Scottish Enterprise Miss a Trick

I spotted a story in Monday’s Digital Media Wire:

Google to Choose Dublin as European Headquarters, Ireland Says

Dublin—Irish development officials are saying that U.S. Internet search engine giant Google is likely to establish its European headquarters in Dublin. The country’s Investment and Development Agency (IDA) said that it is in the final stages of negotiations with Google, which had also been considering Zurich as a base for its European operations. If Google does choose Dublin, it would be a coup for Ireland, which has been scrambling to replace hundreds of technology jobs lost over the last two years. “The (IDA) board is on the verge of a decision,” spokesman Colin Donlon said. Financial terms of the reported deal have not been disclosed.

If this is true, then it follows hard on eBay’s decision to open more offices there as Karlin Lillington noted recently. Good for Ireland; I’m truly happy for them. My concern is what Scottish Enterprise and it’s sister Scottish Development International have been up to while all this has been going on.

First, some history: throughout the 80s and early 90s, SDI and it’s predecessors did a very good job of attracting high-profile, high-tech companies to locate businesses in Scotland: IBM, HP, Motorola, and Sun being just a few examples. Of these, only Sun still has a notable presence (it’s facility at Linlithgow is the only thing remotely Silicon Valley-esque about Silicon Glen). The agency was slated when Motorola, NEC, IBM, Compaq, and others all shut down or drastically reduced their facilities (mostly manufacturing, so the economic reasons should be obvious). The worst was the very high-profile case of Hyundai, who started working on a semiconductor fab plant at Dunfermline, only to stop after a couple of months. It lay empty for about 5 years (I’m not sure what it is now; a shopping centre, or something).

So, because of all the flak it took for this, Scottish Enterprise embarked on a new strategy: smart, successful Scotland. Which is fundamentally fine, though the agency is currently in turmoil and still being attacked on all sides by the media. It also seems to have turned its back on inward investment (luring foreign companies to Scotland)—which is a big mistake. Yes, Scotland needs successful, native companies in order to generate wealth for the country and its inhabitants (not just in high-tech, but that’s where I’ll focus). Wolfson and Rhetorical being two companies who are enjoying success (Wolfson will IPO on the full London market before the end of the year).

However, just as validly, SDI should be seeking to attract the same high-value jobs (not more manufacturing jobs; not that they’d come anyway) from foreign companies. That means software development and biotech. As such, attracting a Google development centre (if that’s what the Dublin plan is) to Scotland should have been the absolute priority for SDI (and if the Dublin site isn’t a development centre, then SDI should start on that sooner than right now!). Why? Because a pre-IPO Google site in Scotland would make its employees fairly wealthy (presumably). This of course, begins the virtuous circle of people getting rich from hard work, then having their own idea and going off with their wealth and talent and kicking off new businesses, which hopefully do the same thing; just as has happened in Silicon Valley and in Seattle.

This virtuous circle is what underpins the smart, successful Scotland strategy, but SE and SDI should be exploring every available avenue to kick start the processs. If the initial success comes from an American (or Japanese or Korean or Taiwanese) company… well, who really cares? The end result would justify the means.