Interview March 2012

Crawford Gillies

Chairman of Scottish Enterprise

• Scots are pioneering clean, green energy to combat climate change
• Financial services firms have strong partnerships in Tokyo
• Japan’s quality whisky no threat to Scotch’s global market
• Devolution has helped make an FDI-and export-friendly market

How would you characterise the present UK–Japanese relationship?

Appointed chairman of Scottish Enterprise/Scottish Development International (SDI) in 2009, Crawford Gillies is also chairman of Control Risks Group Holdings Ltd and a non-executive director of Standard Life plc. Gillies previously worked at the US-headquartered global consulting firm Bain & Company, where he advised firms from a range of sectors on matters of corporate strategy, acquisitions, performance improvement and organisation.

SDI aims to help Scotland’s economy grow by encouraging inward investment and helping Scotland-based firms develop international trade, and can assist the increasing number of Japanese firms looking to expand into Europe to benefit from the business and research opportunities available in Scotland. Moreover, SDI has a wide range of investor support services, including training, grants and funding. Some 1,500 leading global firms—including online retailer Amazon; the telecommunications, internet and financial services provider 02; the IT-related Dell, Inc.; and the research-based pharmaceutical giant Pfizer Inc.—have invested in Scotland.

ACUMEN: Please tell us why you visited Japan in November 2011, whom you met and what the trip achieved.

This was my first visit to Japan as chairman of Scottish Enterprise/SDI, and it afforded me a great opportunity to learn more about this important investment and trading partner. Scotland has proved to be a good investment location for Japanese firms and today some 70 have a presence in Scotland, providing employment for about 5,000 people.

I had a number of very productive conversations with both existing and potential Japanese investors and Scottish firms active in Japan to fully understand their needs and future direction. During the meetings, we discussed how SDI could provide the best possible support to help them achieve their growth objectives and create economic impact in Scotland.

What are the barriers—tariff and non-tariff—to imports of Scottish goods and services in Japan?

Robin Rigg Wind Farm in the Solway Firth

A key part of the SDI’s role in Scotland is to help Scottish firms understand the significant opportunities to do business with Japan and to help counter stereotypes that hold trade with Japan is complex.

Our offices in Scotland and Japan have been assisting an increasing number of Scottish firms to explore and expand in the Japanese market over the past few years. This is a trend we want to pursue.

What advocacy issues have you taken up—or would like to take up—with the Japanese government?

I believe Scotland and Japan share the common aim of developing renewable energy resources. Scotland has a very strong vision and has aggressively innovated in this area. Japan has the technology and manufacturing capability so, by working together, we can realise our common aim. Since the crisis at the tsunami-crippled Fukushima nuclear plant, I see there has been a lot of debate on the use of energy sources other than nuclear power. The Scottish and Japanese governments can provide an environment to accelerate important developments in the field of renewable energy.

Tell us about renewable energy in Scotland and any Japanese involvement in the industry.

Scotland is a leader in the development of clean, green energy and boasts a world-class research and development base that is pioneering technologies expected to have global impact on combating climate change.

In the area of renewable energy, we have strong ties with Japan. An example is the announcement by Mitsubishi Power Systems Europe Ltd that it will invest up to £100mn in an engineering facility, to carry out research and development into offshore wind-turbine technology, set up a Centre for Advanced Technology in Edinburgh, and acquire Artemis Intelligent Power.

I believe Mitsubishi’s decision to invest in Scotland demonstrates how Scotland’s “renewable” revolution is gathering pace, and that we have the quality infrastructure and skilled workforce to deliver success in this rapidly growing industry.

What are the key markets here for Scottish exporters and which are under-exploited by Scottish firms?

Japan’s established base of multinational and global companies is of particular interest to Scottish firms who are looking for global partners in the areas of financial services, life sciences, biotechnology, renewable energy, electronics, textiles, food and drink.

Financial services is a well-established industry in Scotland, and we have been promoting it in Japan for some time. Today, almost all key Scottish asset managers have created partnerships with Japanese financial institutions. Examples are Baillie Gifford & Co, Standard Life plc, Aberdeen Asset Management plc and Scottish Widows.

The electronics market, including the gaming sector, offers many opportunities for Scottish firms with niche technologies or products to work together with Japanese companies.

The Japanese food and drink sector is another one that we are encouraging Scottish firms to explore. Japanese consumers are discerning and open to buying branded products that are natural, healthy and produced in a sustainable way.

In the area of life sciences, since the Japanese market is open to new ideas to drive business, in January we hosted a Life Sciences Mission with a focus on drug discovery.

Is the growing quality of Japanese whisky seen as a threat to imports of Scotch by Japan and other markets?

Not at all. Over the past 10 years or so, the increased recognition—particularly overseas—of the quality of Japanese whisky has created a niche category, distinct from scotch or bourbon. It is fast becoming a must-have category for any self-respecting liquor shop or bar. In the Japanese market, imported whiskies always have made up only a small share of total sales, but the renewed interest in whisky overall, spurred by the success of the Highball, will ultimately benefit both domestic and overseas products.

The relationship between Scottish and Japanese distillers is a long and close one, dating back to a study visit to Scotland by Taketsuru Masataka nearly 100 years ago.

Rather than being seen as a threat, the recent success of Japanese whisky around the world can be seen as a vindication of the quality of that Scottish spirit from which Japanese whisky was born.

Over the years, Scotland has developed considerable autonomy through the process of devolution. Has this been a good thing for your organisation?

The UK approach to devolution has enabled the Scottish government and Scottish Enterprise to develop a Scottish approach to creating an environment that is favourable to inward investment, and that supports the export capability of Scottish firms.

What can Scottish firms do to be more successful in Japan?

Scottish firms can take advantage of the services our organisation provides, to help them prepare for doing business internationally and exporting. Also, our overseas offices provide insightful market research as well as in-market support to help Scottish firms do business in Japan.

For example, the SDI’s Japan office in Tokyo has experts to assist newcomers to the Japanese market find the right partners and build their business in Japan. SDI Japan works with partners such as UK Trade & Investment, the British Chamber of Commerce in Japan, and the Japan External Trade Organization.

SDI Japan:
Tell: 03-5501-3480