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Europe Day
How many people are aware that today, Friday
21st March, is Europe Day? It is a day to celebrate
the diversity of cultures that has become the
European Union. Thirty years ago the UK joined
France, Germany, Italy, Belgium, Luxembourg and
the Netherlands to become part of the then European
Economic Community. The EEC was created out of
a desire to prevent a repeat of the devastation
and loss of life of the Second World War. When
founded in the 1950s, the strategy was to work
together in production of steel and coal - the
raw materials required to fight wars. Given that
we have not experienced a further world war, one
could conclude that the strategy has been successful.
(at least in that respect!)
However the European Union of the 21st century
has moved forward considerably since it's establishment
as an exclusive club of six. Europe’s coal
and steel industries have declined. New opportunities
have emerged, and new industries have replaced
these traditional ones. The European financial
services sector, for example, also serves as a
worthy competitor to the USA.
Scotland has a particularly strong role in this
important sector. It is a vital growth industry
which employs some 91,000 in Scotland. The wealth
of knowledge possessed by Scotland’s financial
services sector is well recognised across Europe,
as are the investments it is able to generate
and manage. But do we recognise fully the value
of the European Single Market for financial services
and what it has to offer? Do we take full advantage
of the opportunities?
Of the top 20 companies located in Scotland,
ten are in the financial sector. Edinburgh has
become an epicentre for banking and life assurance,
with fierce defence of Scottish headquarters against
the increasing pressure of mergers within the
sector. Over £300 billion of investments
are managed by fund managers based in Scotland.
And almost 5% of European pensions and long-term
life assurance funds are managed here. That figure
could increase significantly as the pension market
opens up further under new European legislation.
Scotland is in a win-win situation. Scottish
companies are now able to trade across Europe
to access lucrative markets. At the same time
as UK investors face anxiety and uncertainty with
declining investment values and reduced pension
pay-outs, the European dimension offers a wide
choice of opportunities to market financial services
and products. Yet despite these opportunities,
how many of our hugely powerful companies actively
seek to strengthen their position by tapping into
the potential available in Europe?
The Scots are a competitive nation, but it is
important that that drive is channelled into positive
action. For Scotland, home of so many companies
with the imagination, innovation and drive to
make them world class, these are pivotal times.
For the determined entrepreneur there are enormous
opportunities to exploit. So perhaps the time
is right for our policy makers to reflect whether
we are creating and encouraging the right environment
for enterprise and growth.
Do we have a climate here in Scotland that encourages
innovation and the taking of calculated risks
so as to develop and modernise our business structures?
Scotland has a proud legacy for innovation and
development. But are we doing enough to back our
businessmen with the infrastructure and conditions
which can help them succeed?
A good example is our considerable record of
achievement in research and development. Leading
edge scientific research in the fields of the
human genome, genetically modified crops and biotechnology
for health are areas where Scotland has pushed
the boundaries of knowledge. Such Scottish scientific
research can be of enormous benefit world-wide
and provide rich opportunities for commercial
exploitation by Scottish enterprises, if only
they could be offered the right conditions in
which to develop to their maximum potential. Yet
much of this crucial research work is thwarted
at the first hurdle by a lack of appreciation
of its potential or a lack of support for its
development.
The European Union has for a long time supported
scientific research. The substantial allocation
of €17.5 billion is presently available to
support collaborative R&D projects across
Europe. Biotechnology is the top priority. Several
Scottish institutions are already in the process
of applying for grants. That opportunity is there
for the taking. But we must do more to ensure
that our Scottish scientists’ determination
to innovate is nurtured, encouraged and developed
within an environment which is science-friendly
and commercially responsive.
Being part of Europe has already created huge
opportunities for the Scottish economy. The enlargement
of Europe next year, when 10 new member states
are expected to join our club, offers an enormous
further opportunity for our indigenous Scottish
companies. We can be sure that, if the last 30
years are anything to go by, the next 30 will
see the opening up of further markets and new
opportunities, there for the taking for those
who are dynamic enough to take the chances on
offer. With the right will, commitment and support,
Scottish innovation can seize the moment, and
in so doing, not only benefit Scotland, but also
reinforce the collective strength of the European
Union.
John Purvis is Vice Chair of the European Committee
for Economic and Monetary Affairs
and a member of the European Committee for Industry,
External Trade,
Research and Energy.
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