Business Insight

Business
Insight
Thursday January 9 2014
Well connected
Brendan Dick explains BT’s most
complex digital project to date
Collaboration on campus
Four-page special report features Inverness
Campus, a landmark development in the Highlands
in association with

2
Business Insight
Welcome
Reaching
a new
frontier
The Highlands are a place
of opportunity, the best
place in the world to live
and work, says Drew
Hendry, leader of Highland
Council. In this issue we
look at the investment and
vision creating this opportunity
across the region.
We start our journey in
Inverness and at Inverness
Campus, one of the largest
projects that Highlands and
Islands Enterprise (HIE)
has embarked upon and
one that is being hailed as
a project of national importance.
Brendan Dick, head of BT
Scotland, discusses next
generation broadband
(NGB), its complexities
and how it will benefit the
people and businesses of
the Highlands and Islands.
We also go north to
Caithness and Sutherland
and discover why the
run-down of nuclear
activity is creating major
opportunities for the area.
COVER IMAGE: JAMES GLOSSOP FOR THE TIMES
Inside ...
‘Best place in the world’
How one of Europe’s most
diverse regions is attracting
business at record levels Page 4
Inverness Campus
A four-page special report
highlighting the best of
a confident, forwardlooking
initiative Page 5
Cover story
Brendan Dick of BT Scotland
explains the imperative for
digital connectivity Page 9
Good taste
The thriving food and
drink industry is serving
the nation well Page 11
Thursday January 9 2014 | the times
Constantly scaling
The Highlands
and Islands are
experiencing a
business renaissance,
in inward investment
and a new optimism
There was little snow
for skiing in early
December at Cairn
Gorm Mountain
near Aviemore, but
the funicular railway
beetled steadfastly up
and down the slope.
This scene at the
gateway to the Highlands
somehow symbolised the way it
used to be for the region’s economy:
nothing much doing but soldiering on
and living in hope of jam (or snow) tomorrow.
One indicator more than most
once epitomised economic fragility:
chronic depopulation. The same indicator
now points to a region more vibrant
and confident than many would once
have imagined possible.
For decades the long-term population
trend has been positive. It is now around
230,000 and is forecast to reach 256,000
in 2035, without taking into account
what economic players such as Highland
Council, development agency Highlands
and Islands Enterprise (HIE), the Scottish
government and others may do to
spur the economy along.
As Highland Council leader Drew
Hendry puts it “People are attracted to
the Highlands like no other time in the
past.” HIE’s chairman Professor Lorne
Crerar says: “HIE is creating centres of
excellence that pull in employers attracted
by the unique benefits that we have in
the Highlands and Islands.”
Investors are responding to opportunities
in food and drink, tourism, life sciences
and energy, particularly renewables,
and especially offshore wind, tidal
and wave generation.
The Highlands now have one of the
highest rates of population growth within
Scotland, with two hotspots in particular
driving that: Badenoch & Strathspey
and Inverness. Highland Council hopes
to have seen at least another 5,000 new
homes built in the region between 2012
and 2017 to meet likely demand.
Badenoch & Strathspey boasts the
1,400 square miles of Cairngorms National
Park, the largest in the United
Kingdom, covering almost 6 per cent of
Scotland and offering spectacular landscapes
and diverse and unique flora and
fauna.
It is a magnet for outdoor activities,
including skiing, walking, fishing, shooting
and deer stalking, attracting some 1.4
million visitors a year. Its distinctive communities
add to the appeal: Aviemore,
Ballater, Braemar, Grantown-on-Spey,
Kingussie, Newtonmore and Tomintoul.
The Malt Whisky Trail through Speyside
draws visitors to seven distilleries
and contributes to off-peak tourism
through special events such as the Spirit
of Speyside Whisky Festival next scheduled
for May 2014.
You can find areas
looking not much
different from hundreds
of years ago and a real
connection with nature
Aviemore, the resort and village near
the Cairngorm Mountain ski areas, has
seen recent significant investment in refurbished
and new hotel space by groups
such as Macdonald Hotels & Resorts,
which has also opened a clubhouse at its
Spey Valley Championship Golf Course..
“There is good awareness of Badenoch
& Strathspey’s appeal, but we have not
even begun to tap the full potential of
what this area, Sutherland and the rest of
the Highlands have to offer,” says Drew
Hendry. “The great beauty of our diversity
is that you can find areas looking not
much different from hundreds of years
ago and a real connection with nature,
but can also get to the top-class tourism
facilities quickly.”
On the approach to Inverness, Loch
Ness remains a ‘must see’ for foreign and
domestic visitors alike, thanks as much to
its scenic beauty and leisure activities as
the (unquantifiable) possibility its fabled
monster might appear.
Fast-growing Inverness is a magnet
and a hub for the rest of the Highlands.
The development of Inverness Campus,
the education, business, health and
leisure site is a “huge opportunity” for the
city and the Highlands, says Hendry. The
University of the Highlands and Islands
(UHI) campus element of the development
will be a “game changer” for retaining
and attracting young people, he adds.
The rise of life sciences research and
industry is marked along the A96 road
corridor from Inverness to Forres, Elgin
and Nairn, locations emerging as a focus
for world-class remote and digital healthcare
R&D and businesses.
LifeScan Scotland, owned by US
healthcare giant Johnson & Johnson, employs
more than 1,000 people in Inverness
in its manufacturing and research
facilities that focus on blood glucose test
devices. Daktari Diagnostics, an American
maker of diagnostic medical products
for the developing world, plans to set up
in or near Inverness, with Forres possibly
in the frame. IT outsourcing giant
GARY WILLIAMSON
The UCI Mountain
Bike World Cup will be
staged in Fort William
in June this year

the times | Thursday January 9 2014 3
Business Insight
new heights
Capgemini is to have 500 employees in
Inverness.
While the Highlands will benefit from
visitor interest during the 2014 Commonwealth
Games in Glasgow and the 2014 Ryder
Cup at Gleneagles, Perthshire, Inverness
is pursuing its own sports ambitions
with plans for a new hub that will include
a golf course, football, rugby, shinty, swimming
pool, and walking and mountain biking
routes. A marina may also be included.
The complete dualling of two key roads
from Inverness – the A9 to Perth by 2025
and the A96 to Aberdeen by 2030 – will
speed access to other main cities.
State-owned Inverness Airport is the
gateway to smaller airports and strips
throughout the Highlands and to main
UK and continental hubs
“Business growth in the Highlands is
making routes more sustainable, which is
why we have investment from companies
such as easyJet,” says Stuart Black, director
of planning and development at Highland
Council. “The opportunity is there and
will increase as other things grow or come
on stream, such as energy-related developments
at Nigg, Ardersier and Kishorn.”
Alongside growth and the rise of
knowledge-based employment, there are
significant challenges in the few depopulating
areas, such as northwest Sutherland,
Hendry acknowledges. “Most of the
Highlands are able to participate in the
growth we are getting across the region
and we intend to make sure no community
is left out as part of our journey,” he
says.
Highland Council’s role in facilitating
resumption of energy fabrication
work by Global Energy Group (GEG) at
Nigg, Easter Ross, and GEG’s setting up
with the public sector of the Nigg Skills
Academy to train thousands rested on
the council’s desire not to see a repeat of
the past when oil and gas fabrication jobs
came and went in great numbers.
Says Hendry: “GEG are very forwardlooking.
I think this model will be replicated
on other sites in the Highlands over
the coming years.”
Similarly, Caithness is reinventing itself
to counter decommissioning of the
Stuart Black
points to
sustainability
of air routes
Dounreay nuclear reactor. Scrabster
harbour has been upgraded at a cost of
£20 million for anticipated work from
offshore renewables and oil and gas developments.
Investment has gone into the harbour
at Wick which, with its airport, rail station
and road links, is strategically placed
to service offshore energy developments.
Engineering and technical skills from
Dounreay will be available progressively
over the next five years to cross over into
industries such as tidal and wave energy.
The Caithness & North Sutherland Regeneration
Partnership, which includes
Highland Council and HIE among its
partners, hailed the granting of permission
to MeyGen Ltd to develop Europe’s
largest tidal energy project in the Pentland
Firth between Caithness and Orkney.
Law firm Harper Macleod opened
a new office in Thurso last year to get
closer to potential wave and tidal power
developments in the Pentland Firth.
Since setting up the annual Scottish
Highland Renewable Energy Conference
in Inverness five years ago (the next one
is in April 2014), Harper Macleod’s energy
team has been involved in projects
responsible for more than a third of the
6.4 Gigawatts of onshore wind generating
capacity in Scotland to date and now
sees more offshore wind, wave and tidal
power technology looming.
“The spin-off effect from the ports and
harbours activity cannot be understated,”
says Chris Kerr, lead partner in the firm’s
north of Scotland operation, with Harper
Macleod having been involved in many
port-related deals and significant harbour
developments across the region. “The impact
goes way beyond direct job creation
and the supply chain, to areas such as
housing, leisure and general promotion
of the region to entice people to live and
work in the Highlands.”
