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Nicola Sturgeon unveils £78m business fund Nicola Sturgeon says London is not an 'economic threat'
(about 2 hours later)
The Scottish government has announced the details of a £78m fund which it says will help Scottish businesses to develop almost 1,000 new inventions, products and services. First Minister Nicola Sturgeon has criticised previous SNP governments for viewing London as a threat to Scotland's economy.
First Minister Nicola Sturgeon said the move was a step towards Scotland becoming an "innovation nation". Ms Sturgeon has now pledged to engage more closely with the city to find business opportunities for Scotland.
The fund will provide financial support and specialist advice to businesses. The commitment came as Ms Sturgeon announced a £78m innovation fund to encourage businesses.
It comes as a report suggested the economy is continuing to recover from the slowdown at the start of the year. The money is for the businesses to come up with 1,000 new commercial products.
Ms Sturgeon said the fund, which will be available from now until 2018, was the key step in the Scottish government's economic strategy. It is hoped the products will improve the wellbeing of the people of Scotland and around the world.
The fund is also expected to allow an extra 1,200 businesses to work directly with universities. The announcement came on the back of plans unveiled earlier this month for the Scottish government to establish three new innovation and investment hubs in London, Brussels and Dublin.
'New products' In a speech to the Scottish Council for Development & Industry (SCDI), Ms Sturgeon said the Scottish government had "for too long seen London as a threat".
Ms Sturgeon confirmed details of the fund at an event for 80 business leaders. Her predecessor Alex Salmond described London as "the dark star of the economy, inexorably sucking in resources, people and energy" during the independence referendum campaign.
She said: "In total, we expect to see businesses develop 1,000 commercial products which are new to their firm - or perhaps even more importantly, completely new to the market place as a whole. 'Moderate growth'
"Those new products will differ in terms of their importance and their impact - but our overall intention is clear. SCDI chief executive Ross Martin said there had been a noticeable shift in the Scottish government's attitude to business from "dour" to "do-er" since Ms Sturgeon took over as first minister.
"We want to support ambitious and innovative companies in every corner of Scotland. And we want those companies to develop and profit from new products, which improve the wellbeing of individuals around the world." Ms Sturgeon said: "This is probably a self-criticism of the government as opposed to trying to suggest it has been a feature of businesses, but I think for too long we have seen London as a threat.
The Scottish government has dedicated £31m of the funding available to it through the European Regional Development Fund, with the remainder of the £78m total coming from Scotland's enterprise agencies. "We've seen London almost, in economic terms, as a rival. Of course we will want to compete and be competitive, but actually I think there is more in it for us to see London as an opportunity.
Meanwhile, the latest Bank of Scotland business monitor said new business levels picked up strongly over the summer. "It's a major international centre. Businesses and companies will seek to locate and to invest in London, but as they expand they might see Scotland as good value place to expand into.
"So, particularly with London, it is about seeing it as an opportunity and not just as a rival in terms of economic investment."
The innovation fund comes as a report suggested the economy was continuing to recover from the slowdown at the start of the year.
The latest Bank of Scotland business monitor said new business levels picked up strongly over the summer.
And expectations for the coming months continue to point towards moderate growth for the remainder of the year.And expectations for the coming months continue to point towards moderate growth for the remainder of the year.
In the three months to August, 36% of firms surveyed increased turnover, while 36% experienced static turnover.In the three months to August, 36% of firms surveyed increased turnover, while 36% experienced static turnover.
Marginal improvement The remaining 28% experienced a decrease, giving a net balance of +8%, marginally up from the +7% during the previous quarter but down from the +30% in the same quarter a year ago.
The remaining 28% experienced a decrease, giving a net balance of +8%, marginally up from the +7% of the previous quarter but down from the +30% of the same quarter one year ago.
Turnover for firms in the production sector improved on the previous quarter but was significantly down on the same period in 2014, while the services sector showed a decline on the previous three months.
Firms reported a marginal improvement in volumes of repeat business in the latest three months.
However, trends in the volume of new business are much better with an overall net balance of +17% compared to +3% of the previous quarter and close to the +23% of the same quarter one year ago.
Businesses remain optimistic for the next six months, with 34% expecting turnover to increase against 19% who predict a decrease. A further 47% expect it to be static.
Bank of Scotland chief economist Donald MacRae said: "The Scottish economy slowed at the start of 2015 but is expected to return to moderate growth in summer and autumn.
"Expectations remain positive and suggest that current growth rates will be maintained in the third quarter of the year."