigio, Voignier and Chardonnay, is the brainchild of Route du Van, winemakers with a love of food and travel. I enlisted four fellow researchers to help me; Rachel, my wife and stout-hearted entrepreneur with a product that sells in more than 40 countries; Tom a respected medic who brought much needed wine knowledge backed by an analytical approach, and two assistants, in the form of Freya and Will, who were allowed to comment on colour and odour until homework beckoned.

Before we got stuck into a slow cooked beef curry, we opened the Gioia Blanco. The consensus on the nose was positive. Vanilla was in the air for the girls, while the boys went down the gooseberry route. Then that first sip. Hmm, what is this? Very subtle and dry; which surprised the

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drinking contingent. As we progressed, the subtlety grew on us, but not rapturously so. The Sauvingnon and Pinot Grigio certainly make their mark and offer a pleasant drinking experience, but this may not be for those whose mantra is ‘I must have fruit’. Curry was then served, and we turned our attention to the red. It looked like it was going to be a big Aussie monster, judging by the Victorian fire eater on the label.

It was perhaps intended to indicate an injection of spice from the Tempranillo. First impressions were hints of caramel on the nose as well as having strong legs. Nothing from our hue and smell assistants, whom by this time, were either still on homework or had defaulted to mobile devices. So far so good.

Tom definitely picked up the pepper on the palate (thank you Tempranillo?), but was expecting more mellowing as

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we moved through the bottle, despite having a good two hour airing before first tasting (the wine that is). Rachel picked up smokiness, perhaps redolent of the 12 months that each component is stored in oak barriques before blending. We gamely went for multiple opinions, in true medical tradition, concluding that the spiciness was a defining characteristic and, as with the white, the quaffing quotient was high.

So, did geography matter? We think yes.

In the battle to win hearts and minds, the geographic grape outliers brought in to make a difference, certainly helped to define the end product. www.codbodtech.com n Thanks to Andy and Pete of Inverarity Wines, 185 Bath Street, Glasgow, G2 4HU. The Tempranillo is £14.49, while the Gioia Blanco is £11.99. Thanks also to Guy’s Restaurant in Glasgow’s Candelriggs, (G1 1TD) where BQ snapped Mike during a ‘working lunch’.

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Havelock Europa plc

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MOTORING

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Petra Wetzel, the Bavarian-born founder of WEST brewery, takes the electric BMW i8 for a spin and falls in love all over again

A BAVARIAN MATCH MADE IN HEAVEN “I like my men like I like my cars: fast and powerful and a new model every year.” This is the quote emblazoned across a mug my oldest friend gave me in my early teens and now I wonder whether it was a sign of things to come. Now aged 40, I am a petrol-head and a commitment-phobe. I am also the perfect age to be having a midlife crisis and buy an expensive car (I like to do things differently so in actual fact I bought a speedboat instead – Super Air Nautique revieXw anyone?)

To my mind, car reviews in BQ were written by blokes: men in suits and boys with toys. Hence why I sent the magazine an email and offered my driving and writing skills.

I was “made” in Bavaria, the land of BMW. On paper this makes for perfect synergy to review the i8, but Germans culture some ridiculous stereotypes and BMW drivers get a bad >>

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MOTORING

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MOTORING

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name in my native land. Nobody in the Wetzel family has ever owned a BMW. They drive the German cars with Olympic rings instead… so I was ready to be wooed. And trust me wooed I was! The BMW i8 is the sort of car which women with large rear ends will adore. It has an enormous backside and looks sexy with it.

The i8 is also the only car I have ever loved in white, which I often find is a non-colour for cars. It looks understated, elegant, somewhat futuristic but also timeless. As first impressions go, I was smitten. As a full-time mum and dog owner and part-time golfer, however, my practical side got the better of me when I realised the boot space of the i8 is aas big as a Range Rover’s glove compartment.

That aside, the scissor doors are ultra slick and funky (I have never had more nine-year old boys tell me I was THE coolest mum at the school gate) but they should come with two warnings: 1. Never wear a mini skirt and 2. always carry a passenger with you to be able

I have never had more nine-year old boys tell me I was THE coolest mum at the school gate to help you out of the car.

Once inside, at first I am not sure whether the cockpit feels refreshingly simple or disappointingly ordinary. However, after a day’s driving I am taken by the simplicity of it all. In theory, it helps you concentrate on the road ahead, but as you will find out shortly, that is just in theory! Having never written a car review before, I Googled a recent review of my assigned car and rifled my son Noah’s Top Gear back catalogue. What I found was that ‘proper’ car reviews can be seriously dull and unless you have a real desire to become an engineering nerd, a test drive would be so much more exciting! I also think some of the boys who have written recent i8 reviews got it wrong. Some reviews argue that the i8 is a brilliant car for straight roads but performs

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below its peers in corners. I bet you any money none of these men got carried away with the adrenaline of driving the i8, turned (while chatting to their colleague) into a one-way street in Glasgow facing four lanes of oncoming traffic and in 1.6 seconds had to perform a three-point turn. Trust me, the i8 turns beautifully. Now get ready for the vital statistics. I am told that the i8 reaches 62mph in 4.4 seconds. I’m not going to pretend that I calculated this on my outings as, quite frankly, I was having too much of a great time just driving the thing without worrying about the numbers. What did enter my mind though was something my son had said that morning when he likened the engine size of the i8 to that of a food blender. Yes it is very small – but the addition of a 129bhp electric motor, which is linked up to lithium ion batteries, makes ALL the difference when whizzing up and down the M8. I’ll admit I was thankful for that little engine as it acted as safety cord in case of not finding any charging points in Glasgow city centre. Luckily this was not the case but it did make me think that should I invest in the

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i8, I would want to see a few more of them around the town. This is where my practical side snuck in again. Could I really justify doing the school run etc. in a luxury sports car? Not really! BUT, the i8 only LOOKS like a supercar with its actual overheads resembling more of a home-brewing operation. And so despite early protestations, by 5pm my son had fallen in love with this sleek petrol/electro hybrid and I too was completely taken in by the whole package.