Nearby John O’Groats has been transformed
after a multi-million pound refurbishment
and extension of the reopened
John O’Groats House Hotel by self-catering
holiday specialists Natural Retreats.
Lochaber, outdoor capital of the Highlands,
will enjoy global exposure in June
when the UCI Mountain Bike World Cup
is staged at Fort William, the staging post
too for mountaineers tackling Ben Nevis.
The year of Homecoming 2014, when
Scots and their descendants worldwide
are invited to visit the mother country,
will on previous evidence provide more
tourism spend this year. The older generations
of the Highlands diaspora will
find a much more confident place than
they perhaps left. The recent return of
business confidence is seeing Highland
companies refocus on growth, says Chris
Kerr, who works with the region’s many
owner-managed and family-owned businesses.
“We’ve seen a lot of internal corporate
restructuring going on to be in the best
position to grow. These companies are
still around because they move with the
times and evolve, often as new generations
come into them. I am struck by the
number looking at succession planning
and there seems to be more willingness
to identify skills gaps and consider bringing
in non-family members where a need
is identified.”
COMMERCIAL REPORT: HARPER MACLEOD
Law firm signs up to the future
Harper Macleod looked to
the north for continuing
growth when others looked
south . . . and the law firm
has never looked back,
says Rick Wilson
Some eyebrows were raised in
legal circles when, almost ten
years ago, the well-established
Central Belt commercial firm
Harper Macleod upped a few
sticks and branched out north,
while other such big city legal eagles
aimed to fly south. Even in Inverness,
which was earmarked as the main outpost
and beneficiary of the firm’s formidable
expertise, more eyebrows were raised.
“We always try to do things a wee bit
differently,” says Chris Kerr, the partner
who led, and still leads, the northern
operation. But, of course, the answer to
“why?” was not as simple as that. “We
had our ears to the ground, listened to
the messages coming through from our
contacts, and reckoned such a departure
could contribute to what we hoped to
achieve – healthy growth of our business.”
Perhaps one of the most significant
ears to the ground was that of the firm’s
chairman, Professor Lorne Crerar — who
is also the current chairman of Highlands
and Islands Enterprise (HIE).
Nearly a decade on, then, the question,
has to be: did it work?
“Undoubtedly. Inverness and the Highlands
and Islands have been great for the
firm,” says Kerr. “The business community
has been appreciative of our presence and
welcomed our approach. Early on, we
occasionally had to address the idea ‘why
would we need specialist lawyers in this
or that area when a general practitioner
might do?’. But, without exception, any
client coming to us has realised it makes
sense to use a lawyer who understands
the particular discipline in question. And
we’re on their doorstep.
“We have more lawyers recognised as
leaders in their field than any other firm
in the north. We operate from Moray
in the east to Skye in the west, through
Ross-shire into Caithness and beyond to
the Islands.”
The firm is admired for its work in
corporate — notably among the region’s
many family or owner-managed businesses
— and high-end private client concerns,
as well as rural and commercial property,
employment law, banking and finance,
family law and dispute resolution.
“But we have also identified areas of
growth specific to the region, where we
could play an advisory part. Key among
these are renewable energy and the life
sciences.”
For advisory, read proactive. Getting
thoroughly involved in these fields, hav-
Chris Kerr of Harper
Macleod heads up the
firm’s Inverness office
ing spotted that “energy was going to get
bigger by the year”, Harper Macleod runs
the Scottish Highland Renewable Energy
Conference (SHREC) which marks its
fifth anniversary in April and attracts
250 industry figures to Inverness each
year. And the firm recently hosted the
inaugural (to be annual) Life Sciences,
Knowledge & Enterprise conference
(LiKE), addressed by John Swinney, in
recognition of the area’s leading role in
the burgeoning life sciences sector.
“So the decision to expand north has
paid off,” says Kerr. “It has contributed
to our sustained growth as a firm, with
turnover rising year-on-year through the
economic downturn. And we’ve grown
the Inverness office to the point we need
more space, created jobs and played our
part in stimulating the local economy.”
Multiple reasons, then, for celebration
in the coming year, with scores of new
clients on the books and a second northern
office opened in Thurso.
“We’re good at parties,” says Mr Kerr.
“We’re planning a ten-year anniversary
event in Inverness in September and a
first-year celebration in March in Thurso,
where the business community turned up
in droves for our launch party.”
What else is on the horizon? There’s
the Inverness Campus, the 215-acre
business-education development that sits
on Harper Macleod’s Inverness doorstep.
The firm’s Infrastructure & Projects
team advised on the £60m deal to build
the new home of Inverness College
UHI there, and the campus is central to
developing in the region’s life sciences
capability.
Meanwhile, Kerr is clearly interested
in nurturing the entrepreneurial spirit
he has detected in Morayshire, among
other areas, but any other moves might be
put on hold for a few months as Harper
Macleod focuses on the culmination of its
role as Legal Adviser to the Glasgow 2014
Commonwealth Games.

4
Business Insight
Regional support
Welcome to the ‘best place in
the world to live and work’
Thursday January 9 2014 | the times
One of Europe’s most diverse regions, the
Highlands are grabbing every chance to attract
new business and new people at record levels
here are 10,000
employees among
its population of
230,000 people, so
Highland Council has
a key responsibility
for making the region
a better place to live
and work – and faces
one of the biggest
challenges among the United Kingdom’s
local authorities.
“We are one of the most diverse regions
in Europe,” says Drew Hendry, of the
Scottish National Party, who leads a tripartite
political administration, including
Labour and Scottish Liberal Democrats,
making policy between 2012 and 2017.
That diversity ranges from the demands
of fast urban growth in Inverness
to the economic and social fragility of
some of Europe’s most sparsely populated
areas.
“There is certainly complexity, but a big
region offers the opportunity to harness
the diversity of our people and industries,
so the whole is greater than the sum of
the parts,” says Hendry, an entrepreneur
who founded and is still a shareholder in
Highland-based Digital Marketing company
Teclan.
“The Highlands are the new frontier, a
place of opportunity, the best place in the
world to live and work. We are open for
business, welcome enquiries and will do
what we can to accommodate opportunities,
increase their value for our people
and enhance our communities. It is an
exciting place and people are attracted to
it like no other time in the past.”
Hendry describes the council as an
“enabler” for companies and organisations
buying into this story. He says:
“Typically, we help bring people together,
co-ordinate projects and, of course, set
the policy context.”
While individual planning applications
are necessarily judged on their merits and
within statutory policy constraints, Highland
Council is committed to progressing
applications “really quickly” where possible,
Hendry says.
“We are open for business but not at
any cost. We try to provide a clear position
as rapidly as possible on what can be
done in the context of local and Highland-wide
plans already in place. For a
particular type of development, we can
say where in any given area that might
be enabled.
“If it is bringing work in, we will facilitate
it as much as is possible by connecting
investors to the right organisations to
get the best possible outcome within the
planning framework. We try to make this
as cooperative a place to work as we can
and the processes as simple and easy as
possible to access.”
Hendry is a member of the Scottish
National Party (SNP), which of course
wants Scotland to be independent of
the United Kingdom, but at Highland
Council he leads a multi-party political
administration: SNP, Labour and Scottish
Liberal Democrats, covering centre
to centre-left shades of opinion.
There is a common agenda to create
the right planning environment and to
support businesses as an enabler.
Hendry says. “We put together a
129-point written strategy when we came
together. That’s allowed us to focus on the
things that we agree about – the needs
of the economy, jobs, infrastructure and
social needs – a very clear path to follow.
That is a real strength.”
He cites the June 2014 arrival of
Capgemini in Inverness: “It tells you
about our attitude to enterprises that
they want to invest here and also how attractive
the Highlands is to science and
technology-based businesses. We have
the perfect environment and that is being
backed up in bricks and mortar at
Inverness Campus. And, of course, you
can surf in the morning, and go skiing or
play golf or go walking and enjoy nature
in abundance.”
The SNP’s Drew
Hendry, leader of
Highland Council
Similarly, Highland Council has
worked closely with Global Energy on
the re-emergence of Nigg in Easter Ross
as a manufacturing site for energy industries
and the establishment of the Nigg
Skills Academy.
“We made sure the right planning
conditions were in place and were able
to support them by sourcing some regeneration
funding for part of the site,”
says Hendry, who sits on the board of the
Academy.
“We have played a role in spreading
awareness about what the location has
to offer because it has to be a sustainable
future.
“The council has been committed for
10 years to seeing Nigg back in operation
and we are delighted that Global has
achieved something that will be very productive
for the Highlands.”
To meet population growth and the
rise of new industries, Highland Council
hopes to have seen another 5,000 homes
built in the region between 2012 and 2017,
a construction programme that would itself
boost the regional economy.
“We would actually like to overachieve
that target,” says Hendry.
“If we see the new jobs growth that is
predicted in life sciences, oil and gas, and
renewables, then you have to be able to
house the people who are attracted to
them. We are tackling the issue early on.”
Private house builders are responding
well, says Hendry.
