Opportunities for Scottish electronics companies to win new business from foreign companies setting up subsidiaries in Scotland are limited, according to research by Strathclyde and Glasgow universities.
In some cases, suppliers are under pressure to open up plants abroad near to the subsidiary’s parent company to win orders.
The researchers surveyed 50 Scottish companies, half in electronics and half in oil and gas. The electronics companies exported less than 25% of their output, while over 50% of those in oil and gas exported a third or more of their output.
`In electronics there is not so much collaboration in R&D and innovation as in oil and gas and fewer chances for suppliers to piggy-back on foreign investors into other markets,’ said Philip Raines of Strathclyde University’s European Policies Research Centre.
A strong relationship between the supplier and the foreign investor is essential in winning new overseas business, said Raines. `These links do not yet exist in the Scottish electronics sector.’
Medium-sized electronics firms, particularly those providing higher-value products or services, are also finding it hard to meet demands from foreign investors.
`The business commitment asked for is a quantum leap beyond what some suppliers are able or prepared to do,’ said Raines. `Foreign investors for their part do not feel that Scottish suppliers come up to standard.’
Financing difficulties, and lack of export experience and information about potential markets, are just some of the difficulties which are holding back Scottish suppliers.
Failure to move abroad with foreign investors is not leading to any direct loss of business, said Raines, but it is putting a ceiling on growth.