Money talks
For such a small country, on the geographic edge of Europe, Scotland tells a particularly good story on the global financial stage. With over 350bn funds under management, we're currently ranked 6th in Europe and 15th in the world. But wait, there's more!
The financial sector, of course, has always played a significant role in Scotland's economy. Scotland's first bank, The Bank of Scotland was established in 1695 (just one year after the Bank of England). Investment trusts started here. And we were the first country to introduce overdrafts, as far back as 1728.
More recently, finance has proved to be one of the strongest growth sectors in the Scottish economy, averaging 5.4% pa since 1995 that's twice the rate of the rest of the economy and four times faster than anywhere else in the UK.
Telling it like it is
Today, the financial sector accounts for no less than 1 in 10 Scottish jobs, employing about 100,000 people directly and the same again in support services. It contributes 7% of Scottish gross domestic product and represents certainly Edinburgh's largest and most successful industry.
Putting it in context, Scotland is now one of the leading financial centres in Europe in the top 10 for banking, life and pensions business and investment management. Four of the major banks Royal Bank of Scotland Group, HBOS, Lloyds TSB Scotland and the Clydesdale Bank have their headquarters here. As do three of the UK's top five life assurance and pensions management businesses. Within this same area of business, Scotland's eight life assurance and pensions management groups control 15% of the UK market and 4.5% of Europe's. In terms of investment management, funds managed in Scotland grew by over 50% in the three years to end 2000 and now come to 350bn.
The last word
Impressive though this story is, it should be remembered that the financial sector is operating in a rapidly changing business environment. So we need to ensure that a) future business growth can be sustained, and b) we're in a good position to exploit new opportunities.
To facilitate this, Scottish Enterprise has developed an Action Plan for supporting the financial services sector, in conjunction with the Financial Services industry, the Scottish Executive and Scottish Financial Enterprise. Amongst other activities, this aims to promote the open exchange of information within the industry and to encourage innovation. Since people are the lifeblood of the sector, a number of important skills packages have also been developed, including e-business seminars and an MSc in IT and Financial Services.
Who knows, in a few years time we may able be able to say Scotland is one of the top five European financial centres!