“They are beating our predictions for
their contribution towards that target,
but we also have a very demanding council
house building programme and are
working with housing associations to ensure
there is even more affordable housing
across the Highlands.”
Council housing is “vital” to retain
population too, he maintains.
“Many of our people are sustained by
council housing around the Highlands
and we are working hard to go from a position
of having had no builds in previous
years to nearly 1,000 additional council
houses in the five years to 2017.”
Angus MacSween of iomart points
to entrepreneurialism in the region
New enterprise means having our feet on
home ground and our heads in the cloud
For me the Highlands has always been a
good place for business. When I founded
iomart as a telecommunications and internet
company 15 years ago this month, we
chose the company’s name in homage to
the Gaelic word for enterprise, ‘iomairt.’
Stornoway, the town where I grew up, was
the site of our first customer contact centre. We
employed 80 staff, making us one of the largest
private-sector employers in the Western Isles.
The statement we were making was that the
internet was going to provide a platform for anyone
to do business from any location. Many of our
employees had left Lewis for economic reasons but
retained a strong attachment and wanted to come
back and contribute to the economy and community.
The internet made this possible.
The market has changed since those dial-up
days. We now have more access choice with 4G,
satellite, cable and fibre broadband but without
speed of connectivity, commerce in the new digital
economy is difficult.
There’s also the advent of video and media-rich
content. A B&B owner in the Hebrides wants to
point a camera out of their window and let Mother
Nature do their promotion – this content is bandwidth
heavy and depends on connectivity.
The Highlands continues to produce people
with entrepreneurial spirit but without these tools
they are disadvantaged. I am delighted that this
has finally been recognised at national level with
the recent announcement of a £264 million investment
in high speed broadband across Scotland. It
is welcome, although later than hoped for.
We have heard success stories from customers
in the Highlands — one coded a leading online
educational game on his laptop in a caravan on
Skye. We want to hear more.
The cloud computing revolution means today’s
entrepreneur doesn’t need to invest heavily in IT
start-up costs. Everything you need to take your
idea to market — website, CRM software — is
now available on a per-use basis.
If we can get the connectivity right, there is no
reason why the Highlands cannot be even more
innovative and competitive. As I realised 15 years
ago, the region has the people, the skills and
the spirit – it just needs the infrastructure to be
delivered.
Angus MacSween, is CEO of cloud
computing company iomart

Special feature
Inverness
Campus
A landmark new development is set
to stimulate business growth in the
Highlands, says Frank Simpson
Take the phrase ‘Inverness
Campus’, what
images come to mind?
If you pictured a landscaped,
modern business
park, you’re on
track. But that’s not
the complete picture.
Imagine a prestigious
site for the University
of the Highlands and Islands’ (UHI) …
new laboratories for pioneering scientific
research … international-class sports and
leisure facilities … a four-star hotel providing
jobs and training to disadvantaged
young people … plus an open space for
community arts and cultural events.
Each of these elements would be a
significant development in its own right.
Combining them into a single initiative, as
Highlands and Islands Enterprise (HIE)
is doing with Inverness Campus, is what
makes this ambitious project unique.
Infrastructure work has been completed
on 89 acres of the high quality, 215-acre
site located on the eastern side of Inverness.
With seven of the 17 plots under
development or attracting interest, six of
which will benefit from Enterprise Area
status for life sciences companies. This will
provide incentives such as rates relief, ‘fast
track’ planning and support for training.
There is also advance planning approval
for a life sciences business unit for
which HIE will consider funding in the
first quarter of this year meaning construction
could start in April with the
building complete a year later. As a further
incentive to investors, plots are being
offered at local market value and HIE is
ready to assist with support packages that
are on par with the best in the UK.
Work is also progressing on the cam-
We wanted to
encapsulate
the spirit of
a confident,
forward-looking
initiative
pus’ largest building (18,500 sq m) which
will house Inverness College UHI, part of
the University of the Highlands and Islands
(www.uhi.ac.uk) which is a network
of 13 colleges and research institutions
and a network of 50 outreach learning
centres throughout the region that provide
local access to more than 7,500 students.
Plans for several other projects are
well advanced, including new Inverness
premises for Scotland’s Rural College and
a 120-bed hotel that will be run by Highland
social enterprise Calbyn.
A plot has also been earmarked for an
innovative building to be shared by HIE
and UHI allowing collaborative opportunities
between research, education and
businesses to be explored and developed.
Rounding off HIE’s vision, the campus will
also provide sport, culture and leisure facilities
for both locals and visitors from its
accessible, attractive environment and the
planned multi-disciplinary sports centre.
“You would find the ambience difficult
to beat anywhere in the UK” says Ruaraidh
MacNeil, HIE’s director of Inverness
Campus. “It’s an innovative design with an
excellent public realm and landscaping.”
The key challenge was how to create a
location which would meet a diverse range
of needs from businesses, academic and research
institutions and locals who will use
the campus for leisure and recreation.
“We wanted to encapsulate the spirit
of a confident, forward looking initiative,”
said Ewan Anderson, who leads master
planners 7N Architects, Edinburgh. “It
is designed to connect to the Highland
scenery, encourage users to collaborate,
communicate and share ideas with the
structural design of the landscapes providing
its character”. says Anderson.
Positioned between two national trunk
roads, the A9 and A96, Inverness Campus
is also set to become a core element
of Inverness’ growing life sciences quarter,
with close links to Raigmore Hospital;
LifeScan Scotland, the country’s largest
life sciences company and the Centre for
Health Science.
Inspiring example
of close cooperation
As chair of the Inverness
Campus Partnership Forum,
I am delighted to be a part
of the implementation and
strategic vision for the new
campus, said Cabinet Secretary for
Finance, Employment and Sustainable
Growth. “Inverness Campus is one
of the largest projects that Highlands
and Islands Enterprise has undertaken
and will deliver a major boost to the
economy and the infrastructure of the
Highlands. It is not just a campus for
Inverness, it is a project of national
significance.
“It is groundbreaking in bringing
together the academic institutions of
UHI, Inverness College UHI, SRUC,
University of Stirling and the Centre for
Health Science with space for business
to work alongside them.
“The multi-million pound project will
bring together business people, academics,
researchers and the local community
to stimulate strong economic growth in
Inverness and further afield.
“The campus is a clear example of
what can be achieved through close
collaboration and an example of the
confidence that Highlands and Islands
Enterprise, the further and higher
education sectors, The Highland
Council, NHS and the third sector
have in the future of Inverness, the
Highlands and Islands and Scotland as
a whole.
“The region is already home to a
wealth of expertise in life sciences and
the campus will enhance the attractiveness
of Inverness to businesses in that
field, securing international investment,
John Swinney MSP
boosting employment and providing
top-class academic facilities.
“Inverness Campus will play a crucial
role in the expansion of research and
further and higher education in the
Highland region.
“When it opens in summer 2015,
Inverness College will provide our young
people with new skills and opportunities
to fulfil their potential and contribute
to Scotland’s economic success and
prosperity, helping us to deliver more
employment opportunities for our young
people.
“This is great news for the Highland
economy. The investment will bring
construction jobs to the area, attract new
businesses and highly trained professionals
to the Highlands.

6
Business Insight
Business Forum
Thursday January 9 2014 | the times
If you build it, they will come
The latest Times
Forum debated the
merits of the new
Inverness Campus, a
unique collaboration
which will benefit
the economy, higher
education and the
community, reports
Barry McDonald
JAMES GLOSSOP FOR THE TIMES
he 215-acre Inverness
Campus is set to be
a transformational
development for the
Highlands and Islands,
providing a
state-of-the-art environment
for businesses,
students and local
residents. As a new
centre for business, research and teaching,
work is ongoing to attract regional,
national and international investment. So
what does the panel feel needs to be done
for the campus to realise its potential?
Work is ongoing to attract new businesses
and research organisations to
Inverness Campus. What is the USP of
the campus and the region?
Stuart Black from Highland Council said:
“There are clear business benefits for
companies locating here. It’s a life science
enterprise area, it’s close to the main
hospital for the region, it has the Centre
for Health Science and it’s got LifeScan
Scotland.”
He believes the campus is truly distinctive
in nature and said: “It’s an exciting
place for the locals as the quality of the
environment in the campus is something
quite special. There are excellent water
features and footpaths and I think it will
become a very popular recreational area
for Inverness.”
Collaboration will be the ethos of the
campus. How can this best be fostered?
Ruaraidh MacNeil said: “We feel the Inverness
Campus is a unique project because
of the collaboration between the
NHS, university and private sector locally.
It’s a project which compares favourably
with any major campus development
around Europe.”
The collaborative nature of the campus
is the key to future success, said James
Cameron. “Its specific USP is the collaborative
nature we have between the health
service, academia and the business community.
That is the blend that will make
the Campus a success.”
Professor Alasdair Munro agreed. He
said: “The life science sector is in a very
collaborative frame of mind.
“We’ve been working for the last ten
years in developing the academic aspect
of health sciences, particularly research,
along with the strong commercial sector
represented mainly by LifeScan with well
over 1,000 jobs and the hospital which
employs something like 3,000 people. So
there’ a lot of collaboration.”
