SCOTLAND has the skills and experience to ensure its financial services sector is much more than a safe haven for call centres and low value-added back office jobs in the future, one of the country's leading economists has declared.
In a paper produced for Strathclyde University's Fraser of Allander Institute economic think-tank, Jeremy Peat declares the future of the sector could be bright, in spite of the risk of further moves of legal headquarters to other parts of the UK or European Union.
Mr Peat, visiting professor at Strathclyde University's International Public Policy Institute, declares that maximising the potential of the financial services must continue to be a key public policy priority.
He highlights Scotland's fund management industry as one which could have an exciting future on a worldwide stage.
Contemplating the state of, and outlook for, Scotland's financial sector, he says: "Asset management in particular looks to be a relatively unsung Scottish success story, facing a very exciting global future, and one in which Scottish-based activities should be well placed to thrive. The future for the Scottish sector as a whole is much more than being a safe haven for call centres and low value-added back office jobs. Scotland has the skills and experience to be much more than that, and to achieve its potential as a major European FS (financial services) location. Making the most of this sector should continue to be a key priority for the years ahead."
Mr Peat concludes the Scottish financial sector, while hit from 2008 by the global recession stemming from the financial crisis, has proved resilient.
He says: "In sum, the financial services sector in Scotland has been an important and high-performing component of the Scottish economy, albeit one hit by the financially-induced global recession from 2008. The FS sector as a whole has, somewhat surprisingly, faced up successfully to the consequent pressures, which hit the banking sector in particular. Indeed, the negative impact of these changes on output and employment has been much less than anticipated, reflecting the diversity, resilience and competitiveness of the FS sector in Scotland."
And he is upbeat about the sector's prospects.
He says: "Certainly the future for Scotland's financial service sector could be bright, despite the uncertainties which continue to loom and the risk of further moves of de jure HQs to other parts of the UK or even the EU. Components of the sector have performed remarkably well in recent years, despite recession and banking sector turmoil.
"Scotland is a favoured location for footloose financial sector activities, including a variety of activities employing relatively high-skilled, high value-added and high-wage personnel. These activities and jobs are not inextricably linked to HQs. Given skill availability and a variety of other factors, Scotland can be a competitive location for such activities."
Mr Peat believes it is crucial that all of the main political parties show, by words and actions, that they recognise the importance of the financial sector to the economy.
He says: "The emphasis of all engaged in and with the FS sector should be on creating the environment in which Scotland continues to be an attractive environment, with government and all key parties showing, by words and deeds, that attracting and retaining such important jobs and activities is seen to be very clearly in the interests of Scotland as a whole."
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