By Donna Ewen
RUSSELL Borthwick is chief executive of Aberdeen and Grampian Chamber of Commerce. The independent and privately funded organisation has 1,150 members who represent 125,000 employees across Aberdeen and Aberdeenshire. Like the region’s economy, it punches well above its weight, commanding national respect. Russell took charge on the day oil hit $27 a barrel – but took the role because he saw the need for the area to diversify and change, and was passionate about helping the city region maintain and grow its success. The economic landscape has changed since then, with Aberdeen recently ranked the top place to live and work in Scotland by PwC and named a must-visit destination globally by the New York Times – just some evidence that the story he wants to tell the world is gaining traction. However, the renaissance is only just beginning – as Russell explains to ABN.
ABN: Tell us a little bit about your background.
Russell: I was born and schooled in Aberdeen – at Ashley Road and the Grammar – then started my career at Aberdeen Journals in the circulation department. I left for a year to work with NorthSound so gained broadcast media experience, before returning to the Journals. Once I’d reached the position of marketing and promotions manager, I was unexpectedly tapped on the shoulder about a role at our sister newspapers in Newcastle and ended up taking the job. That was in 1994. By 2000, I was involved with the Trinity acquisition of Mirror Group and the “interesting” but fascinating task of integrating regional and national newspaper businesses, with different cultures and very different ways of working. In 2004, frustrated by the head in sand future view of the future of our bosses and shareholders I left and set up a company called Press Ahead, which was involved in marketing and publishing strategy, research, PR and design. After 10 incredible years, I was prised back into newspapers as regional managing director for the whole Trinity Mirror NE with the task of disrupting the cycle of decline. We had some success but the die was cast and when I was offered the Chamber role in the autumn of 2015, I didn’t hesitate.
ABN: How did you find Aberdeen on your return?
Russell: Although I had been working away for 20 years, I came back to Aberdeen quite regularly during those two decades. What I would say is that it had hardly changed! We were complacent and too comfortable which led to inertia. The Chamber role gave me an amazing platform to help make a positive difference reinventing the city I grew up in and love. 2015-18 wasn’t a comfortable period for the region, it was painful for businesses and people, but even in the darkest days, we shouldn’t lose sight of the fact that most places in the UK would still have swapped our economy for theirs. It was a wake-up call that allowed us to take action before it was too late – a fate that had befallen many of the nation’s post-industrial cities. $27 oil gave us a view of the future without the sector on which we had become over-dependent and the impetus to get our act together. Since then, there’s no doubt this is a place changing for the better with £10bn of new infrastructure and regeneration projects completed, underway or planned, a highly successful city region deals and plans to diversify into other sectors.
ABN: The Abzolutely campaign was launched earlier this year. Why did you think it was necessary – and what’s the response been like, from partners and the wider world?
Russell: One of the things I’ve found since I came back is that people who appreciate what Aberdeen has to offer are the people who are locals with alternative experiences from other places or in fact people who moved here to work and now wild horses wouldn’t drag them away. Aberdonians can sometimes have a glass half empty outlook and a bit of a downer on their own place which you don’t see elsewhere. I’m keen not to think of Abzolutely as a campaign. It’s a social movement, from the ground up. We wanted to create something that was very easy to access, that it was colloquial, that it wasn’t corporate. It was just about the folk of this region beginning to realise that actually this is a pretty good place to live and work. We’re lucky because at the Chamber we have visibility of all the good stuff that’s happened or is about to happen. We thought we needed to pull all that positivity together. We wanted to provide a resource that people could use. The toolkit at abzolutely.com is copyright free – the images, videos, facts and words you can cut and paste and use white-labelled or with the branding to talk up the area. We wanted to say we have a great story to tell and here it is. If someone has £100m to invest and has a choice of cities across Europe, should they visit here and the message they get is that Aberdeen is rubbish, they’re going to take their investment elsewhere, so we all have a job to do.
ABN: We hear a lot about the importance of private and public sector partnership working. How would you assess the current state of the relationship between the Chamber and our local authorities and indeed our governments?
Russell: We are independent of government. We are one of the strongest and most influential Chambers in the UK, which gives us a voice. We call ourselves a critical friend. We want to help our members be better businesses today and deliver that in a range of practical ways. Alongside that, we try to create the economic conditions for the future that will allow our businesses to thrive. That’s what governments at all levels can do and the Chamber will support and get behind good stuff. However, if we see mistakes being made or policies being developed that are not in line with what our members want, that’s when we become a constructively critical friend and will call them out, so we will continue to lobby government, whether that be at Westminster, Holyrood or locally.
ABN: What do you think the new UK Government means for the North-east.
Russell: I think that remains to be seen. The Conservative manifesto contained specific reference to an energy sector deal and to the possibility of awarding freeport status both of which could support business growth here. Of the six MPs on the Chamber’s patch, three are Conservative so we will be working closely with them to ensure this government understands the importance of North-east Scotland to the UK economy. The other three are SNP giving us influence with Scotland’s ruling party too. The Chamber’s own business priorities manifesto can be viewed on our website and will be used in discussions with all parties.
ABN: What do you see as Opportunity North East’s role in growing the local economy?