For Professor George Gunn, it’s about
attracting people and businesses with
specialist skills and expertise. He argued:
“The incentive for my team is to be part of
a team of like-minded people. My niche is
to focus on the research elements. A lot
of the kudos of an academic institution
are going to revolve around the quality
of research that we grow and one angle
of that is to have it associated with businesses.
To bring like-minded people gives
a sense of belonging.”
As well as promoting economic growth,
can the campus act as a driver for
demographic change, enabling the
area’s young to stay in the region and
encouraging relocation?
The campus, said Fiona Larg, must act
as a catalyst to retain the region’s young
people. “The campus will be a great attribute
to us in terms of persuading people
to stay but we don’t just want local
Around the table
Back row, left to right:
Fiona Larg, Stewart
Nicol, Ainya Taylor,
Stuart Black, Diane
Rawlinson, James
Cameron. Front row, left
to right: Isobel Grigor,
Magnus Linklater,
Ruaraidh MacNeil,
Prof Alasdair Munro
The Business Forum was chaired by Magnus Linklater CBE,
columnist for The Times Scotland, who was joined by:
• Ruaraidh MacNeil, Project Director, Inverness Campus, HIE
• Stuart Black, Director of Planning & Development, Highland
Council
• Diane Rawlinson, Principal, Inverness College UHI
• Fiona Larg, Chief Operating Officer, University of Highlands and
Islands
• Stewart Nicol, Chief Executive, Inverness Chamber of Commerce
• Prof Alasdair Munro, Chairman, Centre for Health Science
Company
• Prof George Gunn, Head of Veterinary Epidemiology, Scotland’s
Rural College
• Isobel Grigor, Chief Executive, Calman Trust
• Ainya Taylor, Highland Youth Convenor
• James Cameron, Head of Life Sciences, Highlands and Islands
Enterprise
young people to stay in the region, we
want to attract young people from the
rest of Scotland, the UK and international
students. One of the problems that we
have in the region is not so much a lack
of skills but a lack of people.
“We have very low unemployment
but it’s estimated we’re 19,000 people
short between the ages of 16 and 30.
The campus will play a major role in
redressing the balance. It will give our
young people the option of being able
to stay in the area, whereas before they
would have maybe gone to Edinburgh
or Glasgow.
“It’s also very important to bring new
ideas, new young people and I’m sure if
they studied here there’s a greater chance
they’ll stay and get jobs and bring up
families here.”
From an academic point of view, Diane
Rawlinson stated the close working links
between the Higher Education establishments
and businesses can benefit both in
the campus. She said: “The University of
Highland and Islands is unique in that it
can offers something to every member of
the community and also because of its offering
to business.
“Local, regional and international businesses
can engage with the university and
have a response to their workforce needs
at every level. They can come through a
single door for work and enterprise.
“We can provide them with apprentices
and support them through their
programme and when they leave and go
to work they can then re-enter the university
and develop further to research
or degree level all within the one institution.
That’s unique in the UK. We’re excited
about the potential to attract companies
to the Highlands and Islands.”
Ainya Taylor, who represents young
people in the region and feeds their views
to the area’s decision makers, agreed. She
added: “Young people in the Highlands
and Islands will be attracted to the campus.
“Fewer young people can afford to
move away and to see such a great campus
being developed has really encouraged
more people to stay here. It will also
encourage people from across Scotland
when they see the great opportunities
that studying in the Highlands can offer,
such as the outdoor sports and the Cairngorms.
There are a lot of opportunities
here which students wouldn’t have elsewhere.
I think young people will recognise
that and want to come here to study.”
How important is connectivity to the
success of the region and the campus?
Stewart Nicol is convinced that connectivity
is vital for the campus and the
region’s success. He argued: “I think the
connectivity we have both in terms of
physical infrastructure, road, rail and air
links, is massively important for Inverness
and the Highlands. But so is digital
connectivity.
Hotel Artysans, which will be located
on the campus, will operate as a social
enterprise run by the Calman Trust and
Albyn Housing. Should entrepreneurs
be given more support to create social
enterprises?
Isobel Grigor, believes social enterprise
could prove a huge boost to the region.
She said: “A well run business is going
to be a very good learning environment.
Hotel Artysans will directly combine the
business of delivering service to customers
of a high quality with a simultaneous
learning experience for young people.
Any surplus generated will be delivered
directly in return to sustain that work
in the long run. For the area there is no
question that this will be more advantageous
than a business that takes its profit
out of the area.”

the times | Thursday January 9 2014 7
Business Insight
HIE the driving force
in a dynamic region
The Highlands are
now a premier hub
for ambitious and
innovative business
Highlands and Islands
Enterprise
hit on a bright solution
when it was
bidding to attract
French IT outsourcing
multinational
Capgemini
to bring 500 new
jobs to Inverness:
give up its own headquarters and move
to Inverness Campus. “It’s a symptom of
our devotion to developing sustainable
economic growth,” says Professor Lorne
Crerar, HIE’s chairman and a founding
partner of the Scottish corporate law firm
Harper Macleod.
Significantly, HIE’s plan is to co-locate
on the campus with staff of the University
of the Highlands and Islands (UHI).
It is believed to be the first time a university
and a development agency have
chosen to share premises, and provides a
powerful signal of the collaborative environment
the campus is designed to foster.
As the economic and community development
agency for more than half
the land area of Scotland, HIE is acutely
aware of its responsibilities to all parts of
the area it covers.
Some of its investment is directed to
There are great
opportunities
for trading
at a distance
for small
companies
JAMES GLOSSOP FOR THE TIMES
HIE chairman Professor Lorne Crerar
projects which benefit the entire region,
such as the University of the Highlands
and Islands.
Another is the £146 million rollout of
next generation broadband (NGB) currently
being led by HIE and BT across
the Highlands and Islands. The UK’s
most complex broadband project, this
will cover up to 84 per cent of premises
by the end of 2016. HIE’s ultimate aim is
for NGB to be available everywhere in
the region by 2020.
“It will create great opportunities for
trading at distance,” says Crerar. “Think
of the opportunities for small businesses
with phenomenal services and products.”
Look around the Highlands and Islands,
and you’ll find ample physical
evidence of HIE’s spend being widely distributed
in line with strategic objectives
based on the location of resources, and
The Golden Bridge
links the Inverness
Campus with the city
opportunities in growth sectors including
energy, marine sciences and digital
health.
HIE, the Scottish Government, and
Scottish Development International
(SDI) have since 2008 supported infrastructure
and business development at
the former NATO airbase now owned by
the Machrihanish Airbase Community
Company (MACC) just north of Campbeltown
in Kintyre. The site hosts tower
manufacturing for wind power, other
renewables activity, and Campbeltown
airport.
Wind Towers (Scotland) Ltd, the largest
single employer in the area, is a joint
venture between energy company SSE
and HIE, the agency owning 19.9% of the
ordinary share capital.
At Dunstaffnage near Oban, the European
Marine Science Park is being developed
by HIE as a location for marine
science R&D and enterprise, capitalising
on the success of the adjacent Scottish
Association for Marine Science.
HIE part-funded development of a
masterplan based on redevelopment of
the dry dock at Kishorn, Wester Ross, the
former scene of large offshore oil fabrication
projects. “Kishorn is extremely well
placed for the development of wind, wave
and tidal energy resources off the West of
Scotland,” says Crerar.
The agency is also contributing more
than half the cost of the £9.5 million Port
of Entry project at Lochboisdale, South
Uist. Creating new marine leisure and
fisheries facilities and providing land for
community and commercial development,
the project is due for completion in
2015. “It will support economic and community
development in a fragile area. It
could very well be transformational for
that part of the outer islands,” Crerar
says.
Over at Arnish on Lewis, HIE is supporting
development of a major manufacturing
site tenanted by Burntisland
Fabrications (BiFab) to support fabrication
work for oil and gas and offshore
renewables. The site enjoys Enterprise
Area status. The Outer Hebrides aspire
to become a global player in renewable
energy generation.
HIE invested £2.95 million, including
£1.18 million from the European Regional
Development Fund, to create industrial
units next to Hatston Pier, Kirkwall,
Orkney.
These meet the needs of wave and
tidal and energy developers using the European
Marine Energy Centre (EMEC)
test site at Eday. EMEC, the world’s only
grid-connected and accredited wave and
tidal energy test centre, was established
in 2003 with HIE’s backing.
Across the Pentland Firth, HIE has
supported the £20m upgrade of port infrastructure
at Scrabster, Caithness, anticipating
construction and supply chain
needs of the offshore wind and wave energy
industries as well as oil and gas developments
west of Shetland. The world’s
largest array of tidal energy machines is
to be installed in the Pentland Firth.
“The investment at Scrabster shows
our confidence in future opportunities,”
Crerar says.
