Andrew Clark 

Glen where history begins in 1951

It is a damp Tuesday morning, in a scruffy service station on the M8, halfway between Edinburgh and Glasgow. The smell of fried food is wafting around the Roadchef restaurant, but the handful of customers are paying little attention to their breakfast.
  
  


It is a damp Tuesday morning, in a scruffy service station on the M8, halfway between Edinburgh and Glasgow. The smell of fried food is wafting around the Roadchef restaurant, but the handful of customers are paying little attention to their breakfast.

In one corner, a man from Flextech is on his mobile phone, having a loud but impenetrable discussion about bandwidths. Two men in suits are opposite, apparently thrashing out the details of a government grant. By the window, a woman is poring over a presentation, which includes a set of glossy pictures of electronic components.

This is the heart of Silicon Glen - the central belt of Scotland, which is home to one of the biggest clusters of hi-tech companies in Europe.

Tartan, heather and bagpipes are not much in evidence here. Neither are the traditional Scottish heavy industries of shipbuilding and mining. The undulating land between the country's two biggest cities is like a giant science park, dotted with the glossy glass and chrome buildings favoured by start-up companies.

Many have big ambitions. Brendan Hyland, chief executive of a new optoelectronics firm, Kymata, says: "We can bring to the central belt of Scotland what shipbuilding brought in the 1900s."

Already, Scotland produces 28% of Europe's personal computers and 7% of the entire world's. The electronics industry employs 40,500 people directly, with a further 29,500 in the supply infrastructure. The software sector employs a further 20,000 people, and has a turnover of £1.5bn.

Driven by need for data
Of all the areas of Britain poised to benefit from the growth of the internet and the new economy, central Scotland is perhaps the most promising.

The emphasis here is not on the much-hyped front-end consumer internet services, such as Lastminute.com and Freeserve. Instead, the region's role is more as the engine room of new technology. It houses companies producing the chips, lasers and circuits which allow information to travel instantly through the world wide web and across mobile phone networks.

Neil Martin, chief executive of a Glasgow-based start-up, Compound Semiconductor Technologies, says: "It's all about the net round here. Things are being driven by the need for data, driven by the convergence of computer companies and telecoms."

That is not to say that hi-tech businesses are new to Scotland. The electronics industry took root during the second world war, when companies shifted north to avoid the bombs dropping on English factories. Some geographical advantages quickly became clear. Central Scotland has a plentiful supply of water - essential for any kind of manufacturing. Transport connections are excellent, with two big cities on the doorstep and good air and sea links.

Among the first big corporations to locate in the region was IBM, which arrived in Greenock - the port just west of Glasgow - in 1951.

An influx in the 1960s was led by National Semiconductor, Hewlett Packard and Motorola. They were followed by Compaq in the 1970s, NEC in the 1980s and more recently, Cisco - the internet network specialist which briefly became the world's most valuable company this year.

Delivering aftercare
The presence of all these big employers has encouraged local universities - particularly Heriot-Watt, Glasgow and Strathclyde - to become centres of excellence in electronics and engineering. They are producing spin-out companies with unique intellectual property, in addition to a steady supply of graduates to fuel the growth of existing businesses.

Bill Gold, senior manager at NEC's plant in Livingston, says: "If you've got good whisky and golf, you've got a good supply of water and land."

He adds: "If I'm very honest, West Lothian and East Lanarkshire is not the most attractive area but it does have its advantages - it's only 20 minutes from here to each city."

The evolution of NEC is typical of many such companies. In 1981, the firm began making memory chips in Livingston. Profit margins are enormous - an 8in silicon wafer costing £15 can be turned into chips worth more than £1,000.

The problem is that the market for memory chips is highly volatile - prices collapsed in the late 1990s, partly due to the slump in Asian markets. Mobile phones have fuelled a revival - the liquid crystal display on phones is driven by semiconductor chips. NEC is moving more towards logic products - used to transmit digital messages - which are less liable to be considered commodities which can be transferred overseas.

Similarly, IBM in Greenock has shifted its emphasis from making personal compuetrs to delivering customer support and e-commerce solutions. Of 5,000 staff on site, only 1,000 remain in manufacturing roles.

Site director Charles Morrison says: "I want my folk to be spending time not screwing things together but adding intellectual value. Every company out there is going to have to change its business model as a result of the web. We used to concentrate on making computers. But the web is about how to put PCs together. We're now trying to provide end-to-end solutions."

Initiatives have sprung up across the region to encourage hi-tech start-ups. One is the Alba Centre in Livingston, run by Scottish Enterprise. The centre has set up a components exchange, allowing local companies to buy and sell each other's intellectual property, helping them to fill the gaps in their own technology.

The centre is running a four-year doctorate programme in systems integration, and is building a new block - Integration House - containing office space and communal areas. Its director says: "We have to keep increasing the knowledge base. We need to act as a magnet to bring in overseas companies."

The town of Livingston is enjoying the benefits. A former mining area, much of the new development is on reclaimed land. The landscape is bleak, uniform grassland with new housing estates situated on complicated ringroad networks.

The town has a new hospital and a new college. A shopping centre, the Almondvale Centre, is buzzing with people and has a high concentration of shops selling pricey electrical goods.

Closer to Glasgow, Compound Semiconductor Technology has been established as an incubator for new companies. It takes designs from entrepreneurs and produces working prototypes of optoelectronics and chips.

Biotechnology has joined the technology boom - among the local companies is PPL Therapeutics, the company best known for cloning Dolly the Sheep.

Few would claim that the benefits of the hi-tech economy have yet trickled down to all the areas of urban deprivation in Glasgow. However, the "new economy" looks set to keep Scotland in chips for years to come.

 

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