Would I spend £100,000 buying myself a BMW i8? I wish I still believed in Santa! n West Brewery Bar and Restaurant is in Templeton Building at Glasgow Green.

For brewery tour enquiries email brewerytour@westbeer.com or call 0141 550 0135.

The car Petra drove was a BMW i8 1.5i priced at £102,010 (after government subsidy). Thanks to Edinburgh’s Luxury Car Village, Newbridge, Edinburgh, Mid Lothian, EH288SP. Tel:0844 375 1669

BLAZE A TRAIL

TO NEW MARKETS There’s a universe of opportunity out there. Our export advisers will help you understand overseas business practices and navigate the range of services to help you trade successfully in new markets. The possibilities are infinite. Make the most of them at www.scottish-enterprise.com/international

Infinite possibilities

FASHION The best quality check is the knowledge of the person who makes the boot – it’s a very manual, very human process so of course mistakes can be made, but we try not to make too many

THE HOME OF THE WORLD’S BEST WELLIES Not everyone would happily part with £700 for a pair of rubber boots, but then not all rubber boots are made like Le Chameau’s. Josh Sims caught up with the firm’s MD to find out more Beverley Williams certainly had second thoughts about moving to France to take charge of a manufacturer of rubber boots.

As for many people, for the retail supremo – who has been a senior executive under the likes of Richard Branson and Philip Green – the prospect seemed decidedly unsexy.

Until she saw the boots. “What we have here is a hidden gem that I want to put on a global stage,” says Williams, who took over as managing director at Le Chameau,

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based in Paris, Pont D’Ouilly in Normandy and Casablanca, 18 months ago. “These are not just rubber boots. In France they are iconic.

And they are, I think, the best in class.”

This perhaps explains not only why Le Chameau are the go to rubber boot maker for French farmers, sailors, fishermen, equestrian types and those with country estates, but has also been so for the likes of Louis Vuitton.

When Chanel wanted a rubber boot made – of all things one might not associate with the

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fashion house – it went to Le Chameau. And the reason is simple. The €25m company, established in 1927 by one Claude Chamot and now making some 350,000 pairs a year – half of which, however, are bought by the French alone, who happily wear them around town – places an unusual emphasis on materials. It uses a secret recipe of the highest concentration of natural rubber in the market (no boot can be 100% rubber and be durable), meaning the footwear is that

FASHION

much more pliable and comfortable. But to those materials it then applies the principles of classic hand-made leather boot-making.

Indeed, the Normandy factory, where the company’s more premium models are made – yours for up to £700, which could get you a nice pair of bespoke shoes – has just four ‘maitres bottiers’, whom makes lots of each pair of boots from start to finish. Each comprises the careful application of some 20 to 30 rubber parts, cut much as those for a pair of leather boots are, over an aluminium last. And since each boot is available made-tomeasure in eight calf-fittings – resulting in a more fitted, streamlined style – that means a lot of lasts.

The naturally sticky rubber parts then hold their shape while the proto-boot undergoes Vulcanisation in giant ovens at around 140C, which effectively makes these parts molecularly of a piece – or, in other words, means

there are no seams through which water might enter the boots. Just to make sure, each pair is pumped full of air underwater – with a single rogue bubble causing them to be rejected. More unnervingly, a high voltage is also passed through the water to ensure the boots are non-conductive of electricity.

“But the best quality check is the knowledge of the person who makes the boot – it’s a very manual, very human process, so of course mistakes can be made, but we try not to make too many,” jokes Marc Longuet, one-time bespoke boot-maker and now Le Chameau’s product director, whose father was also a director at the company from 1955. “But making rubber boots is actually a very complex business. The recipe for the rubber has to keep evolving – the right amount of sulphur, the right amount of dye and so on, but even buying the raw material can be tricky. Rubber is a commodity, after

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all, so we buy supplies at least a year in advance and have to be conscious of fluctuating prices.”

If that makes the product sound all too workaday, note that the top of the range styles are also leather-lined, an idea revolutionary to the rubber boot market back in the 1950s when Le Chameau introduced it. Fortunately for the customer, only the best leathers – those that might be suitable for the uppers of a decent pair of shoes – are able to survive the Vulcanisation process unscathed. These are, if you like, the John Lobb of wellies, with styles the likes of the Saint-Hubert, Vierzon and Chasseur Le Chameau’s very own classics.

“I’m very much fixated with product. That’s what it comes down to in the end – whether the boots are any good,” says Williams. “I’ve spent a lifetime working in fashion retail and I think that is what the customers want more and more now. That’s what I love about the story of Claude Chamot – that he started the company after going out and actually speaking to farmers, hunters and fishermen about what they wanted in a boot. And then he decided to do something about making it.” n

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EQUIPMENT HOW WE MADE IT BIG TIME

The iconic – and unashamedly macho – Panerai brand of oversized wrist watches have become ultra cool almost by accident, as Josh Sims discovers talking to the company’s enthusiastic CEO, Angelo Bonati Whichever way you look at it, Panerai is big – culturally, horologically, but, above all, literally.

Size has become its calling card. While other companies use gold or diamonds, heft is the factor that gets a Panerai watch noticed on the wrist – that and the fact that its wearer, finding few shirt cuffs will button up over their chunk of metal, will doubtless have no choice but to wear it nicely exposed. Among its bigger wristwatches is one that sizes up at an impressive 60mm diameter. Its smallest is 42mm, enough for Panerai to lay claim to having pioneered the trend for out-sized timepieces which, over a decade on, is still with us.

“Size is what made Panerai feel very new.