At Nigg, Easter Ross, over 1200 people
are employed on the fabrication site
owned by Highland-based Global Energy
Group (GEG). “When I first went
there five years ago, the site was virtually
derelict,” Crerar recalls. “It shows
where the public sector really can help
with infrastructure projects of that magnitude,
driven clearly by a private sector
partner.”
HIE provided £1.8 million towards
GEG’s development of the former oil fabrication
yard and is supporting other port
infrastructure improvements in the area.
Oil fabrication has returned and GEG
and the public sector have set up of the
Nigg Skills Academy that aims to have
trained up to 3,000 people in fabrication
skills between 2012 and 2015. Nigg has
Enterprise Area status.
Aside from coastal infrastructure, HIE
invests in industrial units and other facilities
bringing employment inland.
The 100-acre Enterprise Park Forres
(www.enterpriseparkforres.co.uk) hosts
engineering, business outsourcing, medical
diagnostics, and aquaculture systems
companies, among others. Units and land
are available in a location with Enterprise
Area status.
Set in a beautiful environment, it is
towards the eastern end of the ‘A96 corridor’
between Moray and Inverness that
has become popular with digital health
and other companies. Co-funded by HIE,
The Alexander Graham Bell Centre being
developed at Moray College UHI,
Elgin, will be a research, education and
continuing professional development facility
for life sciences. Remote and digital
healthcare based on R&D by clinicians
in the area will be the main initial focus.
Commercialisation activities will increase
knowledge transfer to and from local
companies.
“The A96 corridor will continue to attract
people who want to live and work in
a beautiful place with a great social and
geographic environment,” Crerar says.
“HIE is about creating centres of excellence
that pull in employers attracted by
the unique benefits that we have in the
Highlands and Islands.”

8
Business Insight
Knowledge-based economy
Inverness Campus
looks set to become
a role model for
bringing together
learning and business,
reveals Rob Stokes
Thursday January 9 2014 | the times
he foundations of
Inverness Campus
are not so much set
in cement as in the
economic history of
the Highlands and
Islands over recent
decades. With a
growing population,
and unemployment
rates consistently below national averages,
the region’s fortunes as a whole
have improved dramatically in the last
50 years. The creation of the Highlands
& Islands Development Board (HIDB)
in the 1960s and its successor Highlands
and Islands Enterprise (HIE) in 1991 were
major steps which, under successive governments,
helped to reverse previously
chronic depopulation and create a more
diverse economy.
“Population is growing sustainably in
around 90 per cent of the region,” says
Ruaraidh MacNeil, director of Inverness
Campus. “But the 16 to 25 year olds demographic
remains an issue.” Which is
due largely to young people leaving to
access mainly higher education and first
jobs. MacNeil is himself an example of
this trend. Originally from Barra, he left
the region in his twenties for a job in
London before returning to take up a post
at the HIDB in Inverness.
However, many such migrants end up
staying in areas where they studied or
started a career. The result is that their
skills can be lost during the years when
they could make a considerable economic
impact. Hence the emphasis on creating
and developing the University of the
Highlands and Islands for which HIE has
been a main proponent and driver.
“For hundreds of years, the region had
aspirations towards its own university but
never managed it until now,” MacNeil
says. “It has grown out of awareness that
the healthiest economies have strong
universities at their core.”
The evolution of UHI’s federal structure,
embracing 13 colleges and other
research institutes across the region, culminated
in formal university status being
awarded in 2011. The Inverness College
UHI building under construction at the
heart of Inverness Campus will be a powerful
symbol of its status.
“With the title secure, the aim is that
UHI becomes a very strong university
that young people from the region and
elsewhere will want to put down as their
preferred choice,” MacNeil says.
“It’s a brand new university with a
unique model. With so many young people
now being technology literate, and with
new means of distance learning, the time is
right for UHI to make a powerful impact.”
HIE and UHI are negotiating to share
4,200 square metres of space in another
new building on Inverness Campus.
UHI wants an Inverness site to support
its partner colleges and institutions, so
is looking for a research and education
building on the Campus as a partnership
asset. HIE needs a new headquarters as
it has to hand over its present offices to
Capgemini in the summer as the firm
will use the location to bring 500 jobs to
the city. “UHI and HIE agree that as we
The landscaping of
the campus provides
its unique character
Foundations for a place
to learn, lead . . . and live
The people in
Oulu advised
us to focus on
key strengths
– in our case,
healthcare and
life sciences
Ruaraidh
MacNeil
project
director,
Inverness
Campus
collaborate on economic development
we should perhaps co-locate, leading potentially
to even more cross-fertilisation,”
says MacNeil.
UHI is talking to Scotland’s Rural College,
which is focused on agriculture research,
about sharing part of its building.
Other proposals to join HIE and UHI on
this plot include a Science Academy to
promote science, technology, engineering
and maths to school students. “It’s still being
fleshed out,” says MacNeil. “But it is
an exciting idea which could open up new
opportunities for young people as well as
broadening the regional skills base.”
Inverness Campus became a coherent
project in the last decade as three themes
converged: HIE’s mission to attract and
foster more knowledge-based industries;
the need to replace Inverness College’s
outdated building if UHI was to have an
iconic focus; and the rise of the region’s
life sciences sector, which employs over
1,000 in Inverness alone.
“In LifeScan Scotland, which is part of
Johnson and Johnson, we were fortunate
to have Scotland’s largest medical technology
company in Inverness, and that
shaped our thinking about what could be
achieved with UHI and the knowledge
economy,” MacNeil recalls.
HIE’s vision for Inverness Campus really
crystallised following its success with
the Centre for Health Science, which
opened in 2007.
Casting around for appropriate development
models among similar regions,
with a university and one major city considered
remote from the rest of a country,
HIE lighted on Oulu in northern Finland.
“In the early 1960s, Oulu was similar
to Inverness. Yet it had managed to
transform itself over 30 years into a high
technology based city with a population
around 192,700,” says MacNeil. “This
transformation was on the back of the
local college becoming a university focused
on electronics and technology.”
“It was a good model,” says MacNeil.
“The people in Oulu advised us to focus
on key strengths — in our case healthcare
and life sciences — and make sure we have
a strong, research focused university.”
The result was the innovative Centre
for Health Science a partnership led by
HIE to capitalise on the region’s growing
reputation in life sciences.
Bringing together units from four Scottish
universities, pioneering diabetes
research, a leading dental school, and
clinical care and treatment for patients,
the Centre was conceived as a model of
productive collaboration between academics,
health professionals and business
people, facilitated by the public sector.
Success with this multi-million pound
project, which opened in 2007 and now
employs around 250 people, helped drive
and focus the agency’s vision for Inverness
Campus. Indeed, it could almost be
seen as a trial run for what HIE aims to
achieve, on a larger scale, with the Campus
over the coming years.
In a reverse move, Scandinavia now
comes to Inverness in search of models. “A
lot of interest in the Centre for Health Science
and Inverness Campus has been from
Norway,” MacNeil says. “Overall, we’ve
hosted well over 100 visits now, and the
response has been overwhelmingly positive.
Once people understand our vision,
and see the effort that is going into ensuring
the new landscaping and built environment
match the superb quality of the natural
surroundings, they’re just blown away.”
He admits that 15 years ago, the notion
of building a knowledge-based economy in
the Highlands and Islands seemed a tall order.
“I think our confidence has grown,” he
suggests. “Back then, because it had never
happened before, people imagined that it
was impossible. But when we went to Oulu
they advised us to just start doing it.
“One critical piece of advice they gave us
was the importance of partnership - bringing
together interested parties, exploring
themes of common interest and developing
highly ambitious ideas which a broad
community of interest could get behind.
“As well as being the catalyst for the
highly collaborative model which we
then developed for the Campus, that really
got us thinking about the need for a
community purpose to be at the core of
the project. And that’s an aspect which
really makes Inverness Campus unique.”
Community and leisure aspects of Inverness
Campus include proposals for
significant sports facilities. Most existing
facilities are in the west of the city while
the majority of population growth has
been to the east, close to the site of the
Campus.
In discussion with sports associations
and with UHI, which is keen to develop
its academic interest in sport, HIE is
working on a model to provide sports
facilities for students, staff and the community
at large.
“It may also focus in time on supporting
elite sports and on growing the academic
content around that,” says Mac-
Neil.
“A key point is that we want the campus
to be exciting for young people. We
want there to be lots of activity on site,
accommodation for them, and a healthy
cultural scene — music, drama and so on
— attached to it. That’s the mission for
the next five to ten years.”

the times | Thursday January 9 2014 9
Business Insight
With every fibre of our being
A faster and more
reliable broadband
system could radically
transform how we
communicate in many
different areas of life,
writes Ginny Clark
It seems incredible that it is only
37 years since the GPO closed the
last manual telephone exchange in
the UK, at Portree on the Isle of
Skye, paving the way for Subscriber
Trunk Dialling, then wholesale
conversion to electronic systems,
a modernisation programme that
was not completed in Scotland
until the mid-1990s. However, less
than a generation after that, in 2014 and
beyond, BT will be spinning out a network
web that offers fast, efficient digital
connectivity to some of Scotland’s most
remote corners.
