« Set-up Costs and Scottish Independence | Main | No sign of growth in new business, or is there? »

03 June 2014


Feed You can follow this conversation by subscribing to the comment feed for this post.


The critical figure, I think, is the number of people employed by companies that wholly or mainly serve the UK market. If a company, say a whisky distillery, sells half of its stuff to the UK and half to various other markets then it will probably stay put and diversify into those other markets.

A company that wholly serves the UK market will typically have 90% of its customers in the rUK and 10% in Scotland. That's true of my company, for example. The Scottish part of that company's business is irrelevant. In the case of Scotland becoming independent, that company has to serve its customer base from a foreign country, or else move to stay within the UK.

How many people employed by companies that wholly or mainly serve the UK market? How many jobs would be relocated?

On the relocation question, I would say from the experience of my company that we would probably continue for a while from Scotland, but I am sure we would never have created the company in Scotland in the first place, if Scotland weren't in the UK. Companies are dynamic things - they merge, go out of business, start new operations. The incumbency effect will wear off within a half life of five years or so.

Fag packet calculation: one quarter to one half of jobs in companies that wholly or mainly serve the UK market will literally go south over the next five years. Assuming 400 000 jobs are at risk, this would add between 4% and 7% to Scotland's unemployment figures, taking us back to the level of unemployment we saw in the eighties.

The comments to this entry are closed.

Top Economics Site
My Photo
Blog powered by Typepad

Become a Fan