Panerai’s personality is about being large. And it’s still working that way for us. Big matters and makes us stand out,” says Angelo Bonati, the dapper don who was appointed CEO of the company 14 years ago, when, frankly, mostly only Loope-wielding nerds had really ever heard of it. “Of course, big is not for everybody, and it means we’re not going to do ladies’ watches any time soon, even though around 15% of all our sales are to women buying for themselves. I’m not sure what the appeal is to them. Maybe they think of these watches as being protective, like wearing a good piece of armour.”

You could certainly do a lot of damage with

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a Luminor 1950 Left-Handed 3 Days (47mm), a Radiomir 1940 Chronograph (45mm) or a Luminor Base 8 Days (44mm), among the company’s 2014 models. For each, almost inevitably, demand has been enthusiastic. But why? Panerai, after all, was the brand from nowhere, largely invisible until the 1990s and now a powerhouse watch label owned by the Richemont luxury goods group. It had history

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on its side – it had been founded way back in 1860 by one Giovanni Panerai, putting it on a par with many other esteemed watch companies. But for decades its output had been minuscule, verging on non-existent.

Geography arguably offered a point of distinction: the re-born Panerai may have been made in Neuchatel, one of Switzerland’s watchmaking centres, but it hailed from Florence and, tellingly, was headquartered in fashion hub Milan. Certainly Bonati argues that this made Panerai memorable, but it is hardly the makings of a cult.

“When people buy Panerai they buy history – and then a watch. So that Italian background is 100% important to the success of the company I think. The best way that we have built the brand is by putting that Italian element first,” he says. “It even helped that originally Panerai was from Florence, of course, because that is one of the best cities in the world for art and culture, so there is always that stress on the beautiful and aesthetic, which is very Italian.”

Not that beauty was high on the agenda of Panerai’s only customer come its last glory days, during the 1930s, when it was making diving watches, as well as compasses and depth gauges for the Italian Navy, and more specifically – and more exotically and marketably – for its commando units, those

EQUIPMENT

heroes of national survival during World War Two, once the British fleet had won control of the Mediterranean. In this, in its distinctive lever bridge device, and in its size – which Bonati chose to retain, even exacerbate, when Panerai was relaunched – the brand clearly had a certain appealing machismo, which Bonati doesn’t deny.

“I suppose that, yes, you would have to call Panerai a rather macho brand – it’s just part of its heritage,” he says. “It’s not so macho these days perhaps. As every other brand went through a phase of adopting Panerai sizing, to extremes in some cases, we learned to be more balanced. But sure, an Italian masculinity still comes out. And that tends to be on the particularly macho side – though I like to think it’s nicely rounded too.”

But is a Boys’ Own tale and what some might call the gimmick of scale really enough to explain Panerai’s revival? After all, not only is Panerai one of the most sought-after watches – in part a product of carefully and cleverly controlled supply, from a company that could make and sell many more watches – but it has also become one of the most collectible. And not just to the militaria buffs who favour its Marina Militare and Radiomir models (with its innovative radium-based luminosity), nor the Rolex fanatics who knew that their brand of

choice had supplied a version of its Cortebert pocket watch movement for the Panerais of the wartime era. Rather, it has become a Patek Philippe for the 21st century young gun, and an investor favourite: a pre-1990 Panerai could once be bought for $1,000 or less. The same would now cost you well over $50,000.

“For some 60 years of its history Panerai only produced perhaps 300 units a year – and we continue to keep the quantities low in order to keep that exclusivity. And now there are a lot of people who can afford a lot of watches – so they want something very exclusive,” argues Bonati. This was something recognised early on, when Richemont, celebrating the Radiomir’s 60th birthday, conveniently uncovered 60 dead-stock examples of the original Rolex movements, fitted them in a platinum replica and promptly made back its

money; one of these too would now be worth at least 15 times its original price. “I know we could sell a lot more watches than we do, but we’re careful to keep it rare, so to speak. We want to expand more by upgrading what we do rather than by selling more of what we already do. We’re not really into just building market share.”

Although the ingredients are all there, how they so successfully mixed seems a mystery, and that’s even to Bonati – the watch industry veteran who can be credited with reinventing Panerai after Johann Rupert, executive chairman of the Richemont group of swanky brands, bought it in 1997 for next to nothing; the veteran who, for the first six months following, ran the company by himself – that is, literally, on his own.

“Sometimes things happen in your life and you really don’t know how. You can make an assessment of it in retrospect but sometimes you still can’t look at a luxury brand and know how it became luxury,” says Bonati, looking genuinely perplexed by it all, but also rather pleased. “There’s no mathematical equation to it. There’s an element of process you can manage. You have to be careful to see luxury status when it comes and work on it – so if being Italian is fundamental to the brand, you have to make sure you keep it there.

Yet even so not all luxury brands are successful and that’s not to say the people running them are stupid at all. It’s just a very complex happening.

“The fact is, if you can’t manufacture cool, which you can’t – or at least, not very easily.

From a business point of view, all you can do is make sure you make good watches and that the watches aren’t everywhere. You can follow the cool rules but, really, coolness just comes from the market.” n

I know we could sell a lot more watches than we do, but we’re careful to keep it rare, so to speak. We want to expand more by upgrading what we do. We’re not really into just building market share

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BUSINESS QUARTER | WINTER 14

ENTREPRENEUR

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THE TECH OF THE TOWN

A 360° camera made in Scotland is set to transform a number of industries.

BQ’s Kenny Kemp met NCTech founders Cameron Ure and Neil Tocher to find out more Side-on, it looks like a monochrome owl drawn

by Picasso. But the iSTAR has four lenses in a robust box no bigger than an ancient Box Brownie camera. To many, it’s an object of stark beauty. It is also digital technology that could re-shape how we see our world.

