The idea of a public sector development agency charged with spurring Scotland�s economic growth and entrepreneurial spirit began 42 years ago amid Harold Wilson�s enthusiasm for harnessing the �white heat of technology�.
The idea of a public sector development agency charged with spurring Scotland's economic growth and entrepreneurial spirit began 42 years ago amid Harold Wilson's enthusiasm for harnessing the "white heat of technology".
Since then, the various agencies which evolved into Scottish Enterprise have been reshaped, reformed, and remoulded by successive administrations to suit their different ideological agendas.
In 1965, the Highlands and Islands Development Board became a pioneering model of regional economic development under the then Scottish Secretary of State, Willie Ross. It was followed 10 years later by the Scottish Development Agency, another Labour creation, though it was formed against a backdrop of rising support for nationalism.
From the off, the SDA was branded unwieldy. It took responsibility for Scotland's vast sprawl of industrial estates - some 25 million sq ft of factory space - as well as taking over rural development and land clearance duties from the Scottish Office and local authorities.
More importantly, the agency was told to co-ordinate industrial and urban development schemes and inward investment, and enjoyed an unprecedented autonomy from central government.
The Tories attacked this as a "creeping tool of socialism" and there was criticism that the SDA was responsible for propping up the "lame ducks" of industry.
After Margaret Thatcher's election victory of 1979, the SDA's remit was radically altered to suit her programme of free-market reforms. It established a more commercial culture, moving away from providing direct funding to industry to underwriting private investment.
Commitments to safeguarding employment and supporting "industrial democracy" in invested companies were removed and the government's considerable portfolio of factories was eventually sold off.
One of the SDA's most significant achievements of this era drew on the previous work of the agency by establishing Locate in Scotland, the international investment arm that has survived to this day.
Among the companies it attracted was NEC Corporation, which formed NEC Semiconductors (UK) Ltd at Livingston in 1981. It grew to become one of the largest plants in Scotland and at its peak, in 2001, it employed 1600 people.
Chunghwa Picture Tubes was also hailed as a success when it was lured to Scotland by the government and Locate in Scotland. In November 1995, it announced plans to build a £260m plant in Mossend, Lanarkshire.
During the 1980s, the SDA improved its standing in the business community and began to be seen as a prerequisite for private sector investment. But accusations that the SDA was overly centralised began to bite. By 1991, it had been replaced by Scottish Enterprise as part of an overhaul that saw the creation of 12 Local Enterprise Companies designed to regenerate the national economy. The new body also also took training under its remit. Also, the HIDB became Highlands and Islands Enterprise Allegations of mismanagement and conflicts of interest continually dogged the devolved LECs from their inception and led to a Commons Scottish committee inquiry in 1994. The new regional focus of Scottish Enterprise has also seen bitter political infighting between local authorities and LECs over spending priorities.
Scottish Enterprise has also been hit hard by the collapse of Silicon Glen companies. They include the NEC Semiconductors plant, which closed in March 2002 amid a declining electronics industry. Chunghwa was also a short-lived enterprise. The firm closed in 2002, only five years after it had opened.
Motorola, Hyundai, Lite-on, Compaq and Hewlett-Packard, meanwhile, have all either closed factories or shed jobs after injections of government money.
Key players
- Jack Perry, Scottish Enterprise's chief executive, was paid £219,000 after receiving a pay rise of 15.3%, according to the latest annual accounts issued by the agency.
- Lena Wilson, the agency's chief operating officer and second in command, was paid £179,000 after receiving a pay rise of 26.9%.
- Iain Carmichael, the former finance director who played a key role in the mismanagement of its taxpayer-funded £500m budget in 2005/6, retired with a golden goodbye worth £539,105.
