What's wrong with Scottish firms? Local sourcing in electronics

McCalman, James (1987) What's wrong with Scottish firms? Local sourcing in electronics. Quarterly Economic Commentary, 12 (3). pp. 62-69. ISSN 0306-7866

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Abstract

Given the importance of the electronics industry in Scotland this article sets out to analyse one of the presumed benefits of attracting foreign electronics firms to set up manufacturing facilities other than the direct employment effects. It deals with the sourcing of material inputs by foreign firms in the Scottish economy in an attempt to determine the level of material inputs purchased from indigenous electronics suppliers. The electronics industry in Scotland has for several years been actively promoted by government agencies and the press as one of the major industrial success stories during a period of industrial stagnation and decline in the more traditional manufacturing areas of the Scottish economy. The concept of "Silicon Glen" is an attractive one which views Scotland as being at the forefront of electronics manufacture providing high levels of employment leading to further attraction of inward investment. The electronics industry in Scotland in 1985 employed 43,900 people in more than 300 companies (22% under foreign ownership, 42% English and 36% Scottish). However, previous research has shown that the largest employers and fastest growing firms are externally owned, and that their attraction to Scotland was heavily influenced by regional incentive schemes.

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