On September 16, Bank of Scotland hosted a virtual event to discuss the challenges and opportunities for Scottish firms as they deal with the economic impacts of the coronavirus.

The panel:

Colin King, Chief Executive Officer of medical diagnostics specialist Omega Diagnostics, which is part of the UK consortium working to develop and manufacture Covid-19 tests.

Stephen Lewis, Managing Director of office-focused commercial property developer HFD Group.

Tracy Black, Director of business organisation CBI Scotland.

Paul Gordon, Managing Director SME & Mid Corporates at Bank of Scotland.

Hosted by broadcast journalist Declan Curry

Key insights:

The current business environment

The Lloyds Bank Business Barometer shows that, while Scottish businesses are slightly more confident than they were a month ago, they still have the lowest levels of confidence in the UK.”

“The unique part of this crisis is its breadth and scale, it affects all sectors, firms of all sizes and it’s global. Unlike the financial services crisis, businesses don’t know when it’s going to end.” Tracy Black, Director of business organisation CBI Scotland.

Observations from HFD Group revealed that “Covid had super accelerated a number of existing trends in the property market, including flexible working, but we shouldn’t jump to the conclusion that this means the death of the office.”


Rising to the coronavirus challenge

Businesses have had to rethink their business models. Accelerating investment into sustainability, productivity and digitisation had been major trends in the last few months.

“We knew our technology was appropriate for both antibody and antigen testing, so wanted to build our capacity so we could flex wherever the demand was.

“The lead time for fully automated equipment was far too long, so we bought semi-automated equipment instead. That’s creating job opportunities too, which will continue until at least end of the year.” Colin King, Chief Executive Officer of medical diagnostics specialist Omega Diagnostics.

HFD’s offices have remained open as many of its tenants were essential businesses. While its construction division paused work on a development in Glasgow for three months, it had used that time to modify the building design to make it more environmentally sustainable.


Attendee-selected topic: Targeting growth opportunities in a low growth economic environment

“Scotland is in a fantastic position to benefit from a green recovery. We’re world leaders in wind and hydroelectric power and our universities have fantastic R&D departments. The financial services sector, creative industries, life sciences and food & drink also have huge potential.” Tracy Black, Director of business organisation CBI Scotland.


Poll 1: What would help business recovery most in Scotland?

Grants to retain existing/ take on new employees  -  31%

Tax breaks - 27%

Creation of regional growth funds  -   19%

More local (i.e. devolved) decision making by public bodies - 17%

A stronger network among the local business community   -    5%

Improved digital connectivity   -   2%

The CBI were unsurprised that the top answer related to skills: “We’re deeply concerned that [when furlough ends] many firms will be unable to retain experienced staff so they are asking the government to look at a replacement scheme.”

There is also a question over how the unemployed could be re-skilled to get them back into good jobs, which would need a collaborative approach involving government, unions and business.


Attendee-selected topic: Improving efficiencies and increasing productivity

Exporting is a key driver of productivity – there’s nothing like international competition for making companies more productive – and there is a need for more support for new exporters.

The CBI have also witnessed an issue around companies under utilising employees’ skills, as well as long term sick leave caused by mental health issues.

“We’ve had to find new ways to do office-based processes, like processing invoices and paying suppliers. We’ve had to automate but it’s been a positive outcome and were now looking at all our processes to automate as much as we can.” Stephen Lewis, Managing Director of HFD Group.


Attendee-selected topic: Access to debt finance

Banks had been very busy with requests over the last six months, from capital repayment holidays to help cash flow to debt financing facilities and government lending schemes.

From the CBI’s perspective “Scottish businesses have traditionally been quite reluctant to take on debt, but the way that the government-backed schemes have been supported in Scotland has opened their eyes and the message is to go out and learn about the available options.”

Omega Diagnostics held an oversubscribed £11m fundraiser during lockdown to invest in machinery to allow it to make the most of the Covid-19 opportunity, as well as develop new products that could use that extra capacity after the pandemic.

"We should applaud the speed and extent of government and bank support for business. Access to finance seems to be holding up.” Stephen Lewis, Managing Director of HFD Group.


Poll 2: Which of the following would you say is most relevant of your business?

We have more positive cash flow than six months ago - 29%

We’re more innovative than we were six months ago - 24%

We’re more resilient than we were six months ago - 16%

Our workforce is more productive than six months ago - 11%

None of the above - 18%

“Businesses seem to be using this crisis as a springboard to improve their business models.”


Attendee questions

  • Will the bank continue to lend once Covid-19 schemes are wound down? 

 Paul said: “Yes. In fact, our non Covid-related lending has already almost recovered to pre-Covid levels.”

  • Does the UK have the right tools to face the crisis head on?

 Colin said: “Agencies like Scottish Enterprise are working together with industry. We have the tools and desire to come out in a very strong position.”

  • Any tips for first time exporters?

Colin said there are lots of groups offering support, including Scottish Enterprise, Scottish Development International and DTI.

  • How can businesses support each other?

 Stephen said there are lots of networks to tap into, including Chambers of Commerce and the CBI.


Watch the event playback in full

The Big Conversation: Scotland event playback is available now as well as our COVID-19 Webcast Series – covering topics including; mental health, financing your business in challenging times, managing fraud risks, and much more.

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