The Future of Industry Depends on Increasing our Exports

SMS Team / July 6, 2017


The Brexit negotiations are just beginning and after the general election we will see how that pans out. What is clear is that international trade is going to be the key topic for the next 2 years. As members of the EU, UK companies did not have to deal with many of the complexities of international trade as the EU law and regulations enabled them to trade freely. But we live in changing times.

A recent report by Centre of Cities reported that Aberdeen was the Scottish city with the most trade to the EU; this should not be a surprise given our title of "The Oil Capital of Europe". The recent Oil and Gas UK Business Outlook  predicted that in 2017, 43% of the oil and gas industry supply chain turnover will be from exports. Having travelled to many countries in my working life, I can testify that in nearly every oil producing country you will find an Aberdonian selling their goods or plying his/her trade. If we go further back in time we have had trading links with our Nordic neighbours as far back as the Viking age. In the North East of Scotland, we are a region of exporters.

And yet when the OGA recently published its Supply Chain Strategy, it reported that only 3.7% of the global oil and gas supply chain market is provided by UK companies. They have a target to double this to 7.4% and thereby anchoring our companies here in the UK and the North East of Scotland. This will not be easy as there is an increasing level of protectionism being adopted by national governments. But given the expertise in Aberdeen and its vast number of innovative companies, new international markets will open up.

Investment in economic development and infrastructure will enable Aberdeen companies to develop new products and access new markets quicker. The development of Nigg Bay Harbour and Aberdeen's airport expansion will hopefully attract new international routes. Whilst The Oil and Gas Technology Centre will provide much needed funding to companies for innovation. Our two world class universities are vital in increasing our exports as both Robert Gordons University and Aberdeen University attract some of the brightest talent from around the world. Talent which can develop new technology and help local companies access international markets. By developing the technology and skills here in the North Sea then new markets will open up for our innovative supply chain.

Since the 2014 downturn oil and gas supply chain companies have entered into new international markets as the UKCS activity decreased. But there are still many barriers to accessing international markets for many companies, in particular SMEs. Resources, finance, regulations and knowledge are all barriers to international trade but initiatives such as Exporting is Great are providing vital support to exporters. But more needs to be done. The UK Governments Industrial Strategy Green paper has been out for consultation and among its key topics were international trade, innovation and regional clusters. All of which we in Aberdeen have a history of doing.

International markets are changing at a rapid pace and it is vital that oil and gas companies of all sizes are able to get the support they need to grow our economy and anchor our vital supply chain in the North East of Scotland. The future of our industry depends on increasing our exports.





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