I never tire of making the case for more public investment in supporting Glasgow’s economic development, and I never miss an opportunity to celebrate a success. It was poor timing on my part to be traveling overseas on holiday when, at the end of June, the joint decision of the UK and Scottish Governments to create an Investment Zone in Glasgow was announced.
Glasgow was passed over in the allocation of Green Freeports, and ever since I have been suggesting that it would be sensible for the two governments to award Glasgow an Investment Zone instead. That is not simply because it is Glasgow’s turn; there are good reasons why Glasgow is one of the best city regions for testing out the Investment Zone policy. We don’t yet have the policy guidance on how these Zones will operate in Scotland. But we can draw some conclusions from the guidance the UK Government Treasury and the Department for Levelling Up, Housing & Communities have published for England on why Glasgow is best suited.
An Investment Zone awards the city region with £80 million of new resources spread over a 5-year period. That is similar in scale to the two-year £33m Innovation Accelerator Partnership Glasgow was awarded through the Department of Business and Trade and which the Glasgow City Region Partnership allocated to 11 science and technology research projects earlier in the year.
It is for the Glasgow City Region to propose the design of the Investment Zone and a choice can be made between using the £80m for direct spending on, say, research grants, skills programmes, land preparation, start-up support or on tax incentives such as enhanced capital allowances, NIC reliefs or business rates reductions. The Zone is expected to support cluster growth in one or possibly two of the national priority sectors named as digital and tech, green business, life sciences, advanced manufacturing and creative industries.
Within the designated Investment Zone, there can be up to three tax sites covering a maximum of 600 hectares where the tax incentives can be applied. It is also expected to have close links to universities or research institutes and to encourage investment in underutilized brownfield land.
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Glasgow already has all the ingredients to make this work. The Scottish Government has been working closely with the local authorities involved in the Glasgow City Region to plan the framework of the Clyde Mission as a mechanism for regenerating the River Clyde. The Clyde Mission area could be a good basis for the Investment Zone. The regional economic strategy includes all of the national priority sectors and the relationship with our research-intensive universities has already been positively tested through the Innovation Accelerator Partnership. Those 11 research projects include examples of all five of the priority sectors.
Most distinctively though, Glasgow has already been developing a set of three Innovation Districts: the Glasgow City Innovation District in the Merchant City around Strathclyde University, which is the most advanced; the Glasgow Riverside Innovation District combining the opportunities of Glasgow University’s Gilmorehill Campus expansion and the Queen Elizabeth University Hospital, and finally, the Advanced Manufacturing Innovation District led by Strathclyde University next to Glasgow Airport.
These districts are the very essence of cluster growth, aiming to attract a rich and sophisticated network of private companies to invest alongside the universities’ research teams. They would ideally be the basis for the three tax sites with their boundaries reviewed and possibly adjusted to include the necessary developable land. So, for example, the Glasgow City Innovation District might be expanded further into the East End to draw in land already being targeted for development by the Clyde Gateway team.
The Innovation Districts have been strongly championed by the universities and have been gathering both momentum and support. They were specifically spot-lighted in the Scottish Government’s recent Innovation Strategy, which also reignited the policy importance of cluster growth in economic development.
There has been much understandable criticism of Glasgow’s post-pandemic recovery, but the Investment Zone opportunity is to be welcomed and should consolidate the city region’s fast-emerging role in some of the UK’s most exciting new industries.
Stuart Patrick is CEO of Glasgow Chamber of Commerce
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