In their most complex digital project
yet, BT will be tackling Scotland’s rugged
terrain to deliver next generation broadband
(NGB) to homes and businesses in a
£146 million investment project that has
been developed by Highlands and Islands
Enterprise (HIE).
This project, representing another step
towards the Scottish Government’s target
of making world-class NGB available to
all by 2020, will increase high-speed fibre
broadband coverage across the Highlands
and Islands to up to 84 per cent of
premises by 2016. Public sector investment
will total £126.4 million, and it is
being delivered through a Scottish Government
fund that includes finance from
Broadband Delivery UK (BDUK), and up
to £12 million from HIE, with BT investing
an additional £19.4 million.
It’s an ambitious move on a number of
levels, explains Brendan Dick, Director
of BT Scotland, as it’s not only the most
significant digital infrastructure project
in Scotland’s history, helping Highland
and Island businesses to compete on the
international stage; it’s also part of a wider
aim to revolutionise the way in which
we deliver everything from education to
public services.
“We’re at a really interesting time
for high-speed digital services,” he says.
“Those in government and business do
genuinely understand that to compete
globally, you must have digital connectivity.
HIE understands this, but with this
programme in particular there has been
a significant step change in the emphasis
on gaining economic and social value
from the infrastructure by helping communities
and businesses to exploit it.
“It’s striking that the latest research
shows for every £1 invested in broadband
infrastructure, the UK economy will
benefit by £20. That’s a really impressive
figure, which emphasises the importance
of looking at high-speed connectivity in
terms of economic benefit.
“The Scottish Government’s ambition
for 2020 recognises that it’s not just about
finding partners for investment, but at
the same time driving the exploitation of
NGB through a digital participation programme
into the third sector and out into
The latest research
shows for every £1
invested in broadband
the UK economy
will benefit by £20
the communities. If we only put pipes in
the ground, and no one does anything
to make sure people benefit from that, it
would be a waste.”
Dick believes initiatives such as BT’s
partnership with the Scottish Government
and Glasgow Housing Association
(GHA) are good examples of the way
forward. GHA has been involved in trial
projects to encourage digital participation
by tenants. In a city reported to have
a low level of broadband take-up, at just
60 per cent compared to the UK average
of 78 per cent, GHA’s figures showed only
one third of their tenants were online,
and that 90 per cent of their tenants over
the age of 65 had never used the internet.
“It’s very apposite in looking at the
broader aspect of connectivity, where
GHA have demonstrated to a number of
their customers who were not engaged
in the digital network that they would be
disadvantaged in future. It’s cheaper to
buy online, while the ability to get jobs
without online access is also decreasing,
and there are other issues, such as interacting
with public bodies and accessing
services following welfare reform.
“So there is an opportunity in Scotland,
not just to catch up England on take-up,
but through a joined-up approach to
transform the landscape of how we exploit
connectivity.”
First, however, must come those “pipes
in the ground”. Improvements are also being
rolled out in Dumfries, the Borders
and Aberdeenshire, among other places,
in a second Digital Scotland Superfast
Broadband partnership with the Scottish
Government, local authorities and others,
but the Highlands and Islands project represents
an incredible undertaking for BT.
Their engineers have started work on
an infrastructure project that will be using
more than 800km of fibre to build a
‘backbone’ that will run from Campbeltown
in Argyll to Brae on Shetland. They
will also use a further 1100km of existing
fibre that is already in the ground, linking
in dozens of exchanges to ensure this web
of fibre will extend from the backbone
out into local communities.
In summer, around 400km of subsea
cables will then be stretched across 20
JAMES GLOSSOP FOR THE TIMES
Brendan Dick,
Director of BT
Scotland, emphasises
the opportunity for a
joined-up approach
Those in government
and business really
do understand that
to compete globally
you must have digital
connectivity
points to the islands. This will be a huge
task in a challenging environment, but
what it will achieve will be measured in
how the communities that will benefit
then realise the potential.
“This will be a journey of some years,”
says Dick. “This is phase one, and what
will be really interesting, where there’s
a hunger for more connectivity in more
rural parts, is how people recognise this
as an opportunity not just locally, but internationally,
to transform how they gain
value from it.
“The vast majority will get high speeds,
but how to get this to the last few homes
and businesses is a journey that will take
time. Yet in these areas digital access can be
particularly important, not just for business,
but also for other reasons such as learning.
“The network is designed to be open to
the whole communications industry, and
the UK has one of the most competitive
retail communications markets in the
world. Fundamentally, what is going to
drive the exploitation of this capability are
the hundreds of providers selling services
and applications at very competitive prices,
and as prices drop the market grows.
“The upload speeds are going to be
higher and guarantee a better service,
which is particularly important not just
for social media, and the creative industries,
but also for video interaction and
business tools. Digital delivery is increasingly
an issue in the area of health, too,
and in education. So in terms of delivering
better services to people in our communities,
the pressure on public bodies to
drive efficiency is strong, and so the circle
is back to participation.
“As digital platforms are changing how
we deliver these fundamental services,
issues such as the low take-up in areas
of deprivation, which are well served by
infrastructure, shows the hard part is understanding
why. Is it to do with the numbers
of older people or poverty or both?
Understanding this is very important for
taking Scotland to the next level in terms
of a society that is inclusive.
“BT, a company with a history of having
employees living throughout our
Scottish communities, strongly believes it
has a place in answering this.
We need to listen to hard evidence,
and to think more holistically about infrastructure.
We have an additional role
to help make Scotland successful. For BT
there is a genuine desire to be part of delivering
that future for Scotland and the
UK, it’s part of our legacy, and we’re a big
part of the engine driving this forward.
“The aspiration for 2020 is just the
start, and here in Scotland, a country
with a history steeped in innovation,
there is now a great opportunity to take
us to another level.”

10
Business Insight
Communications
Our cable knit
communities
A better and faster
broadband will help
to create a virtuous
circle in even the
most remote areas
he most ambitious digital infrastructure
project in Scotland’s
history will transform lives as
communities are connected in
some of the most challenging
environments in Europe to underpin the
successful economic development and regeneration
of the Highlands and Islands.
Stuart Robertson, HIE’s director of
Digital Highlands and Islands, is heading
up the £146 million partnership infrastructure
project, where BT will deliver
high-speed fibre broadband to more than
eight in 10 homes and businesses across
the area by the end of 2016.
“This is the most significant upgrade
to digital infrastructure involving public
money ever in Scotland,” he says. “ The
whole way we live our lives now means
connectivity is not only important but
vital. Big changes to government departments
and services mean internet access
is now key, and it’s getting to the point
where it’s almost essential to have access
in the community, if not the house.
“High-speed fibre broadband in the
Highlands and Islands will make a
real contribution to our communities’
prosperity. Good broadband supports
growth, particularly in remote areas. It
opens up the door to new opportunities
for existing local businesses and makes
investment more attractive.”
Without this public sector support
fewer than one in four properties in
the Highlands and Islands would have
fibre broadband through a commercial
approach. This project will bring fibre
broadband speeds of up to 80Mbps to
156,000 homes and businesses that will
be served by more than 250 exchanges.
HIE is also providing help to communities
to get online and information roadshows
are being rolled out for the first
areas around Inverness and Moray to go
live early next year: Ardersier, Buckie,
Milton of Leys, Fortrose, Hopeman,
Culloden, Lhanbryde and Lossiemouth.
There are some particularly remote
corners that are beyond the reach of
existing next generation broadband
technologies. However, a part of the
Highlands and Islands Next Generation
Broadband Project will begin the
job of looking for solutions. Alternative
technologies such as wireless, satellite
and advanced copper are being explored.
The Scottish Government has also
launched the £5 million Community
Broadband Scotland (CBS) initiative to
provide advice and support for the most
remote communities to help them secure
their own broadband solutions.
“CBS is a parallel project that can help
those communities that might miss out,”
says Robertson. “Some people might say
it’s most important to have connectivity
Stuart Robertson says
that high-speed fibre
broadband will make
a real contribution to
communities’ prosperity
Thursday January 9 2014 | the times
in the areas where there are the most
people, others argue it’s the people at
the more remote edges of Scotland who
have a greater need for connectivity. The
fact is it’s crucial to both, and we must
strive to introduce access to connectivity
everywhere. There is much emphasis
on the ‘84 per cent by 2016’, but let’s not
forget, while it’s a great first step, we
want to go further.”
This might be a huge infrastructure
undertaking, with more than four and
half times the money invested than in all
previous telecoms project since the late
1980s, but installation is just the start.
“There is huge enthusiasm for this
project, but we won’t just step back and
say ‘job done’ once the infrastructure is
delivered. It’s crucial in tandem we have
initiatives that encourage businesses
and individual people to use it — to
go online and see the many benefits of
connectivity. HIE is already leading on
a project that has seen more than 100
businesses take individually tailored
‘digital health checks’. As well as business
benefits the region benefits from higher
take-up of services too. There’s a virtuous
circle whereby money comes back in
to help get faster broadband out to those
who are currently not in the plan.
