Former leader of the SNP's Westminster group, Ian Blackford, writes for The Herald's Scotland's Defence Future series on why the billion pound orders for the Clyde and Rosyth shipyards must be the start of the story and not the end.
Shipbuilding in Scotland is facing a renaissance with orders for complex naval vessels, not just to equip our own navy, but as a consequence of the world leading excellence of the yards on the Clyde and Forth, substantial export opportunities.
The £10 billion order from Norway is just the start, with the potential for further orders from Denmark and Sweden to name but two potential markets.
BAE on the Clyde and Babcock at Rosyth have been investing in capability as well as human capital over the last few years as they modernise their production capabilities and substantially invest in human capital.
As advanced manufacturing evolves, our ship builders have been at the forefront of driving innovation that enhances productivity, shortens manufacturing timescales and allows Scotland to enhance its reputation as a leader in delivering complex vessels.
As an example, Babcock has invested £35 million in a digitally enabled hall, BAE have unvested £12m in an advanced shipbuilding academy.
Given the pipeline of orders, both BAE and Babcock are talking about recruiting up to 1000 apprentices each over the coming years whilst the opportunities for young people coming through further and higher education are substantial.
Read more in the series:
Current threats to our safety almost make the Cold War seem benign
Battle ready? Expert warns UK shrinking military could damage Starmer's war focus
Scotland ‘first in firing line’ if Russia attacks Nato
Strathclyde University is an institute of excellence when it comes to marine engineering and is world acclaimed for its offering of naval architecture teaching.
The sadness over the last few decades is that whilst we have world class courses and graduates, for too many of those graduation opportunities in Scotland have been limited. We can use that talent pool to offer careers in Scotland and allow those who can participate in our shipbuilding renaissance to be part of the economic and industrial regeneration of Scotland.
If we look at shipbuilding in Scotland, according to Scottish Government figures for 2022 there were 7,350 workers employed in the shipbuilding industry. Scotland today represents around 8% of UK manufacturing jobs, we represent around 15% of all UK shipbuilding jobs.
With BAE and Babcock investing in capabilities and increasing their workforce for the delivery of the new orders, the question is how bright could the future be for shipbuilding in Scotland, not just for military vessels but for civilian shipbuilding?
The industry that Scotland led the world in has changed massively post the deindustrialisation that saw much of our capacity for ship building wiped out. It is technology and the skill set of the workers that are significant factors that will drive success.
As a maritime nation we should look to the experiences of other European countries with significant exposure to ship building. For example nearly 16,000 workers are employed in the industry in Norway and 12,000 in the Netherlands.
Both these economies are regarded as high wage countries but investment in capabilities, a determination to excel in niche markets leaves both these countries with thriving commercial shipbuilding sectors.
We will have an enhanced talent pool of excellence in shipyard workers as a result of the investment in talent that BAE and Babcock are making. Our colleges and universities will be incentivised to deliver the workforce that can drive the industry forward for many decades.
The critical challenge is to whether we can leverage excellence in military vessel production into civilian vessels as an additional opportunity for the industry?
BAE and Babcock both have experience in commercial shipbuilding. We have of course a number of smaller shipbuilding companies around our coast with the most significant being Ferguson’s in Port Glasgow.
I have argued for an industrial council that could look holistically at areas of opportunity within Scotland but in the absence of this there is an opportunity for the Scottish Government to work with the industry to consider and facilitate a roadmap of building civilian ship building capabilities.
It is for government to facilitate, support and help to create the architecture that encourages companies to invest but we must not forgo what should be an opportunity to add depth and critical mass to our shipbuilding capabilities. It is not of course just about the ship builders themselves but it is about the supply chains that can accelerate the job opportunities for manufacturing in Scotland.
What could this mean for Ferguson’s? BAE has already subcontracted frigate work to Ferguson’s but clearly there is an opportunity with the expanding order book for Ferguson’s to do more in the near term.
Whilst the military work for Ferguson’s is welcome and helps support employment in the absence of new commercial orders, how do we create the circumstances for Ferguson’s to compete in the commercial sector?
What will be critical is the ability of the company to invest in its capabilities, skill set and offering. Nobody could expect the Scottish Government to invest substantial risk capital. There needs to be critical thinking as to partnerships, joint ventures or indeed divestment by the Government to an industrial buyer who could invest in taking Ferguson’s to the next level.
The immediate dividend of orders for military vessels from home and abroad is to secure the future of the BAE yards on the Clyde and for Babcock at Rosyth for decades to come.
This must not be the end of the story.
We must leverage our skill set and see the transfer of skills and capabilities we have for complex military vessels for commercial opportunities. In my earlier life as a financial analyst covering Dutch companies, I was familiar with Dutch shipbuilding. Their success was driven by delivering high-tech specialised vessels where they had a significant depth of know how.
Let us in Scotland continue to deliver leadership and success in military vessels but let us take this opportunity now to broaden and deepen our shipbuilding capabilities.
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