Tucked away in Braid Road, near the Morningside station clock in Edinburgh, is an amazing business that – given a good head of wind – is ready to flourish in 2015. The roll-call of companies keen to find out more about NCTech’s iSTAR and its sensor technology is outstanding; Google, Sky TV, Pinewood Studios, UEFA, the FBI, the MoD, and China’s equivalent of StreetView. The camera can even be mounted on a vehicle, lined to a GPS position system and can be used for highresolution 360° mobile street mapping.

The founders are Cameron Ure, the chief executive, and Neil Tocher, the chief technical officer, and they have gone through the full gamut of emotion to build the iSTAR. It has not been easy and there have been detours and delays, but the company is moving into a marketplace where the demand for 360° vision is increasing rapidly. The iSTAR is an easy-to-use panoramic camera delivering high resolution images in seconds. Its laser precision is a key selling point, as it captures images in high resolution, so that this data can be collected and used in a number of

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industries and formats. But the Edinburghbased brains have added another proprietary software layer to this device which works with laser-measurements for fast capture of data.

This means it can stitch images together with 3D laser distance scanning used by surveyors, architects, and designers. And NCTech sees new applications with Building Information Modelling (BIM) which shows potential customers what a building will look like.

NCTech is coy about who it has been speaking to about such applications, but we can say that defence and security services are keen. “All we can say is that we are working with a lot of agencies here in the UK and in the United States. But our main markets in 2015 will be in more commercial activities, with interest from China and the United States. We’ve also been working on the wider over-lay market, especially in laser scanning,” said Neil.

Neil and Cameron, both in their early 40s, have been working for nearly 20 years together in the sphere of 360° cameras, first used to show house hunters the layout of homes on estate agent websites.

“When we built iSTAR we initially specced it as high resolution as possible for the opportunities. We are much further down the track now. While we wanted this to be as robust and as fast as possible for the military and the police, our experience with 360°

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cameras gave us a wealth of knowledge about the market and what products were out there.

We knew the pitfalls and the flaws, and with the iSTAR, we’ve been able to get rid of many flaws, and we have made a very precise and accurate product. It is 2microns of accuracy.

Every product is machined from solid metal.”

It hasn’t been an easy ride developing such a revolutionary piece of kit. Originally NCTech wanted to outsource production and assembly of the camera, but alarm bells rang with minor flaws in the early prototypes. So Cameron and Neil decided to take control of their own production, which meant recruiting and employing an engineering and software team in Edinburgh. It was a rocky time.

“It was all hands to get our first units out in the last weeks of 2012. In 2013, we shipped our first 100 iSTAR units.” But there were still teething problems in these early months with calibrating the sensors, and it has taken extra time to get the camera pin-sharp.

“It took us time to figure this out and it was good that we had our own technical team here to work this through. Our own engineering team helped with these initial units. We found that a tiny, single component from a supplier was not robust enough and this meant we had to recall our cameras and fix the problem.

We got them back out again and they are all working perfectly,” says Cameron.

Indeed the iSTAR camera is a stunning piece of digital engineering, with outstanding results.

But it is the range of applications for this 3D camera that is making it such an attractive product. “Our view is that if it was easy, then it would have been done before. It is always the hard things that take the extra effort. 2013 was a hard year for us and our investors and we had to batten down the hatches.”

The company, with 12 people, has built an impressive team with Dr Mansour Ahmadian, head of engineering, Claire Morand, lead software engineer who joined in 2014, and David Munro, the lead electronics engineer.

The commercial team has been bolstered

by Andrew Baddeley, who worked for BAE Systems and had his own panoramic business, who has been joined by commercial director

ENTREPRENEUR

Chris Dryden, formerly of 3D Scanners, which was sold to Nikon Metrology. Chris will be working in the US and Asia.

In 2014, the iSTAR development continued but it was vital to ramp up production to meet the demand for this revolutionary apparatus.

“This year has been good and we’ve now started to roll out the camera in numbers.” For NCTech’s potential customers, the issues that required an iSTAR camera had not gone away, indeed it is growing. For example, the nuclear industry was interested in buying a whole set of cameras which it inserts into the radioactive pipework of power plants to check for any cracks in the pipes in 360°, high definition.

This has the potential to save hundreds of thousands of pounds on inspections, and so the customers agreed to wait to get their iSTAR cameras.

“This project is still on the go and it is about working with these partners and keeping them up-to-speed about delivery. Overtime, our technology and hardware has gone from strength to strength. We’ve put a lot of effort into developing the software to match the iSTARs,” says Neil. Cameron Ure explains why the £4,000 camera is useful to the nuclear plants. “You can spend a lot of time putting lead around it. But the point is that our camera will save time. Our camera will do its job and then it will die. It will not survive in this harsh environment. They will get a few uses out of it and then as any radio-active dust catches it, then they have to dispose of it.”

While the military, security, police and nuclear were keen to be early adopters, the engineering and construction industry now sees this as a brilliant tool.

“They have latched onto us and see us as a perfect product to complement laser scanning, which is a totally different sector than where we were looking originally. Laser scanning has evolved in the last decade and is already one of our biggest sectors because of the emerging nature of building design and architecture. It is exploding and we’re on the back of that. They have bigger budget in this area and there are more of them,” says Neil.

NCTech has pushed into this measurement >>

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ENTREPRENEUR market where the likes of camera-makers Leica Geosystems, Trimble, TopCon, and Faro are market leaders with complex laser machines, from £35,000 to £100,000, and NCTech have developed ColourCloud software to suit.

“For the last year, we’ve put significant effort into ensuring that this product ticks a lot of the boxes in the engineering sector working with laser scanners and as a separate product which complements what they do,” says Neil.

Each 360° laser scan involves millions of points of measurement – known as geospatial measurement – which are then put on a computer to create an accurately-mapped 3D image, which looks like a reconstruction. But there is no actual colour information on this.