“We get caught up in discussing this in
terms of the infrastructure, but the key
point is about how people use it. So it’s
important to demonstrate the potential,
show how to make the best use of this
technology. Connectivity is important on
many different levels, from health care
and education to communications and
creativity – it’s not just for faster email.”
COMMERCIAL REPORT: QUILTER CHEVIOT
Wealth management’s stellar growth
A recently-merged fund
management company has
seen double-digit growth
in 2013 in its Scottish
based operations
Scottish wealth management
company is
celebrating double digit
percentage growth in its
funds under management
during 2013.
Quilter Cheviot Investment Management’s
offices in Glasgow and Edinburgh
now manage over £674 million of funds
– a growth of more than 21 per cent
compared to the start of last year when it
was managing about £554 million.
The company, which employs 21 at
its Castle Terraces offices in Edinburgh
and West Nile Street base in Glasgow,
was formed last year when Quilter and
Cheviot Asset Management merged.
The Glasgow and Edinburgh teams
advise clients across Scotland and the
company is one of the UK’s largest independently
owned discretionary investment
firms, with offices in 13 locations
across the UK, Jersey and Ireland.
Quilter Cheviot CEO Martin Baines
said the growth in Scotland had helped
the firm to break the £15 billion barrier
for funds under management.
He added: “Everyone has worked
extremely hard to make the merger of
the two businesses a success. At the same
time we have continued to deliver for
our clients and are delighted to be able to
celebrate such stellar growth across our
Scottish operations.”
Quilter Cheviot focuses primarily
on structuring and managing bespoke
discretionary portfolios for private clients,
charities, trusts, pension funds and
intermediaries. It recently won a major
industry award when it was named the
best overall large firm at the Citywire
Wealth Manager Investment Performance
Awards.
Head of the Glasgow office Alan
Cameron said the company intended to
capitalise on its record for consistency
and quality of performance.
He added: “That track record is unquestionably
helped by our position as an
independent company which combines
an unashamedly old-fashioned approach
to client relationship management with
a very forward-thinking approach to asset
management.”
The head of the Edinburgh office, Alan
Aitchison, said: “The merger of the two
Alan Aitchison, head
of Quilter Cheviot’s
Edinburgh Office
says the merger has
created a firm with
significant resources
businesses has created a dynamic firm
which has significant research and analytic
resources so can bring the very latest
insight and intelligence to bear. We are
pleased to be part of Scotland’s international
reputation as a centre of excellence
in asset management.”
Mr Aitchison, who is also a Trustee of
the Church of Scotland Investors Trust,
added: “In 2014 we will be focused on
continuing to drive fund performance and
on cementing our marketplace reputation.
We believe our proposition gives us
real opportunities to win new clients and
extend our reach with financial advisers
and professional intermediaries such as
lawyers and accountants.”
Mr Cameron, whose clients include
trusts, private individuals and pension
accounts, added: “There is a real sense of
the UK and global economies turning a
corner and that gives us real confidence
for the year ahead.
“There is growing business investment,
exports are picking up and will remain
solid and we reckon the economy may
grow by about 1.5 per cent in 2013 and
about 2.5 per cent in 2014.
“The signs elsewhere are also encouraging.
The US economy, in particular, looks
as if it may achieve 3 per cent growth in
2014 and the Eurozone, notwithstanding
long-term challenges, has avoided the
meltdown that many feared.
“The anecdotal evidence in Scotland
also suggests we can be optimistic. Our
contacts and clients all report increased
confidence, which we believe will be
one of the key components of sustainable
recovery.”

the times | Thursday January 9 2014 11
Business Insight
Food & drink
Fish farmers tip the scales in our favour
The success of the
salmon industry has
seen Scotland become
a major world player,
reveals Rick Wilson
With a little more than four
decades on the clock,
Scotland is the now the
world’s third largest producer
of Atlantic salmon,
exporting to more than 60 countries. It’s
a fact of which the chief executive of the
Scottish Salmon Producers’ Organisation
(SSPO) is justifiably proud. He is similarly
proud of the health record of the
country’s salmon farming industry – “it’s
exemplary” – and the fast-growing investment
that has so impressively stimulated
its economic performance.
“Last year saw the biggest year-onyear
increase on record,” says Scott
Landsburgh, referring at his Perth office
to the organisation’s most recent economic
report. “Up to nearly £62 million,
bringing the total for the past three years
to nearly £154 million.”
In the meantime, the industry delivered
product to the value of almost £600
million a year, with exports of whole,
fresh salmon rising in 2012 to an all-time
high. And for the third year in succession
new lifeblood was injected into remote
areas, with direct employment by SSPO
members rising by 76 jobs. While Landsburgh
says “we’re not a labour-intensive
industry”, he calls such a figure “significant”
when it boosts indirect jobs in infrastructure
and processing.
In fact, 3,960 jobs are supported by the
organisation’s members alone, with 3,548
in the Highlands and Islands, while over
the piece the industry has benefited that
region to the tune of £145 million. Indeed,
with its buoyancy so reflected in the success
of the communities it helps to sustain
– where employees’ total gross pay
has increased to a total of £61.5 million –
Landsburgh sees its relentless growth as
adding up to “one of the great economic
success stories of modern times”.
The story began with the first recorded
salmon aquaculture site set up in Scotland
in Loch Ailort in 1970 with a production
of just 14 tonnes, “but the industry didn’t
really take off properly functioning and
producing until about 1980, so in a way
we are really only 33 years old”. In the
meantime, it has seen not just that rapid
growth – to 160,000 tonnes a year – but
a “huge consolidation” among producers,
from more than 100 involved companies
to the current seven, with 90 per cent of
production generated by five of them.
The SSPO economic report cites “significant
increases” in emerging markets,
such as the Middle East and the Far East
(64 per cent and 95 per cent). However,
growing demand seems unlimited, with
a suggested short-range target of an additional
50,000 tonnes to the market by
2020. Is that achievable?
“Quite easily,” says Landsburgh, “simply
because demand is much greater than
There are significant
increases for Scottish
salmon exports in
emerging markets such
as the Middle East
supply. And when provenance, traceability
and identity are being ever more
valued by consumers, it’s heartening to
know that our largest food export ticks
all the boxes.”
While 60 per cent of production still
stays within the UK economy, he sees the
rising remainder destined to go abroad,
with the European Union as a conspicuous
target, noting that 65 per cent of all
EU seafood consumption is imported.
“It’s no secret that we need to grow this
industry, not only to supply worldwide
demand,” he says, “but also to sustain and
develop the communities in which we
operate.”
But while the industry may help revive
fragile communities, the fish communities
are also fragile. So SSPO members
take nothing for granted, spending large
amounts of money and energy on keeping
stocks in robust health.
Landsburgh is quick to concede that
salmon farming is “not for the fainthearted”,
by which he means managing
welfare is vital “when we have some 80
million fish in the sea at any one time —
that is a huge amount of money at stake”.
He adds: “Fish farmers must be able to
protect their fish in the same way as a
shepherd or chicken farmer would protect
their livestock against foxes.
“We must always keep in mind the old
adage: ‘Look after the fish and they’ll
look after you’.”
Industry displays a healthy appetite for success
A bountiful natural larder and reputation
for quality have seen the food and drinks
industry serve the nation, says Heidi Soholt
JAMES GLOSSOP FOR THE TIMES
Home to some of Scotland’s
most iconic food and drinks
manufacturers, the Highland
and Islands region has built
up a worldwide reputation
for quality and innovation. Some products
define a country and, in Scotland, a
large proportion of instantly recognisable
brands are produced in the Highland and
Islands. Goods such as salmon, whisky
and shortbread are transported across
the globe, and the region also boasts a
thriving sector of small, innovative producers.
The influence of the food and drinks
industry on the local economy cannot be
overstated. It currently generates over
£1 billion turnover per annum and encompasses
more than 1,900 businesses,
supporting around 25,900 full time jobs.
Much of its success is down to quality
and diversity. The region is endowed with
excellent raw materials and ingredients,
high in healthy oils and compounds such
as Omega-3. Producers also benefit from
a strong support system, enabling them
to compete effectively both domestically
and overseas.
Scottish whisky is a major export, contributing
over £2.5 billion to the economy
nationally. The Speyside area has a high
concentration of distilleries, including Aberlour,
Cardhu, Glenlivet and Glenfiddich.
The area is also home to flagship Scots
firms, Walkers Shortbread and Baxters.
Both are major exporters and employers
with the latter, famed for its soups and
preserves, employing around 500 people
locally.
Highland and Islands Enterprise (HIE)
believes the food and drinks sector has
significant future potential for growth,
and is working with the region to achieve
£525 million additional turnover by 2017.
“Not only is the food and drink industry
a significant economic driver with
great potential for further development,
but the quality of our food and drink
products plays a key role in defining our
region to the rest of the world,” said Iain
Sutherland, HIE’s senior development
manager, food and drink.
“The sector comprises farmers, fishermen,
fish farmers, food manufacturing
businesses that process the primary food
products, and businesses that provide the
goods and services required up and down
the food and drink supply chain.”
