CH.WN.Sco.C6.Final.q 3/27/02 9:31 AM Page 61
Economy economy to the new service economy was under way. Tourism, health, education, insurance, banking, finance, and research and development have now largely replaced heavy industry and manufacturing. During the mid-20th century, Scotland also mirrored another trend found in the developed countries of Europe: a sharp decrease in the number of farm workers. Especially since the 1940s, employment in agriculture has declined significantly. Currently only about 2.5 percent of Scotland’s labor force is engaged in farming. We can generalize about two of the most vital forces changing Scotland’s economic landscape over the past half century. The first of these forces is also changing regional economies in many other countries of the world—direct foreign investment, or DFI for short. The impact of the second force is restricted to Scotland, the UK, and other North Sea countries: the discovery of oil in the 1970s. DFI is the term for the flow of international investment capital from one country to another. In Scotland, investment by foreign-owned companies has steadily gained in importance since the 1940s. North America was then the source of most investment, but lately European and Japanese corporations have been investing in Scottish facilities and research centers. In 1945 only six U.S.-owned manufacturing companies were located in Scotland. By the mid-1980s that number had grown to 181. Currently an additional 138 foreign-owned corporations are producing products and services from a Scottish territorial base. An educated workforce, progressive government, environmental and cultural amenities, and a location that makes Scotland a natural entrepoˆt to the vast market of the European Union all contribute to Scotland’s success in attracting DFI. Today foreign-owned firms directly employ 80,000 people. Almost a third of all manufacturing jobs are with transnational corporations. Near the top of the list of Scottish growth industries is the field of electronic manufactures. With rapid growth
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