“Where we come in, we give colour to this data and this puts a real-world perspective on these measurements. The industry is really keen to have this done instantly. They can do it but the processes and workflow have been very difficult and time-consuming, up until we came along. In the past you have been trying to match photography to highly accurate measurements, and it doesn’t match. This is where iSTAR comes in, because we have engineered it so accurately. It is automatic – you push the button the and our images are then matched to the laser information. That has never been done before.”

The proof is in the astounding quality of the iSTAR image which can be superbly overlaid

by ColourCloud on the laser data. On a 360 ° tripod, the Leica C10 laser scanner takes approximately 20 minutes to capture 56 million points of data, while the iSTAR’s Fusion image in high definition takes 50 seconds. For ultrahigh definition, it takes just over two minutes and every single dot from the laser scan has had a colour match. “It is not just a picture you are looking at but a 3D model. Our software can be used with others in the industry. You can also use the laser measurements in our picture too. This is a significant development for the industry because scanners cannot take pictures in the dark or low light,” says Cameron. For the police, it means forensic photographers can take a 360° image of a crime scene, even when the only available light is from street lamps. It is so accurate that for motor accidents it can even make out the ripples in the concrete road surface, all precisely

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It is a very small company but the potential market is really big measured. Forensic Collision Investigators at Warwickshire Police use the camera at the scene of serious accidents. In June, an iSTAR was used in providing panoramic crime scene evidence for a Birmingham murder trial which resulted in the 26-year conviction of the murderer after a burglary.

“The camera sensors are aligned to pick up tiny targets down to individual pixels. It is because we have machined the camera so accurately and build the calibration software, we can take our image and map it to scans, often to 200 million points of data,” explains Neil. The next phase for NCTech is making the camera perform well in the mobile sector of engineering, mounted on a moving vehicle.

While the optics are modified by NCTech, again it is the software that is ground-breaking.

Both Cameron and Neil were in Shanghai in November speaking exclusively to a Chinese surveying company about street mapping. [‘China doesn’t have Google, or StreetView’, reminds Neil.] NCTech is also in advanced discussions with a large global company with the possibility to roll out tens of thousands of cameras, which will turbo-charge the company’s development.

“Our volumes are multi-million pound. We have a big production facility on an industrial

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estate in East Lothian. The lenses are made in Asia and shipped back to Scotland. We had to retain all the assembly and production to maintain our quality and we now have 80% of this in Scotland. We are looking at producing up to 500 cameras a month, some of this might be out in Asia,” says Cameron.

The two founders retain a large slice of the equity, but have had help from rounds of funding from Archangel Informal Investment, Scotland’s largest and longest-running angel group, and the Scottish Co-Investment Fund.

Colin McGill is the NCTech chairman.

He was divisional chief executive with Bank of Scotland Corporate Banking before becoming an angel investor. Mike Rutterford, a cofounder of Archangels with Barry Sealey, had taken a table at the Entrepreneurial Exchange annual dinner in November 2011 and invited a number of people including Neil Tocher. Mike recalls the start-up didn’t have a chairman.

“I was enjoying the chat and the dinner and I spotted Colin McGill chatting to someone else.

I thought, ‘Eureka’ and said to Neil and ‘you are sitting opposite your new chairman.’ Three weeks later he had joined the board.

Colin says: “It is a great business. The added value is the software and this is designed and made in Scotland. It is a very small company but the potential market is really big.”

Neil says: “The iSTAR is not a one-trick pony.

It has to be as adaptable as possible and integrate into other systems. It has been flown on UAVs for example. China is interested in this because precision farming is a big thing and it can use drones with iSTAR to monitor crops. We’ve got interest from Sky News and Google.”

Once production hits its target, the company will be in line for a £30-50m valuation – and then more. Most interestingly, NCTech is a niche business working alongside the biggest players, such as Faro, Trimble, TopCon and Leica Geosystems, and when the time is right, they are likely to have plenty of interest in buying the Scottish business. With angel investors always keen to gain a return on investment, a future trade sale might be in the offing. Neil adds: “All our customers realise that the iSTAR is a superior device. We’ve got something very special here but we have to keep developing. n

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INTERVIEW

WINTER 14

WANTED: TRAPEZE ARTISTS FOR THE IT SECTOR Steve McCutcheon owns PRG, one of Scotland’s specialist recruitment firms. He talks to Kenny Kemp about the hunt for experience and talent at the crossroads where IT meets financial services >>

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The bellwether of the Scottish economy is our specialist recruitment sector. Those students of the ‘talent market place’ can divine a great deal about the state of the nation by the kind of jobs on offer. And while the days of the circus animals in the big top might be over – there is still a need for ‘the trapeze artist’.

These are a special group of high-wire contractors who swing from one job into another without touching the ground or falling into the safety net. Steve McCutcheon, the founder and chief executive of PRG, one of Scotland’s most successful recruitment firms, says the ‘trapeze artist’ is a sought after individual working on change programmes, especially in financial IT or oil and gas.

“In the contract market, we will place people several times over many years. It also applies to the permanent market, but not as frequently.

For contractors, it is typically a six month to a year-long project or programme. When we know a contract is coming to an end we help to line up the bar, so they swing into another position. You could call them ‘trapeze artists’.”

PRG, with offices in Glasgow – a refurbished town-house in West George Street – and Edinburgh, has been around the block and understands the dynamics of finding and retaining people in the depths of a slowdown.

“Our experience was that in 2008 we started to see things slowing down,” says McCutcheon. “We made some changes internally to deal with that. We are still recovering. In 2008 we stopped growing as a business. Since we started in 2002, we had grown fast – and pretty steadily. Then, from 2008 until 2012, we were pretty flat and managed not to shrink,” he says.

For a recruitment firm working in financial service, the banking collapse could well have been the death knell of the business.

Permanent recruitment by the banks during the dark days of the collapse fell off a cliff, yet there was still an active contract market, keeping a trickle of income coming in.

“Inside the banks there was a focus of reducing permanent recruitment – or the spending on permanent recruitment – but specialists in risk management and regulatory issues were a hot ticket.”

