Financial services: Evaluation of Intervention with Clusters and Industries

The Evaluation of Intervention with Clusters and Industries in Scotland aims to be a learning evaluation for Scottish Enterprise (SE) on the policy interventions pursued to date. The research objectives for this study focus on five principal learning areas: the appropriateness of cluster and industry policies and strategies; the rationale of programme selection and design in the light of strategic intent; the efficacy of cluster and industry interventions seeking to improve critical factor inputs; learning lessons and the adaptation and evolution of the approach; and broader SE support and resourcing. This report is one of the fifteen cluster- and industry-specific reports that have been prepared as background to the main report. In relation to the financial services industry, the report focuses on: the rationale behind SE involvement in the cluster and the appropriateness of the strategy; how the cluster work has rolled out in practice and in light of expectations; and the lessons learnt and how SE should go forward.

The report has been primarily based on a desk review of the individual clusters and industries - collected and collated by SE and ECOTEC jointly. Seventeen interviews were held with SE staff, industry representatives and intermediate institutes. The main findings and conclusions have been tested with independent sector experts and reviewed by SE stakeholders.

The activities of the financial services team have been adequately funded and the significant contribution of the financial services to the Scottish economy justifies the involvement of the public sector. The skills set and credibility of the team engage the financial services industry and are the key elements of the successful delivery and implementation of initiatives. There does not seem to be any structured process for formally sharing good practice among cluster and priority industries, although there are some instances where the team have adopted good practices from elsewhere in the SE network. Initiatives’ effectiveness have been enhanced through the success of the financial services team in involving financial service companies. The financial services team has helped to improve the attractiveness of Scotland as a location and helped Scottish Development International (SDI) provide a more focused offer to inward investors.

The report suggests a greater use of evaluations to assess the impact of SE activities, which should include: an assessment of expenditure and output by theme area; a review of unit cost of output to establish efficiency; and an assessment of the impact of cluster activities on industry GVA and sales. The team should identify ways to assist Scottish companies to access the financial services supply chain. Additional funding for the team would secure greater benefits for the Scottish economy, using the framework of the new strategy and implementation plan.