"Mendicant Missions": FDI Attraction Policy in Scotland 1945-1980



In the period after 1945, attraction of Foreign Direct Investment was one of the key strategies for the development and diversification of the Scottish economy.  This was highly successful, particularly in terms of attracting American manufacturing companies, though there was some European success also.  The paper will explore this success and outline the extent and sectoral distribution of FDI in Scotland in the period.  It will also examine some of the reasons for the very high numbers of American companies attracted to Scotland.  One organization key to the success of the programme to attract industrial investment was the Scottish Council (Development and Industry), which was a non-governmental body representing local authorities, industry, trade unions and other groups committed to the creation of a vibrant and diversified Scottish industrial sector.  They undertook extensive programmes of visits and marketing on behalf of Scottish industry and were able to provide a clear and focused proposition that moved beyond the more general incentives provided by UK government regional policy.  The paper explores a number of aspects of the operation of the SCDI, and focuses in particular on its role in shifting attention away from the USA towards Europe in the early 1970s.  This was an attempt to exploit the potential benefits of UK membership of the European Economic Community, and it entailed coordination of the many visits from local authorities and regional development authorities that German industrialists, in particular, had begun to find tiresome.  The benefits of a single-contact attraction policy were debated in the 1970s and resulted in a substantial shift in emphasis in the subsequent decade. The paper concludes by noting that, though there have been significant employment and industrial benefits from this long-term policy of FDI attraction, the extent to which the Scottish industrial economy has been transformed is open to debate.  Scotland therefore serves as a valuable laboratory in which to explore many of the issues around the benefits of FDI in developing countries.
The Business History Seminar has been made possible by financial support from the Erasmus Research Institute of Management (ERIM) and the Vereniging Trustfonds Erasmus Universiteit Rotterdam.
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