In 2012, it was PRG’s tenth anniversary and the privately-owned company took a moment

BUSINESS QUARTER | WINTER 14

There is barely a household name in financial services in Scotland that isn’t a good client of ours. We are doing more business than ever... across a broader range of sectors to reflect on where it was going.

“We thought that we saw the market improving with investors coming in and decisions being made. So we made investment decisions of our own. It was a simple strategy: to grow our historic core businesses and enter some new markets that were complementary.

We were in accounting, finance and business change, so we moved into the sphere of business and financial IT. Historically, this was something we didn’t do. Yet this was an obvious opportunity for us, so we invested in our IT practice.”

The strategy was to grow the existing business, and enter new practice areas where there was not such an obvious footprint, but in sectors that were doing well.

“We recruit people who – relative to the job market – are high-scaled, high-knowledge and relatively highly-paid. Therefore, there is good opportunity for us to add value to the client, it’s not just a commodity and transactional type of relationship. We can help companies add value by the selection of key people. This was an opportunity for us.”

PRG has worked with the biggest financial service corporates in Scotland, such as Lloyds Banking Group, with its Bank of Scotland operation, Standard Life, Aegon, Barclays and Clydesdale Bank and Ignis Investment (now part of Standard Life Investments).

“There is barely a household name in financial services in Scotland that isn’t a good client of ours. We are doing more business than ever – but as we’ve grown this has become a smaller proportion. We are doing more business across a broader range of sectors.”

“In very large businesses, there was a big finance department and big IT departments.

What we’ve seen is big finance functions more involved with business drivers, and they have been looking at cost savings and efficiencies.

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“This leads to a lot of programmes and projects which are now under the banner of ‘business change’. This has become a discrete specialist function, where key people are involved in executing change programmes.”

He says this expansion has been driven by increasing regulations, governance and risk management – especially the requirements of the Financial Conduct Authority, the Prudential Regulation Authority and the wider demand of Basel III and capital ratios.

“A significant amount of this change has had a major component of IT solutions – and this is about storing big data for regulatory purposes.

Business change and IT work very closely together on this.”

Salary scales are also rising again for key individuals. “As hiring activity has increased, candidates are choosing to move jobs. There has been a shift in favour of finding the best talent and that has led to a shift in salaries.

This is supply and demand in action.”

A candidate with 20 years’ experience in IT projects within financial services joining a new banking outfit can earn £100,000 a year.

“There is a difference between permanent and contactor. Contractors typically earn more because relatively speaking they have a more insecure position. Those guys can earn from £450 a day up to £1,500 a day in both Glasgow and Edinburgh. On the permanent side, people earn less. But someone with 20 years’ experience with business change and project management in a technology function, then they can earn six figures. That’s a reasonable salary scale.”PRG are not active in the new graduate market.

“It is unusual for us to recruit new graduates.

Young people might be good academically but they don’t have work experience. Our clients want people with skills and knowledge.”

Is this changing as tech-literate graduates who

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have grown up with social media are coming out of university and college?

“There is no doubt the whole digital space is huge and we do a lot of work in that area. But our clients want experience in the workplace on business projects. They might well bring in entry-level people as well to join the teams, but that’s not our focus.”

PRG’s finance business is predominantly people who are based in Scotland. Less than 10% come from England and overseas. However, PRG’s expanding oil and gas practice is the flip-side, with almost 70% foreign nationals, people from England or Scots who have spent their working lives overseas. The IT practice is bringing people from all over the world, and India is a big source for us.”

Is Steve McCutcheon concerned about the

influx of recruitment websites and the growing significance of Linkedin?

“I spoke to a client last week and they put an advert on S1.jobs and received more than 400 responses. The right thing to do is to consider each of those and reply to everyone.

This might be a ‘Thank you for your interest, but we are not going to take you forward’.

This is very time consuming. I see our job as a recruiter as giving our clients what they need, and that’s not always what they want.”

He says sometimes a client’s specific wishlist does not match how much they are willing to pay – and they have to adapt their expectations.

“It might be what they want, but perhaps not what they need and it might not even be achievable. Our role is to ask, are all of your

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INTERVIEW

requirements really essential for what you are trying to achieve? If the client insists that’s fine, we can say ‘we can get all of this for you, but you will have to increase your budget’.

Once it is agreed, our role is managing the process and presenting the candidates.”

The high-end recruitment sector is buoyant in Scotland with firms such as PRG able to make decent profits.

In Scotland’s job circus, people like Steve McCutcheon are the ringmasters.

Steve repeats PRG’s mantra that it is about ‘adding value’, finding people for clients with ten years’ worth of experience and problem solving with personal skills who have delivered successful outcomes.

“This is our track record and that’s what clients want from us.” n

BUSINESS QUARTER | WINTER 14

BIT OF A CHAT

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with Jock Yuler >> Very Important Principle I tip my Tartan Tourie to Steven & Graham, carpetmakers extraordinaire in Bath Street, Glasgow, since 1947. A wee burdie told me that when asked for a bespoke tartan carpet for the recent bling-tastic MTV EMA Awards in Glasgow, they were told they would get, instead of payment, free VIP tickets. S&G told the luvvies they don’t do freebies, and that if the Queen paid full price for her Buckingham Palace rug, then One Direction, Nicki Minaj, Enrique Iglesias, Ariana Grande and others can shimmy down a paid-for carpet. Fair play!

>> Cream of all faux pas Sad to see the passing of the great Jack Bruce. I once found myself chatting to the Cream legend at a party in Aberdeen.

On the subject of rock music, he seemed incredibly well-informed. After a good half an hour, I said: “Sorry, I didn’t catch your name.” ”Jack… Jack Bruce,” he smiled.

I nearly disappeared through the gaping holes in the floor-boards.

