The importance of the financial and business services sector to the North economy has been identified in a report published by Highlands and Islands Enterprise (HIE). Produced by Ekos, the report highlights the scale and importance of the sector and gives baseline information which was previously unavailable.
Financial and business services are identified in the Government Economic Strategy for Scotland as one of six key sectors plus the university sector offering significant potential for future economic growth. This study forms a foundation on which to explore future challenges and opportunities in the sector across the Highlands and Islands.
The report highlights a clear emphasis on the business services element of the sector in the Highlands and Islands. The definition of business services includes management consulting, IT and computer related services, contact centres, HR and provision of personnel, security services, advertising and marketing while financial services includes banks and insurance companies.
Alison Wilson, head of financial and business services at HIE, said: “We have known for some time of the importance of the sector to the economy of the Highlands and Islands but this is the first time we have had the facts and figures at our disposal. From this, we will be able to focus our energies as an agency on the most appropriate methods of support to help the sector grow in the future.”
According to the report, employment in financial and business services in the Highlands and Islands now stands at 20,421, accounting for 10.2 per cent of total employment in the area. Between 2004 and 2007, employment in the sector increased by 17.1 per cent, almost three times the Scottish average of 6.3 per cent.
The study identified that the contact centre sector has enjoyed a long and successful track record in the Highlands and Islands and is renowned for the quality of its employees and their first class customer service skills. Many businesses that previously ‘off shored’ their contact centre activities to lower cost locations, are now finding that customer satisfaction and loyalty is increased if these are retained in the UK, and the Highlands and Islands is therefore well placed to take advantage of the opportunities this presents. An example of this is Talk Talk, with 145 advisors and 22 support staff based in the Outer Hebrides, having recently moved a number of jobs from overseas to Stornoway.
The ‘Contact Centres in Scotland – The 2008 Audit’, identified 30 contact centres in the Highlands and Islands and a total employment of around 3,400 – 1.4 per cent of the workforce in the Highlands and Islands and over 4 per cent of the Scottish workforce within contact centres.
Within the financial and business services sector, self employment in the area is 13.3 per cent compared with 9.8 per cent in the Scottish Enterprise area and 10.1 per cent across Scotland as a whole. The research has suggested that rural areas have a higher level of self-employment than urban areas.
Some barriers to development were identified by companies surveyed as part of the study, including a lack of financial investment in research and development and innovation as well as access to management and leadership development. However, opportunities for growth have also been identified – in developing the contact centre sector, homeworking business models, the green data centre marketplace, and further growth of knowledge-intensive business services such as ICT – all based on the key strengths of sector in the Highlands and Islands. These include the quality of the region’s workforce, high quality ICT infrastructure and relatively low business costs compared with Scotland and the UK.
The study combined official data with telephone surveys, consultations and case studies of business working within the area.