'Independence can aid Scottish business, boost economic recovery'

No-one seems to be cheering the official end of the economic recession last week, given a widespread understanding that Scotland must still reverse negative trends well recognised before the 2008 crunch turned boom to bust.

Among the worst of these is a lack of available venture capital to support growing businesses in Scotland, which is a much older problem than the long recession. The downturn worsened the reality of increasingly poor returns for investors, who in turn had an increasingly short-term outlook.

The status quo goes a long way towards explaining Scotland's shortage of business HQs and conglomerates.

Future Potential

Short-termism is a consequence of shareholder attitudes and the general economic greed culture in the UK. It seems endemic across all sectors of the financial services. It has replaced union militancy as the "British Disease" and is, if anything, more damaging because it limits our future potential.

Sadly, most Venture Capitalists (VCs) here also tend to be reactive rather than proactive. Unlike their US counterparts, who were the catalysts for building up Silicon Valley, our VCs rely primarily on business submitting applications for funding rather than digging around for opportunities. Consequently a lot of opportunities get missed.

Industrial Policy

How to cure this? Well, Scottish independence would provide the leverage to do a number of simple things as well as develop a real industrial policy.

We could also raise the profile of Scottish business issues by ensuring the media – especially TV – shout a little more loudly about business issues, by making it part of the remit of Scottish broadcasters. If we could persuade BBC Scotland and STV to talk a little less about fitbah and more about what Scottish businesses are up to and what our universities are working on, it might raise more interest in local investing.

Stock Exchange

Post independence, Scotland will also be able to set up its own stock exchange for companies to raise money locally and provide a focal point for Scottish industry. It would also enable Scottish pension funds to invest in Scottish companies. Small countries like Norway have benefited hugely from having their own stock exchange.

Similarly, a Scottish Central Bank would provide the "gravitas" and support needed to develop a more vibrant Scottish economic and financial sector able to support Scottish companies at all stages of development.

(This article was originally published in the Sunday Herald, October 28th 2012)