Salmon is arguably the area’s most important
product. Currently exported to
64 destinations worldwide, the industry
also supports around 6,200 jobs.
The Scottish Salmon Producers Organisation
(SSPO) reported record figures
for exports with significant increases
in emerging markets such as the Middle
East and Far East. Recent figures show
the food export was worth £150 million in
the first five months of 2013, compared to
£132 million for the same period in 2012.
Gross pay received by employees, 90 per
cent of whom are located in the Highlands
and Islands, increased to £61.5 million,
with an overall benefit to the region
of £145 million.
SSPO chief executive Scott Landsburgh
believes current growth is sustainable.
Major investment in new production
facilities, £62 million in 2012, means that
the industry is confident of achieving its
220,000 tonne target by 2020, with some
30 to 35 per cent increase in employees.
“From a market point of view, the demand
for Scottish salmon is there – it’s
no longer about creating that demand,
it’s about creating the capacity to meet
it,” commented Landsburgh.
“We need to do this in a sustainable
manner that is in keeping with being
good to the environment.
Scotch whisky now
contributes more than
£2.5 billion to the
economy nationally
“If we can attain our goals, this will
have a very positive impact on the local
economy – not only in terms of creating
direct jobs, but also those in ancillary services
such as processing.”
Highland Council supports the food
and drinks industry through a number of
successful initiatives, including the Food
and Drinks Strategy, which promotes local
produce at events such as the Royal
Highland Show.
“We also work with partners in the
tourism industry to promote linkages
between food and drink and hospitality,
ensuring visitors are able to sample our
world famous high quality produce,” said
Councillor Thomas Prag, chair of planning,
environment and development.

12
Business Insight
Energy investment
Where the future
can be renewable
‘Opportunity’ is the key word as Caithness and
North Sutherland face change after Dounreay’s
decommissioning, reveals Heidi Soholt
ITH not the least of them
being its northernmost
location and often-hostile
climate, it’s an area
well accustomed to challenges
– from Norse rule to Highland
Clearances – but Caithness and North
Sutherland is all set to face yet another.
Contrary to what some might believe,
that ‘faraway’ geography has never
meant an absence of advanced thinking.
And this time it’s a seriously 21st century
situation — caused by recent history.
This saw the region, though Dounreay,
become the hub of UK nuclear research
and development, and the challenge today
— with cessation of electricity generation
in the 1990s and run-down of decommissioning
work – is how to achieve
a successful transition from a nuclear-dependent
economy to a more diverse and
sustainable one.
“Of course there’s a challenge, but
there’s every reason to believe we can rise
to it,” says Sir Anthony Cleaver, chair of
the body overseeing this transformation
– the Caithness and North Sutherland
Regeneration Partnership (CNSRP) that
includes organisations such as Highland
and Islands Enterprise (HIE), the Highland
Council and the Nuclear Decommissioning
Authority (NDA).
With a vision to provide a healthy,
economically stable environment by
2020, it is currently working with the
energy and business service sectors to
support growth, jobs and diversification.
It aims to deliver a targeted programme
of inward investment as well as key infrastructure
to ports, harbours, road, rail
and air transport, and skills transition
through the major partners’ investments.
The region is blessed with enviable
natural resources in wave, wind and tidal
power, already near to the UK’s first commercial
wave and tidal energy sites in the
Pentland Firth and Orkney Waters, and
offshore wind energy sites in the Moray
Firth. And the CNSRP believes the
highest jobs growth will come from the
renewable and oil and gas sector. Plans
have been drawn up to build Europe’s
largest tidal power project off the coast
of Caithness.
What’s more, the area is also home to
three of the five sites competing for the
Scottish government’s Saltire Prize for
marine energy.
It also boasts a new Engineering,
Technology & Energy Centre (ETEC) in
Thurso; and along with the neighbouring
Centre for Energy and the Environment,
this places the region is at the heart of research
and skills development in marine
energy.
Digital connectivity is another focus,
with Next Generation Broadband (NGB)
being rolled out across the area.
Tourism is also viewed as a growth sector,
with a £6 million project underway
Sites such as Scrabster
in Caithness are key
to the economic
rejuvenation of the area
Thursday January 9 2014 | the times
to develop John o’ Groats into a worldclass
visitor destination, and the newlycompleted
first phase of the project — by
Natural Retreats, Heritage GB and HIE
— is the first step in establishing the
landmark town as a leading destination.
A key advantage all round has to be
a workforce with decades of experience
in the nuclear industry. Skills gained at
Dounreay are transferable to other sectors,
such as renewables. Meanwhile, locally-based
supply chain companies have
diversified into new areas such as oil and
gas, having secured contracts from other
nuclear sites; and the area is now being
used as a base for international companies
such as Kongsberg Maritime and
Subsea 7 which have a track record of
servicing UK and international markets.
Businesses are well placed to take up
new challenges, according to Caithness
Chamber of Commerce, which delivers
key aspects of the area’s diversification
programme. “Our region has an exceptional
supply chain track record gained
from 50 years of servicing the Dounreay
nuclear facility which has proved to be
dynamic and innovative in the decommissioning
work,” says its CEO, Trudy
Morris. “These skills are transferable, as
is the high-quality safety driven, can-do
24/7 culture and attitude. You don’t get
an industry more regulated than nuclear
which means the business community
has proven track records in demanding
environments under rigorous health,
safety and environmental standards.”
CNSRP chair Sir Anthony concludes:
“We have enough time to look ahead
and decide what we need to do to bring
in resources from elsewhere and build
on what we already have here. The rundown
of nuclear activity is a big opportunity
— not a big disaster.”
COMMERCIAL REPORT: MEYGEN
Power to people has tide of support
A giant scheme for
underwater energy in the
Pentland Firth is Europe’s
largest tidal stream
project. Rick Wilson
examines the possibilities
here is surely a certain
irony to be found in the
super-ambitious underwater
energy scheme currently
getting underway in the
Pentland Firth – for while
it may be on the very outer edge of Europe,
it is also the continent’s largest-ever
tidal stream energy project.
The thumbs-up came from the Scottish
government four months ago after completion
of the statutory approval process
with the regulator Marine Scotland, and
the measure of the exercise’s scale was
summed up by its first phase generating
target of 86MW – or enough to power
42,000 homes, the equivalent of 40 per
cent of homes in the Highlands.
However, the site – in the Inner Sound
of the Pentland Firth off the north coast
of Caithness – could eventually boast 400
turbines and yield no less than 398MW to
make it the first commercial deployment
of tidal turbines in Scottish waters.
The Inner Sound was assessed as the
best site because of its maximum current
speeds of five metres per second, suitable
water depth and good access to the grid.
The company behind the giant project is
Scottish-registered MeyGen – 100 per cent
owned by Atlantis Resources Ltd – which
has agreed a 25-year lease with the Crown
Estate for an area encompassing about 1.4
square miles of fast-flowing water between
the island of Stroma and the mainland.
It sounds promising for residents, but
what of the area’s delicate wildlife? Ed
Rollings, MeyGen’s environment and
consents manager, comments: “We are
committed to ensuring that the exploitation
of this clean, predictable and sustainable
energy resource is done in a manner
that has no detrimental effect on the
species and habitats in the area.”
But perhaps the biggest environmental
plus-point of tidal power is its invisibility,
revealing as it does nothing that might
upset view-conscious residents or even a
certain Mr Trump; especially as power delivery
factors are comparable with wind.
“Yes, it was quite amusing when we
did a before-and-after photo visual of
Dan Pearson, MeyGen CEO,
says that local people are
‘thrilled’ with the project
the scheme,” recalls Dan Person, CEO
of MeyGen, “and there was no difference!
Clearly, this could be a very elegant
solution to many of our power supply
challenges.”
Happily too, there is little or no dissent
locally. “Most local people are thrilled
that it’s happening, bringing the prospect
of jobs, and we are equally thrilled about
how they offer a highly capable and intelligent
potential workforce, thoroughly
experienced in building nuclear equipment.
“When I took my first open days
the questions included some detailed
engineering points. It was quite refreshing,
to be talking to such an on-the-ball
community.”
This step forward for Scotland’s marine
renewable energy industry will begin with
a 9MW demonstration project of up to
six 73ft-tall turbines, whose performance
should prove to major investors like the
UK and Scottish governments that starting
the major construction programme
– expected to take place on a phased basis
until 2020 – will be a worthwhile exercise.
Mr Pearson adds: “The UK and
Scottish governments have been very
consistent in their support. They have
not wavered. Through the hardest recession
that we’ve seen they have stood by
this project. Weaker governments might
just have let it go, but their faith has been
quite outstanding.
“While there is still much work to be
done, the prospects for delivering the first
tidal energy array in the Pentland Firth,
thereby establishing a stepping stone to
commercialising tidal energy, are very
promising”.
It is hoped that construction, assembly
and pre-commissioning of the offshore
works (mainly turbines) will take place
in Scrabster Harbour which – subject to
commercial terms being agreed – will be
used as the marshalling yard.