SCOTLAND'S success in attracting the decision-making functions of multinational companies has helped it weather the economic downturn, according to new research.
While the country has struggled to retain or lure company headquarters, its ability to draw key operations, such as European bases, is seen as a significant change from the days when it was a location for low-value factory jobs.
So-called 'screwdr
iver' plants arrived from the US and the Far East during the electronics boom of the Eighties and Nineties but were vulnerable to closure or transfer. The new higher value positions are often more firmly rooted in their locations and have a vital role in a company's global operations.
The transition is such that Edinburgh (seventh), Glasgow (eighth) and Aberdeen (ninth) are ahead of other cities outside London and the south-east for hosting the largest number of operations with strategic, organisational, planning or decision-making roles.
Foreign investment into Edinburgh and Glasgow accounts for more than 2,000 jobs, of which three-quarters are in Glasgow city centre and have helped transform the city's working population.
According to the research by property company DTZ, productivity in these higher value projects is more than double that of domestic companies.
Glasgow added 12 decision-making operations to the city between 2003 and 2006 while Edinburgh introduced three. This year, Edinburgh has lost independently headquartered Scottish & Newcastle, but will retain the UK headquarters of the business under new owner Heineken.
"Fifteen between them in just over three years is a very good result," said Richard Marsh, senior economist at DTZ.
"Scotland has a deficit in headquarters, but it does well in terms of getting these decision-making functions. We don't have Barclays HQ, but we do have Barclays Wealth."
Marsh applauded the growth of Glasgow's International Financial Services District, which has become home to a number of these companies. According to the IFSD, almost 80,000 jobs have been located in the city since the mid-Nineties and it is well ahead of 2011 targets.
Barclays Wealth announced two years ago it would create 500 jobs in Glasgow. The city is also home to key functions such as JP Morgan's European Technology Centre and Resolution Asset Management.
The research reveals investment by overseas companies is now worth £41bn to the Scottish economy, almost a quarter of the total output of £177bn, and accounts for more than half of all economic growth. Foreign owned companies were responsible for 230,000 jobs in Scotland, one in seven or 13.4%, compared with one in 10 or 9.5% in 2002.
While there remains a common belief that inward investment has all but dried up, the research shows Scotland attracts more than twice as much as New York and is almost on a par with London.