Russell: ONE has a unique role to play. It is actually the envy of lot of places. It’s an independent private sector development organisation but it pulls together like-minded public and third sector organisations and facilitates getting stuff done that drives our economy of the future. Of course, it has the Wood Foundation funding of £62 million to underwrite projects and bring in other match-funding. It’s not a talking shop. It’s action shop. The city region deal, oil and gas technology centre, innovation hubs, food and drink, fisheries, life sciences and more– all of these initiatives and sectors are being developed by ONE.
ABN: Is the City Region Deal delivering for the North-east?
Russell: Yes. Very strongly. If you went to Westminster or Holyrood and asked which of the City Deals is delivering best, I’m pretty sure they’d say Aberdeen. The pace has been really good. The funding was comparatively low – £250m – but that has been grown to £765m through investment from other sources. As we talk to the government about the future, we can say we don’t want hand-outs, instead asking them to invest in a region that can demonstrate a strong track record of return.
ABN: Where is the evidence of the North-east’s successful diversification when every other region is talking about digital and tourism as their future?
Russell: The key sectors that are going to drive the economies of Scotland and the UK do have a lot of commonalities, so we have to look for our points of difference. We are moving from being Europe’s oil and gas capital to being a global energy hub. About 25% of Scotland’s food and drink exports come from Aberdeen and Aberdeenshire, and there are plans to further grow and strengthen our activities in fisheries and agriculture. Life sciences are a hidden gem. Some of the drug development work in this region is second to none in the UK. At Foresterhill we have Europe’s largest single-site health and research campus. Regarding tourism, we had limited hotel capacity at ridiculous business rates. We have thousands of new high-quality hotel rooms developed in the last five or six years and much improved cultural offer, as well as gems such as our countryside, coastline, golf, castles, food produce, whisky and craft beer. To enable Scotland to achieve its tourism growth targets it needs places with product and capacity – we have both and plan to for it to be a £1 billion industry here by 2023. We haven’t had a visible digital cluster but we have lots of pockets of excellence everywhere including creating VR for remotely servicing oil platforms. But people don’t necessarily know all of this because our mentality is just to get on with stuff rather than talking about it.
ABN: A lot’s been happening in the city – the new event complex, the re-opened Aberdeen Art Gallery, work starting on Union Terrace Gardens, the hydrogen programme. The Aberdeen harbour expansion aside, what’s the private sector’s contribution to the North-east’s renaissance?
Russell: Successful cities are those that embrace place-making and this starts with the premise of the public sector providing the seed corn investment, and the private sector then responds. The Manchester story, masterminded by Sir Howard Bernstein is a great example. The forward-thinking of the city council and progress around the City Centre Masterplan has been good. It’s started the momentum with the Music Hall, Art Gallery, Union Terrace Gardens, Marischal Square and bringing world-class events and cultural festivals here. However, a specific challenge as we look to part two of the equation is that we need to make sure our planning process enable and encourage private sector investment, not act as a blocker to it.
The recipe for cities that have successfully reinvented themselves is simple; it’s about people. Creating places that people want to live, work and enjoy their leisure time. This, in turn, creates demand so new businesses and services spring up to serve them. A year past September I was in the newly opened All Bar One in Marischal Square and I heard three guys talking. They said we’re in a really cool bar, looking out over amazing architecture and a cloudless sky: “it’s almost like we’re not in Aberdeen”, one of them commented. I thought that was an interesting reflection on the local psyche – this is so good it can’t be here, but it is here.
ABN: The recent State of the Cities summit suggested that Aberdeen could lead the transition to a carbon zero economy, but is that really on the radar for businesses, including the oil and gas sector?
Russell: Others are making grand statements but we are getting on with it. We have the world’s first floating offshore wind farm; we’re developing that technology here, now. We also have one of the few carbon capture facilities in the UK. Aberdeen is a leader in hydrogen with the bus project and there are proposals for a housing scheme powered entirely by hydrogen. Using the unrivalled skills developed here in the North Sea and subsea expertise, we’re well placed to ensure that Europe’s oil and gas capital is a global leader in energy transition.
ABN: We hear there’s plenty of oil left in the North Sea – but given fields are marginal, for how long do you expect the UK Continental Shelf to be a profitable place to do business?
Russell: It’s not my field of expertise (still searching for that) but the previous sector deal figures talked about a potential prize for the UK economy up to £920bn to 2035. New technologies are making it more viable to mine previously uneconomic fields in the North Sea with estimates of between 10 and 20 billion barrels of oil equivalent remaining. And as other nations develop their reserves expertise and project management skills, what we have here will be in demand. The keyword in the phrase energy transition is transition! As we make progress towards our carbon targets oil and particularly gas will continue to be a vital albeit decreasing part of our daily lives. So, I think it will continue to be a key sector here for decades to come.
ABN: We now have greater certainty around Brexit i.e. it’s going to happen. Is that really enough to allow North-east business to get on with things – or will much depend on the detail of any deal struck?
Russell: One way or another, during the last decade uncertainty, has become the only certainty but good businesses have just been getting on with it. The credit crunch, exchange rate fluctuations, multiple referendums and elections, wars – real and trade. Successful companies navigate around all this and will continue to do so. Very often out of what appears to be a challenge, they find opportunities. With regard to Brexit, the Chamber hasn’t been speculating. We’ve been sharing what we know and providing practical support and advice to members, and through the British, Chamber taking their concerns to government – with some success. Given the nature of the Government’s majority, I do expect the deal will be more favourable to business than might previously have been the case but whatever the outcome, whether it is delivered now or later, the Chamber will support regional companies that import and export through the process.