>> High jinks, high up A Scottish acquaintance was recounting his flight back from Afghanistan after a business deal. His group had been bumped up to first class and, after a few glasses of champers, the passengers decided to have a Mexican wave. As you do in first class. Everyone took part except an elderly gentleman. Turned out he was the Italian ambassador...and needed his chianti refilled!

BUSINESS QUARTER | WINTER 14

>> A meeting of minds with Marco Some dear readers consider me a mere slip of a lad. But I can recall the celebrity chef Marco Pierre White when he was the emerging enfant terrible of the kitchen. The esteemed restaurant critic Fay Maschler was reviewing his ‘sarf’ London eaterie, and I was the lowly subeditor in the Evening Standard features department, marvelling at Fay’s prose and Marco’s brose.

Fast forward a number of light years and Marco and I are sitting in the Indigo Hotel in Glasgow.

We are talking about how top chefs and gossip columnists are often cut from the same block: we work under daily pressure, our product is perishable and if the customers don’t like what they get they vote with their wallets. Up to a point, I agree with Marco’s views, although my culinary skills don’t go much further than Hellmann’s mayonnaise, Heinz Tomato Ketchup and Lea & Perrins Worcestershire sauce with a hint of lemon to make the perfect Marie Rose sauce for my popular prawn cocktails. Indeed not much more than Marco in his latest cooking epistle for amateurs.

But the Indigo’s champagne dinner was most acceptable with the cauliflower veloute, shredded beef and shallots a foamy and mouth-watering delight, followed by poached salmon, then Scotch fillet with spinach puree, truffle pomme dauphine, and braised oxtail. This was pure Master Chef eating. Not a Knorr stock pot in sight. Marco and I talked about his admiration for the Daily Mail – ‘Paul Dacre is a genius’, – and his anger at the phone tapping scandal which has tarnished all journos with the same brush. Marco doesn’t like journos, doesn’t do interviews, and rejected a £15k interview fee from the Mail. But he was happy chatting, he loves Scotland, indeed he has family connections north of the Border, and the chairman of his company, Nick Taplin, confirmed he was looking for sites in a central Edinburgh Hotel. I suggested two: one at the Roxburghe Hotel on Charlotte Square, and the other at the Radisson Blu on the High Street. If Marco ever decides to open there, I’d like JJL or whoever does the deal to invite me to the official opening. I’d love some more of that cauliflower veloute.

>> TAKING A LITTLE TIME TO SPEND A LOT Seems on average it takes just 38 minutes to make a decision to buy a home. The survey found that those spending over £500,000 manage to take two minutes longer on average – still less than the first half of a football match. Maybe we’ll take a bit longer once the new Land and Buildings Transaction Tax hits Scotland in April.

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In association with

TUE 31ST MARCH 2015 - GL ASGOW HILTON HOTEL The BQ Scottish Export Awards 2015 in association with Scottish Enterprise are open to receive nominations from exporting companies across Scotland.

THE 2015 CATEGORIES ARE:

FOR FURTHER INFORMATION CONTACT: Nominations: Hilary Dunne, BQ Scotland Event Manager e: Hilary.Dunne@be-group.co.uk t: 0191 426 6387

• E-COMMERCE EXPORTER OF THE YEAR • MOST ENTREPRENEURIAL EXPORTER OF THE YEAR • EMERGING START-UP EXPORTER OF THE YEAR • SME EXPORTER OF THE YEAR

Ticket & Table Sales: Amanda Armstrong, BQ Scotland Event Manager e: Amanda.Armstrong@be-group.co.uk t: 0191 426 6368

• LARGE EXPORTER OF THE YEAR • SCOTTISH EXPORT TEAM OF THE YEAR Through nomination you will also be invited to join us as our guest at the BQ Scottish Export Awards Dinner 2015. We look forward to welcoming another vibrant pool of guests to the dinner which will continue to showcase exporting success stories across Scotland.

Sponsorship: Bryan Hoare, Director BQ Magazine e: bryan@room501.co.uk t: 0191 4266300

ENTER YOUR NOMINATIONS NOW AT www.bqlive.co.uk/exportawards Closing date for initial submissions Friday 23rd January 2015.

bqawards_export

EVENTS

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BQ’s business events diary gives you lots of time to forward plan. If you wish to add your event to the list send it to editor@bq-scotland.co.uk and please put ‘BQ events page’ in the subject heading

JANUARY 8 Annual Sue Bruce Breakfast. CEO for City of Edinburgh Council makes annual address to Edinburgh Chamber of Commerce, Balmoral Hotel, Edinburgh.

8.30-10am. www.edinburghchamber.co.uk 20 The Economics of Reputation in the Boardroom, RBS Gogarburn, Edinburgh.

7.30-10am. Panel including Lesley Clark, Tony Langham of PRCA, David Watt of IoD Scotland and Nora Senior. www.iod.com 22: SMAS breakfast on lean manufacturing. Hilton Strathclyde, Bellshill, ML4 3JQ. 8.30-11.30am. www.scottish-enterprise.com 22: Inspiring Women in Business Lunch. First of a series of lunches at Waldorf Astoria Edinburgh, The Caledonian, Edinburgh, EH1 2AB. 12.30am-2.30pm. www.edinburghchamber.co.uk 22: The Reaction Chamber: Speed Networking Lunch with Glasgow Chamber of Commerce. Hard Rock Café, Glasgow, 179 Buchanan Street, G1 2JZ. 12noon. www.glasgowchamberofcommerce.com 27: Federation of Small Businesses, Fife Branch Annual Dinner, 7-11pm, Fife College, St Brycedale Campus, Kirkcaldy, KY1 1EX. 27/28: Scottish Renewables Offshore Wind & Supply Chain Conference, Exhibition and Dinner, AECC. www.scottishrenewables.com 28: After Hours Networking at the Metropolitan, with Majestic Wines and Glasgow Chamber of Commerce. 6-8pm. 60 Candleriggs, Glasgow, G1 1LE. www.glasgowchamberofcommerce.com 29: Understanding the Oil and Gas Industry. Half-day course from Aberdeen & Grampian Chamber of Commerce, The Hub, Aberdeen Energy park, AB23 8GX. 9.30-12.30pm. This is one of a number of courses run by the chamber. www.agcc.co.uk 29: Burns Lunch, with Renfrewshire Chamber of Commerce, Ingliston Country Club, 12-2.30pm. An enjoyable event for Burns aficionados and first-timers. www.renfrewshirechamber.com

FEBRUARY 4: 60 Really Useful Minutes: Entrepreneurship with Stephen Leckie, Scottish Chamber of Commerce Entrepreneur of the Year. 10-11am, Edinburgh Chamber of Commerce, 40 George Street, Edinburgh, EH2 2LE.

