Nick Shields, Director of the Scottish Manufacturing Advisory Service (SMAS), talks to James Pozzi about the future of manufacturing in Scotland.
TM: You became director of SMAS in 2011 and the organisation held its conference this summer. What trends have you seen emerging in your three and a half year tenure as
Nick Shields: There’s certainly been a recognition from all quarters about how important a vibrant manufacturing sector is to the economy. We’ve realised through the experience of the recession and looking at Germany emerging from recession earlier than everyone else, you can then see how a strong manufacturing sector can underpin a robust economy. From an industry perspective, Scotland’s oil & gas sector goes from strength to strength, along with very strong sectors including aerospace, chemicals, life sciences and food & drink to name but a few. There’s a focus on premium and provenance and we’re seeing businesses invest in these products and markets. Globally there will be a billion new consumers in the next 10 years all from the developing economies, looking for high value premium products. We have seen heavy investment in industries such as Scotland’s famed whisky sector, textiles and life sciences which sells to these consumers.
TM: What are some of the growth areas of Scottish manufacturing SMAS has identified with real potential for job creation and other economic benefits?
NS: I believe the energy market holds great potential for Scotland. In the traditional oil & gas world, Scotland has expertise it can export around the world in accessing minerals in difficult subsea environments especially as these become harder to reach. Many of the world’s biggest exploration companies have large R&D sites in Scotland and undertake a good deal of their primary manufacturing here. There’s also renewables from a marine and wind perspective. Leveraging from our universities and installed base, there are great opportunities in the life sciences and medical technologies sectors.
TM: SMAS has put greater emphasis on focusing its proposition towards leadership, people and culture. How will it address this area?
NS: We can go into businesses and deliver a transactional project, where we tidy up their environment and reduce inventories. Unless you address the fundamental issues of underlying culture and how the business operates, then you’ll not sustain these improvements. Part of the solution is to engage with the leaders in the business to raise their ambition. To this end we hosted an influencer dinner with Peak Scientific a high growth manufacturing business near Glasgow, with the objective of letting fellow business leaders hear how this company’s leadership and culture has helped it grow over the past 15 years from a start-up to one with £40m turnover and the ambition is to be a £250m company in the next 10 years. This will be achieved by establishing a global proposition, much like the Germanic approach. There have been instances of Scottish businesses being acquired by larger foreign firms as they don’t feel they have the global reach to grow, but Peak Scientific has demonstrated that by showing the energy and ambition to get out into these markets, you can grow a successful, global from the UK.
TM: What is your take on the skills shortage in Scotland?
NS: The agency in Scotland with responsibility for this area, Skills Development Scotland, published a skills investment plan for the engineering sector in August. We have some great engineering universities in Scotland but around only 40% of those graduating from here end up in engineering jobs in Scotland. While there are a lot of foreign students who may return home, we see people drift into other sectors. There is an acceptance that we don’t see the translation from the university sector into the company base. As an industry, we need to point out that careers in engineering and manufacturing are often in progressive, modern working environments and not in the outdated perception of dirty factories. Encouragingly, the young people we engage with are very switched onto things like the environment and protecting resources. It’s all about making these young people realise that it will be the engineers, scientists and manufacturers that will solve our problems regarding sustainability, clean energy and resources in the future.
TM: What is your long-term vision for SMAS as an organisation?
NS: The policies of the European, UK and Scottish governments are explicitly focused on increasing manufacturing’s share of the economy from its current 12% to 20%. I see the job of SMAS is to help achieve this ambition. Whilst we have our fair share of world class businesses in Scotland, perhaps it’s in the middle ground where we are not as competitive as our European neighbours. SMAS is focused on enabling as many manufacturers as possible on their business excellence journey. We want to make an integrated offering for our manufacturing clients to help realise the significant opportunities available, so in Scotland we see even more profitable and internationally competitive businesses that replicate the success of businesses such as Peak Scientific.