Regional policy 1960–1971 and the performance of the Scottish economy

The effect of U.K. incentives on R&D activities in U.S.‐owned electronics companies in Scotland

“…Locational restrictions on new investors through Industrial Develop ment Certificates (IDCs) and financial incentives for capital, plant, and labour costs were created to lower the investment and operational expenditures incurred by companies moving into the Assisted Areas. Research evidence (Moore and Rhodes, 1974;Begg and Lythe, 1977;and Firn, 1975) confirms that these incentives increased investment activity in Scotland, but that the attraction of multinational enterprises (MNEs) heightened the Scottish economy's dependency on externally-controlled firms. The Scottish electronics industry, in particular, experienced a significant influx of American MNEs in the late 194O's, early 1950's, and mid-1960's due, in large part, to government IDCs and financial aid programmes.…”

“…The effect on job creation in the indigenous sector was minimal. Begg and Lythe (1977) also concluded that in Scotland 'regional policy was only a qualified success'. On the positive side, they claimed that regional policy generated substantial public expenditures, and that Scotland experienced faster growth rates, reduction in unemployment, and increased job opportunities.…”

Regional Policy Incentives in the Scottish Electronics Industry:survey Evidence

“…Yannopoulos and Dunning (1976) and McDermott (1977) showed that in the 1950s and 1960s there was a profound shift in overseas investment in the U.K. from the core industrial areas to the assisted regions of Scotland, North England, Wales, and Northern Ireland. Between 1960 and 1971, regional policy in Scotland generated substantial public expenditures and faster growth rates, but research studies (Moore and Rhodes, 1974; Ashcroft and Taylor, 1977;and Begg and Lythe, 1977) have concluded that the major result was a significant increase in inward investment, and not higher employment. Firn (1975) revealed that the larger enterprises and fastest growth sectors in Scotland were externally-controlled, either by English or multinational corporations, and Hood and Young (1975/76) and Ashcroft and Ingham (1982) indicated that Scotland's regional and industrial incentives were major attributes for foreign-owned firms.…”