18: Lunch and Learn: Glasgow-based video entrepreneurs 29studios tell delegates how to use videos to find customers and drive business, Corinthian Club, 191 Ingram Street, Glasgow G1 1DA. 12 noon. www.glasgowchamberofcommerce.com

MARCH 3: Ecobuild 2015: ExCel London, Royal Victoria Dock. London. 20 places for Scottish companies in the Scottish Pavilion at the largest sustainable design and construction exhibition. www.scottish-enterprise.com 4: Management Today Live: Balmoral Hotel, Edinburgh. 9-5pm. One-day conference on transforming business with Peter Lederer, chairman of Gleneagles, Jamie Coleman, managing director of codebase, Gregor Lawson, of MorphCostumes, and Andrew Laing, of Aberdeen Asset Management. www.edinburghchamber.co.uk 4: 60 Really Useful Minutes: Leadership with Bryan Leslie, official Edinburgh Chamber trainer. 40 George St, Edinburgh, EH2 2LE, 10-11am. www.edinburghchamber.co.uk 6: United Nations International Women’s Day 7: 2015 Women Ahead Business Awards at Apex City Quay Hotel & Spa, Dundee, DD1 3JP. 7pm drinks. 7.30-1am dinner and awards. www.dundeeandanguschamber.co.uk 12: Tick Talk Networking at Seamill Hydro, 5.30pm, with Ayrshire Chamber of Commerce. www.ayrshire-chamber.org 19: Understanding the Oil and Gas Industry. Half-day course from Aberdeen & Grampian Chamber of Commerce, The Hub, Aberdeen Energy park, AB23 8GX. 9.30-12.30pm.

24: Edinburgh Connections with Gordon Dewar, chief executive of Edinburgh Airport. Balmoral Hotel, EH2 2EQ, 8.30-10am. www.edinburghchamber.co.uk 24/25: Scottish Renewables Conference, Exhibition and Dinner. Exhibition at EICC. Morrison Street, EH3 8EE. Dinner in Mansfield Traquair where presentation made of the Saltire Prize Medal. www.scottishrenewables.com 25: The Reaction Chamber: Speed networking lunch. 29, 29 Royal Exchange Square, Glasgow G1 3AJ, 12-2:30pm. www.glasgowchamberofcommerce.com

4: Textile Trend Presentation: IET Glasgow, Laphroaig Lecture Theatre, 14 St Enoch Square, Glasgow G1 4DB. 1.30-4pm. www.scottish-enterprise.com

26: Women’s Networking Lunch with Glasgow Chamber: Chaophraya, Thai restaurant, The Townhouse, Nelson Mandela Place, Glasgow G1 2LL. 12pm. www.glasgowchamberofcommerce.com

5: New Members Breakfast for Inverness Chamber of Commerce.

Metropolitan House, High Street, Inverness, IV1 1HT. 7.45am. info@inverness-chamber.co.uk 01463 718 131

27: Ayrshire Chamber of Commerce Annual Dinner and Business Excellence Awards, Kaye Adams hosts evening at Ayr Racecourse. 6.30-11.30.

Contact: Yvonne Munro. www.ayrshire-chamber.org

8: Gulfood. Scottish Enterprise/SDI are talking Scottish-based firms to this trade show at Dubai World Trade Centre, UAE. www.gulfood.com

31: 2nd Scottish Export Awards, at the Hilton Hotel, Glasgow, hosted by Mark Easton, BBC Home Editor. Seven categories including BQ Scottish Exporter of the Year. www.bqlive.co.uk

11: Influencers’ Breakfast: First of series with Edinburgh Chamber. Royal Yacht Britannia Ocean Dr, Edinburgh, EH6 6JJ. 8.30-10.30am. www.edinburghchamber.co.uk 12: Glasgow Chamber of Commerce’s CROWD breakfast series returns with four business stories of innovation, challenge and success from among the membership. 8-10am. Venue: tbc. www.glasgowchamberofcommerce.com 18: Raising Finance: how to secure business funding. Aberdeen Treetops Hotel, 8.45-1pm. IoD Aberdeen. www.iod.com 18: BQ Scotland Emerging Entrepreneur Dinner 2015, Glasgow Hilton Hotel, hosted by BBC Home Editor Mark Easton. Scotland’s winners will go forward to represent the nation at the MADE: The Entrepreneur Festival 2015. Nominations by 9 January 2015. www.bqlive.co.uk

BUSINESS QUARTER | WINTER 14

The diary is updated daily online at www.bqlive.co.uk Please check with contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above email address of any changes or cancellations as soon as they are known.

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For businesses of all sizes in all sectors, Microsoft Office 365 is the logical starting point. More importantly, it can open the door to collaboration and communication tools that could

your business as we are with the telecoms, connectivity and infrastructure – both physical and virtual – that underpin them.

That’s why thousands of business trust Technology Services Group to provide the guidance and support needed to maximise the value of their investment in ICT.

transform the way your teams work.

To find out more visit www.tsg.com/trusted or call 0845 11 11 888 to speak to one of our experts.