Strategic evaluation of SDI international activities: final report

The Scottish Government (SG), Scottish Enterprise (SE) and Highlands and Islands Enterprise (HIE) deliver international trade and investment support principally through Scottish Development International (SDI): Scotland’s lead body for such support. The evaluation aimed to assess: the rationale for supporting companies to trade internationally and to attract investment to Scotland; performance against SDI targets; the effectiveness of the support provided to businesses; the types of support delivering greatest benefits; and the economic impact of the support. The evaluation covered the support provided for international trade between 2012/13 and 2015/16 and for inward investment from 2011/12 to 2015/16. In addition to the main report additional analysis was subsequently undertaken by SE to look in greater detail at the impact of support on job creation. This analysis is published separately to accompany this report.

The methodology consisted of: desk-based research; telephone and face-to-face surveys with a sample of companies supported to trade internationally; a telephone and face-to-face survey of inward investors; consultations with stakeholders and other partner organisations; and a workshop with SE and HIE Account Managers.

The evaluation found SDI support to have been very effective in assisting international trade and inward investment, particularly among existing exporters and investors. This was despite a downturn in the oil and gas sector, the long-term impacts of the global recession, and the more recent political and economic uncertainty associated with Brexit. A large number of businesses were assisted to start or grow international trade, and the inward investment survey found that a combination of financial incentives and support through SDI had helped attract additional business to Scotland, increasing output and employment. It was estimated that the trade support generated £630m to £985m of new international sales and between £465m and £730m of additional GVA. With associated costs of support of £114m, the ratio of GVA to cost is between 1:4 and 1:6. For inward investment support, the GVA impact was estimated to be £1,600m increasing to £2,700m if attributable jobs were assumed to last for a further two years. With total inward investment costs of £181m, this gives a ratio of GVA to costs of between 1:9 and 1:15. Overall satisfaction levels were high, especially among inward investors and companies receiving intensive trade support, where more than 90% of respondents responded positively (Very Satisfied or Satisfied). Almost half (48%) of inward investors said the support had played a part in their decision to invest, around 30% stated investment would have happened later (commonly more than two years), and around a quarter stated investment would have been on a smaller scale. Only 7% stated that the investment would have happened in the same form regardless of support. Feedback from businesses and stakeholders also indicated that there is a good understanding of the key areas of market failure and SDI are providing a range of support that addresses the differing needs of business along the internationalisation spectrum.

Recommendations were made for further improvements to existing good practice. These included: further development and refinement of the international sector operating plans; promotion of trade opportunities to non-exporting Account Managed companies; increased domestic marketing of international trade support, and of the opportunities in overseas markets; continued improvement of working relationships with the Department for International Trade (DIT); research to understand the selling activities of overseas teams; recruitment of more sector specialists for the SDI’s overseas offices; greater flexibility in provision of trade support; ensuring ongoing support to first-time inward investors who do not qualify to be Account Managed; maximising the use of digital technology to deliver trade support; improving monitoring systems; and refining targets.