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Games changer?

It was billed as the big chance for Scottish business to take advantage of hosting the 2014 Commonwealth Games, a springboard to capitalising on sporting and cultural events around the world.

BusinessClub Scotland boss Linda McDowall of Scottish Enterprise Photograph: Mark Mainz
BusinessClub Scotland boss Linda McDowall of Scottish Enterprise Photograph: Mark Mainz

But on the eve of the Games, five years after the fanfare surrounding the launch of BusinessClub Scotland, the business support agency tasked with implementing the vision is strangely reticent on the success of the programme - even to the extent of saying whether any contracts for events outside the UK have been won.

The idea behind the club was to follow the example of Australia, which, in the run-up to the 2000 Olympic Games in Sydney, launched a similar body with the aim of helping Australian businesses bid for contracts for the Sydney Olympics, the 2006 Commonwealth Games in Melbourne and global sporting events.

The theory was that, having gained experience of tendering for contracts and expertise in event management in their home country, Australian companies would be in a stronger position to bid for work at sporting events around the world.

In its first seven years, Business Club Australia helped Australian firms secure AUS$1.7 billion (about £930 million) of contracts from overseas sporting events. Its success led to similar agencies being set up in India, Canada and New Zealand. A Manchester Business Club was set up ahead of the 2002 Commonwealth Games in the city and a British Business Club was created before the London 2012 Olympics.

At the launch of BusinessClub Scotland in 2009, First Minister Alex Salmond told business leaders that the group's Australian counterpart had helped 60 companies gain more than 70 contracts valued at the equivalent of £100m for the 2008 Beijing Olympics, £150m of exports to Doha for the 2006 Asian Games and £235m in exports to the 2010 Delhi Commonwealth Games.

Creating a business club in Scotland would, according to Salmond, help Scottish firms "get in the running for the millions of pounds spent on major events every year in Scotland" and would "open up" more economic opportunities for small and medium-sized businesses.

"The experience gained from Scottish events will allow our businesses to start competing at an international level for global events contracts, generating further revenue to strengthen the economy and provide a lasting economic legacy," he said.

Unlike the Australian business club, the Scottish version aimed to support companies bid for contracts not only for international sporting events but also cultural events, such as arts festivals. In its first year, the club was jointly run by the Scottish Council for Development and Industry and Event Scotland. Responsibility was transferred to Scottish Enterprise in 2010.

So far more than 4000 companies have registered with the Scotland-wide club, which is free to join over the internet. After signing up, companies are informed about the latest contract opportunities and networking events. Member companies are also invited to attend seminars on business topics such as communications and marketing.

Since the club's launch, around 120 Scottish companies went on to benefit from contracts for the London 2012 Olympics. But if all had gone according to plan, Scots firms might also have gained work from the 2018 Commonwealth Games in Australia's Gold Coast City, the 2016 Olympics in Rio and the 2018 Winter Olympics in South Korea. International sporting events held this year that Scottish firms could have tendered for include the Asian Games in South Korea, the Winter Olympics in Sochi, Russia and Youth Olympics being held in China.

Last week BusinessClub Scotland boss Linda McDowall told the Sunday Herald that she was not aware of a single Scottish company securing contracts from any of these international sporting events. McDowall, Scottish Enterprise's senior director for business networks and communications, said a "Team Scotland approach" to exploiting the business opportunities of the Glasgow Commonwealth Games had led Scottish companies to secure 71% of the 660 so-called "tier 1" contracts handed out by the event. This equates to a respectable £287m of business going to Scottish companies out of a total of £401m worth of contracts that were available.

Of the 660 contracts put out to tender, 455 were won by Scottish firms, of which 171 contracts were won by Glasgow-based firms.

McDowall added that she was particularly pleased that 12 Scottish companies had successfully bid for contracts for the Ryder Cup, which will be held at Gleneagles in September.

This will be the second time that Scotland will host the golf team tournament in the Ryder Cup's history. Contracts won by Scottish companies for this event include work for security, construction, cleaning and waste management services.

Scottish Enterprise's main role is to focus on maximising the potential economic impact from these events via trade, investment and company growth, she said.

McDowall also pointed to a major business conference to be held on the eve of the Commonwealth Games, to which more than 200 government and business leaders from the UK and around the Commonwealth have been invited.

Asked why BusinessClub Scotland had not been as successful on the international stage as Business Club Australia, McDowall said that many small to medium-sized companies in Scotland had "capacity issues" that are now being addressed as a result of the experience gained from bidding for contracts for the Glasgow Games. There is also a need for Scotland to have a more internationalist approach if it wants to boost growth through trade.

Work that had gone into securing contracts for the 2014 Commonwealth Games would provide the country's business community with a "fantastic legacy" in future years, she said.

McDowall said that a stated objective of the club, to build supply chain networks, had been met during construction work carried out for the Glasgow Games. The £90m contract awarded to build the National Indoor Sports Arena and the Sir Chris Hoy Velodrome led to around £68m worth of work for sub-contractors.

But David Watt, a former BusinessClub Scotland director and current executive director of the Institute of Directors Scotland, told the Sunday Herald that the fact that Scotland has not managed over the last five years to secure any business from international sporting events outside the UK was a "massive missed opportunity".

Watt, who has also written books on sports event management and administration, said the main reason for the failure to follow Australia's example and gain significant work on the international scene was a failure of the private and public sectors in Scotland to work closely enough together.

"There has been good business around the [Glasgow] Games but there could have been more," he said. "We had the chance to gain more work and an international reputation. There is now a need to engage the private sector."

A more "free-standing" business club with more management representation from the private sector would be a step in the right direction, he said. The present management structure is largely based around the state-funded Scottish Enterprise.

Examples of Scotland's growing expertise in the field include the fact that a number of Scottish universities now offer courses in events and festival management.

Scotland had enough expertise in some areas to bid successfully for contracts from international sporting events, Watt said. The challenge is to maximise the potential of marketing opportunities. A good example, he said, was the work of the Scottish firms who had designed the baton being used during the Queen's Baton Relay, as well as the medals that will be handed out to winning athletes.

On Friday, Angus MacDonald, the SNP MSP for Falkirk East, lodged a parliamentary question asking the Scottish Government for an update on the activities of BusinessClub Scotland. The written question asks what progress has been made by the club in helping companies to gain contracts for major events.

MacDonald also asks the government to reveal the outcome of a joint BCS/Scottish Enterprise study conducted in 2012 which aimed to identify the barriers that are holding back SMEs in terms of supplying goods and services to major events.

The study was supposed to have been published in early 2013, but this week Scottish Enterprise did not respond to a request from the Sunday Herald for a copy of the report.

Responding to a previous parliamentary question tabled by MacDonald in 2012, enterprise minister Fergus Ewing replied that the report on barriers to SME supply would "influence BCS activities going forward".

Ewing is expected to reply to MacDonald's most recent parliamentary question next month.

A spokesman for Glasgow City Council said that the 2014 Commonwealth Games have, in general, been "tremendously beneficial" for ­Glasgow-based firms and that the number of contracts awarded to Scottish firms outside Glasgow show that the economic legacy of the Games would be felt throughout the country.

A successful Games for Glasgow will create a halo effect for all participants, and will further raise Glasgow's economic ascendency. Nevertheless there are legitimate questions about why a scheme that was proclaimed as an example for business engagement with set-piece sporting spectaculars should be obscured by bureaucratic clouds rather than serving as a beacon for the future.

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