IT was more than 20 years ago that the Americans and Japanese poured investment into a new Scottish industry that helped transform a nation in decline.
A wave of so-called 'screwdriver' plants assembling computers and other electronic devices spre
ad across the central belt, soaking up Scotland's plentiful supply of low-wage workers who would normally have drifted into the shipyards, coalfields and engineering factories.
The arrival of semiconductor, or microchip, plants created what became known as Silicon Glen and put Scotland on the global electronics map.
Many of those first generation plants have gone, their owners switching production to cheaper locations such as Slovakia, the Czech Republic and elsewhere in central and eastern Europe.
But the electronics revolution has left an indelible mark on the Scottish economy, nowadays operating predominantly in higher-value functions as the industry has matured and faced up to international competition through a greater emphasis on research and on support services that make it essential to be close to the customer.
The move up the value chain has been good for Scotland and a necessary one for the sector to survive, says Sergio Tansini, chairman of the trade body Electronics Scotland, which holds its annual conference this week in what he says is a "robust" mood.
Nothwithstanding the closure of television plant JVC and the lack of clarity lingering at former Motorola plant Freescale, both in East Kilbride, its members meet at a relatively quiet time for the sector, though the ubiquitous burden of high energy and labour costs and funding difficulties hangs over them.
Tansini has moved the conference from Gleneagles to the Dunblane Hydro as a subtle indication that the sector needs to cut its cloth according to the current climate and he expects the cost pressures bearing down on members to be a key feature of debate throughout the day.
"The only way we can compete is by being more sophisticated in what we do," he says, pointing to the company he manages, Total Repair Solutions, as an example of how businesses in the sector are changing to stay ahead. Where once it was focused entirely on repairing mobile phones, it is now making a significant part of its revenue from a range of professional services and technical support.
The number of white collar jobs has risen substantially, as has the number of immigrants who are undertaking skilled jobs that are increasingly difficult to fill from among the domestic pool of labour. Renfrewshire-based TRS, part of mobile phone tycoon Richard Emanuel's telecoms empire, employs 180 mainly eastern Europeans among a workforce of 600.
The pattern of broadening the proposition is being repeated across the entire electronics sector as companies respond to changing consumer demand and how to manage the relationship they have with the big ticket manufacturers on issues such as cost reduction and improving delivery times.
The sector is certainly a different beast to the one created by the likes of IBM, Compaq and NEC. IBM planted roots in the 1950s, the bulk of the others in the 1980s as an answer to the rapid decline of heavy industry.
They provided jobs on a large scale, but times have changed and much of that work switched overseas. At its peak in the early 1990s, electronics employed about 70,000, a figure reduced to 57,000 largely by the flight of assembly work to low-cost eastern European locations.
Turnover among those multinationals still manufacturing in Scotland has fallen by 3% in the past three years but is still worth £1.63bn, and they remain a significant contributor to exports.
But as their presence diminished, it was hoped that smaller homegrown companies would take up some of the slack and firms such as Vision and Wolfson emerged either as university spin-offs or as by-products of the multinational invasion. Some were sold; others went to the stock market.
But the problem of creating companies of scale remains unresolved. "We need to grow the smaller companies into mid-range companies, but it is one of our weaknesses," admits Tansini. "How do you get from 50 employees to 200 or 300? It is one of our aims."
On a positive note, research and development is starting to grow again, with chip design up 29% in a year and other areas of product development showing signs of growth.
The current generation of electronics firms in Scotland is also prompting some re-thinking of the way the sector is promoted. Tansini has asked the 70 company members of his association to come up with an alternative to Silicon Glen, which he believes has had its day. "Silicon Glen is out of date," he says, arguing that it conjures up the wrong perceptions in the public's mind. "It brings up memories of Motorola pulling out of Bathgate, of IBM (moving out of PCs] and NEC, NCR (which also closed or slimmed down their operations].
"That was Silicon Glen. It was primarily an offshoot of American companies which settled in Scotland as a cheap entry into Europe. It was good at the time, but the time has gone."
Trouble is, he has no alternative to what has become an internationally recognised brand for the Scottish electronics industry. It may not accurately describe what now takes place in Scotland – there are only a handful of plants using silicon – but the same argument could be made for Silicon Valley, home to Google, Yahoo and Oracle, which could more accurately be renamed Software Valley.
"It's a good point," concedes Tansini, throwing up his hands, Italian-style, adding that many of the semiconductor plants in California moved to Texas.
"But for us it is more about perception and Silicon Glen has negative connotations. It is associated with low-cost screwdriver plants and closures. We are opening the debate."
Creating a new identity forms part of the trade body's agenda alongside the need to attract more students into engineering, encouraging university research to be more closely aligned with emerging market demands, and how companies can be more agile at sales and marketing.
Labour costs are an issue and pressure to raise the minimum wage is a worry. "It is killing us," says Tansini, explaining how it pushes rates further up the wage ladder at a time when the UK's competitiveness is being severely tested.
However, wage rates in eastern Europe, particularly in Poland and the Czech Republic, are rising, in some cases close to those in Portugal and even Italy, making them less attractive alternatives. Now the problem is energy costs. "I don't want to whinge, but every time you make some improvement, find some efficiency somewhere, it is absorbed by rises in fixed costs."
Tansini took on the chairmanship of Electronics Scotland two years ago when he saw it running into trouble. As the chief executive of a company in the repair sector, he seemed the natural choice to fix it. "I hate things that are not working," he says. The fortunes of Electronics Scotland had a tendency to run parallel with the sector, and with the sector in a rough patch, the organisation found itself struggling.
The top and bottom of all this was a reduction in the board from half a dozen directors to just three and a renewed move to find ways of combining with some of the other bodies that represent the sector. A long-running attempt to merge with Intellect, the equivalent body in England, collapsed when the latter got concerned over Electronics Scotland's finances. That proved misplaced, but the merger is on ice.
Tansini, who arrived in Scotland at the turn of the decade and has been converted to the British way of life, believes the trade body has a vital role to play in pressing its case with Government and maintaining a mutually beneficial role for the sector's still-thriving players.
He began his own affair with the sector in his native Italy, working for a semiconductor distributor in Milan. He moved to the UK to work for Unisys and ICL-Fujitsu and in the dotcom boom joined the fledgling Scottish firm Indigovision, which he helped take to the stock market. But there was a boardroom fall-out and Tansini left.
He took a call from Scottish mobile phones tycoon Richard Emanuel about a new repair facility he was setting up in Clydebank and the Italian was soon heading the operation, which is now located in bigger premises on the fringe of Glasgow Airport.
Tansini, now 52, played football for Inter Milan under-16s back home, and while the Frankie Dettori-style accent is an obvious giveaway of his roots, he's now wedded to his Scottish lifestyle.
"I love it here. I have days when I am on the M8 in the horizontal rain wondering what the hell I am doing here, but I love the British way of life."
As most Britons would hanker for a piece of Italy, this may surprise a lot of people. "They have never lived it," he says. "Doing business in Italy is more provincial and more difficult."
