List of top 100 Scottish firms shows who wins in our economy

The list is compiled every year by accountants Grant Thornton, and was published by The Herald earlier this week.

There was a combination of factors that got me brimming. One was an overwhelm at the amount of sheer historical work, and longstanding skills, this list represented. (Note: These are companies registered, meaning owned, in Scotland).

There are many family firms here that started in the late Victorian era, or in the mid-to-late 1960s; their websites often feature charming and folksy origin stories. Undoubtedly, they were responding and providing services to an imperial boom – or a North Sea one.

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And on the latter count for those currently green-minded, the list overall is pretty dispiriting (that generates another emotional reaction).

Number one on the list is NEO Energy, deploying its ingenuity to extract more fossil fuels from difficult oil fields (a similar kind of operation, Waldorf Production, comes in new at number eight).

There are scores of other operations that are doing well by enabling the drill-baby-drill mantra. A few – like OEG Offshore (moving to hydrogen) or CCL Components (supplying solar power elements) – seem to be genuinely transitioning to the renewable era.

But at least from a private company perspective, we do not seem to be growing green industrial giants in Scotland. (I’ll come to the Scandi-Nordic-Baltic comparisons a little later.)

Another emotional trigger comes from seeing so many car showrooms in this list – Arnold Clark at three, Parks Motor Group at 10, Eastern Western at 17, Peoples Group at 55.

Those of you who know your Michael Marra will remember his heart-breaking lament, Australia Instead Of The Stars. It’s all about Scottish timidity, in the face of supporting radical innovation.

“We’ll get by selling cars”, sang the wee man plaintively. “We know what we are”. Michael even had to change his lyric from “making” to “selling”, as the 1980s progressed. We’ll also get by selling car parts (as a few entrants on this list indicate).

Well, at least we have an historic capacity for stupefying and stuffing ourselves, in order to fill up the void of our lack of national development.

Whisky is at four and five (Grant’s and Edrington). Butchers (JW Galloway), soupmakers (Baxters) and biscuit-bakers (Walker’s shortbread), along with other food groups, are all going great guns. There’s all manner of cash-and-carry and distribution services also in this list, getting the stuff to us.

Food and drink (and a’ that) isn’t nothing, of course. But it’s the rudest of awakenings to look at a comparable list of the top 30 Danish companies in 2024, as compiled by CEO World.

The measurement is cruder than Grant Thornton’s multi-factorial rating – it’s only market capitalisation (meaning, the total market value of a company’s outstanding shares.) But it’s still a bracing, even somewhat shaming list.

Straightaway, worth scores of billions, you see companies like Vestas Wind Systems and Orsted. They’re going gangbusters, providing the engineering systems required to drive renewable energy.

But what I never really knew was the massive strengths Denmark also has in pharmaceuticals, medical products and other bio-services. Novo Nordisk – recently hitting the jackpot with slimming drugs like Ozempic – is well known.

But there is a phalanx of others – like Lundbeck, Zealand Pharma and Novonesis, or Demant, ChemoMetec and Coloplast – that are geared up to deal with fragile humans getting increasingly older, in the populations of the world.

No matter what you think of Big Pharma, it’s a huge market.

I scoured the Grant Thornton top 100 and didn’t see a pharmaceutical maker anywhere. Two pharmaceutical distributors, sure (Ethigen at 49, Target Healthcare at 89)… Why aren’t we building strong businesses out of our highly vaunted bio-research in Scottish universities? Are we going to get by selling pills, too?

I desperately needed some help yesterday with some perspectives, maybe even solutions, to all this.

There's a conventional logic here, which is that if Scotland wants a social-democratic welfare state, it will have to widen and deepen its tax base. And that comes from strengthening indigenously-based companies, paying into a Scottish exchequer.

This is a different strategy from encouraging foreign direct investment (or FDI) in Scotland, with the profits from these companies’ activities in Scotland going back to Spain, Denmark, France, China …

The think tank Common Weal (I’m on their board) wrote a paper on FDI recently. They estimated that Scotland has experienced “a net outflow of wealth in every year since records began in 1998 – totalling around £277.4 billion between 1998 and 2021. Of this, £134.7 billion was extracted to the rest of the UK and £142.7 billion was extracted to the rest of the world”.

Egregious. So looking at this (increasingly distressing) Grant Thornton list, how do we start to build more “national winners” in Scotland, as the macro-economists might put it?

Here’s a few different views from some of my sources – some willing to go above the line, some not.

“I found the list worrying and depressing”, says my long-standing economic consultant friend.

"Certainly compared with the domestic company bases in Denmark, Sweden, Finland.”

She goes on: “Our inability to grow domestic firms of real scale is a longstanding problem. In my view, we can attribute it more to structural problems in the private sector.

“It’s about lack of patient finance, an absence of collaborative advice between businesses, much weaker support mechanisms that are common in other countries, awful corporate governance …”

“The increasingly under-funded public agencies always get the blame. But I think our enterprise networks generally do a decent job helping firms through early stages of growth, including export support.”

She concludes: “But these are UK-wide issues. We don’t discuss these things sufficiently in Scotland. For example, why do we aim to change employment law but not company law?

“The crisis of UK capitalism is regularly discussed in the Financial Times. But weirdly, our ministers show little interest.”

Another voice comes from Nick Sherrard, founder of Edinburgh’s Label Sessions. “The great thing about lists like this is that they break people out of talking about the economy in the abstract.

“Scottish politicians and commentators are prone to talk about the country’s prospects sector by sector, citing an endless stream of ‘techs’ (fintech, spacetech, traveltech). When – in a country of our size – we should be able to discuss this on a more practical level.”

Nick then points me to an extraordinary site promoting Estonia to the wider business world. This fully digitalised, fiscally streamlined country – 1.3 million strong – sets itself up as an open economy.

Wide, wide open.

“Estonia isn’t your market”, runs their website. “We’re your accelerator.”

This is FDI on steroids, and vigorously shaking its tailfeathers. They boast that they’ve instigated 10 “unicorns” (that’s billion-dollar companies): Skype, Playtech, Wise, Bolt, Pipedrive, Zego, ID.me, Gelato, Veriff, and Glia.

It’s unclear how many of them are registered in Estonia, and whether they are contributing to its national exchequer (Skype, I see, is registered in Luxembourg).

Let’s assume that the powers of an independent nation-state – as both Denmark and Estonia are – would join up parts of our economy, society and culture that are currently uncoordinated.

But I enjoyed dwelling with the specificity, indeed the human community, of each business in the Grant Thornton list.

Although as a whole, it highlights gaps and deficiencies, it’s also a stack of engineering, administrative, marketing and organisational talents.

We need to begin a conversation that uses Scottish values and priorities as the fuel for diverse cultures of enterprise. And we need to deploy the full powers of a Scottish state to help develop world-straddling businesses.

And we need to start now. Independence the top line in the General Election campaign literature? Always. The Grant Thornton list – hilariously subtitled “Scotland Limited”– is a test case.