Office workers by Alex Kotliarskyi
Conflicting data on job creation is no laughing matter, writes TERRY MURDEN
As every seasoned comedian will confirm, it’s not just good timing that makes a joke work, but the way you tell ’em. The same might be said about statistics, and in particular the data around foreign direct investment (FDI) and company creation which are not necessarily all they may seem.
New figures from the Department for International Trade showed 4,408 jobs were created in Scotland in 2021/22, sharply up on the previous 12 months (3,245) and the corresponding earlier period (2,946).
That’s the good news. The even better news is that data published last month by Scottish Development International (SDI) showed more than 7,500 planned real living wage jobs had been generated by inward investment in FY21/22. Within days, the Big Four accountant EY published data stating that more than 10,000 jobs were created via FDI in Scotland during 2021. Any more bids?
The timescales are not directly comparable – the first two are for the fiscal year, the latter the calendar year – but there is sufficient overlap to question why there is such a large difference, the EY figure being more than twice the DIT’s data.
A spokesman for the DIT told me EY “may use a different methodology”. The Scottish Government explained that, apart from the slightly different timeframe, the EY Attractiveness Survey also ooks at “investor sentiment”. A key factor, however, may be that the EY data includes investment from other parts of the UK (not yet foreign). All told, it’s a messy set of figures to be using in order to build and measure an economic strategy.
While the government and its cheerleaders boast about Scotland’s success, and not without some justification, other data questions the regular repetition about Scotland’s second place in the inward investment league table. A CEBR report in May showed that in 2021 it had slipped to fifth, its 92 projects well behind London with 492, the south east (163), the West Midlands (145) and North West England (139). Scotland saw a 24% fall on the previous year, the second biggest fall of any area of the UK.
Another report from EY published last month on the financial services sector showed Scotland had slipped from second to fourth behind London, the West Midlands and Northern Ireland.
Despite the constant references in press releases to “high quality jobs” there is a lack of any detail on what sort of salaries are being paid. Scottish Development International refers to 98% paying a real living wage (an annual salary of at least £19,305) which suggests the majority are at the lower end of the scale.
There are questions around other data concerning the growth of tech firms. According to research from Dealroom for the UK’s Digital Economy Council, there is a rising class of early-stage companies in Scotland that will go on to become future tech giants.
Its list of examples, published recently by the business media, proved to be a bit thin. It included the ready meals business Parsley Box, run by Chris van der Kuyl and Kevin Dorren. Not only is it not a tech business its value has plummeted from £84m on flotation in March 2021 to currently stand at £16m after a series of setbacks. It may be on the mend, but it will take a huge leap of faith to believe it will be a tech giant any time soon.
Another on the list is Encompass Corporation, which has an office in Glasgow but is headquartered in London and was set up by two guys in Sydney, Australia.
Featured as having raised more than £52m in the first quarter of this year was Pocket FM, referred to as an Edinburgh company but which appears to have been confused with a company by the same name based in India.
My late colleague Bill Jamieson regularly bemoaned the shortage of data on the Scottish economy and on this evidence there is a good deal of confusing and inaccurate information swilling around that allows politicians and others to pick and choose which they prefer to believe in order to argue their case.
Sometimes even the good news can be hard to chew on. Scottish Trade Minister Ivan McKee took some satisfaction from the FDI figures, stating: “These latest results are very encouraging and once again underline the strength of the inward investment offer in Scotland…” before adding… “in spite of the significant challenges posed by the pandemic and Brexit.”
This is as near as we get to a Scottish government minister admitting that despite all the name-calling and mud-throwing the SNP aims at the Brexiteers, there has been no negative impact on the flow of investment or jobs into the UK or Scotland. That is, if you believe the data.
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business