Following the continued uncertainty of Brexit throughout the year, a general election and doubt surrounding the UK’s exit deal, the Scottish economy faced many challenges in 2019.

So, what will 2020 hold for Scottish businesses? Experts from Johnston Carmichael, map out what 2020 could hold for the country’s business sector. 

1. Chinese markets could boost Scotch beef

Adam Hardie, Head of Food and Drink, said: “Scotch Beef is consistently recognised as premium quality; however, the industry is in crisis, as sales prices to UK supermarkets are at such a low level. We need to identify new export markets targeting those consumers who will pay for premium quality Scotch Beef and China may be the solution in 2020. For the first time in more than 20 years, UK farmers and beef producers now have full access to the Chinese market, marking the end of a ban imposed by China following the BSE outbreak in 1996.”

2. Manufacturers will have a greater focus on resource efficiency

“The need to reduce global warming to avoid potentially disastrous environmental consequences is playing an increasingly important role in influencing consumer behaviour. Manufacturing companies will need to accelerate their efforts to reduce consumption of both energy and natural resources throughout the product lifecycle, and this will impact their investment and supply chain decisions. Aside from this, digital technology and automation will continue to play an increasingly important role in how businesses operate and collaborate,” said Alistair Black, Head of Manufacturing & Engineering.

3. Technology aid under threat

Shaun Millican, Head of Technology and Life Sciences, said: “Further uncertainties around Brexit in relation to EU funded grants will come into sharper focus in 2020. The current guarantees are that if a deal is secured with the EU, then UK businesses will be able to continue to participate in EU programmes until their closure (the EU multiannual framework runs 2014-2020) and under a no deal, the UK government has said it will guarantee funding on a similar basis. As we progress through 2020, there will be increasing uncertainty about what funding may be available unless the government moves quickly to announce alternative measures.”

4. Renewable energy focus will grow

“The push to be carbon neutral in the UK by 2050 and Scotland by 2045 continues to fuel the ambition, but what is really needed is political and economic certainty,” said Mark Stewart, Head of Infrastructure and Renewable Energy. “We see pockets of innovation in areas such as hydrogen, bioenergy and waste recycling but nothing on the scale required to meet the targets. Offshore wind will be a major part of the jigsaw, and it was great to see commitment in this area with the Queen’s speech announcing a pledge to increase new offshore wind capacity to 40GW by 2030, which should hopefully help to put the UK on track to deliver 75GW in offshore wind by 2050.”

5. Social impact will be a driver for charities

Jean Main, Head of Third Sector, said: “Having a clear ‘20/20 vision’ for your charity in 2020 will help you succeed in making a positive difference during the year ahead and beyond. A new year provides an exciting opportunity for those operating in the charity sector to focus their strategies on meeting their charitable objectives and to identify and then report their valuable social impact.”

6. More controversy over doctors’ pensions

“There has been much debate over pensions recently in relation to annual allowance tax charges. A temporary fix was announced in late 2019 for employees which allows them to come out the scheme between now and March and get paid the employer pension contributions to them as part of their salary. This should help reduce the burden of their additional tax charge but does mean coming out of the scheme until April. We are hoping to hear what the more long-term resolution is soon,” said Louise Peters, Head of Medical and Healthcare.

7. Questions over the future of farming

“Farm businesses are still unclear on what future Government support schemes will look like following Brexit and what access British farmers will have to overseas markets, particularly the EU,” said Robin Dandie, Head of Agriculture. “The best advice for farmers is to ensure they are operating as efficiently as possible to keep on top of costs as best they can.”

8. Fishing for control over UK waters

“From the fishing side, confidence is still high which is reflected in the number of new vessels still being ordered. That said the 50% reduction in cod quota for 2020 will present major practical difficulties for the majority of the whitefish fleet.

“However, with so much depending on the outcome of Brexit, this will still be front of mind for the majority of fishermen. The industry is urging politicians to support its goal of exiting the Common Fisheries Policy by the end of 2020,” said Alex Martin, Head of Fishing.

9 .Self-employed status under threat

Donald McNaught, Head of Restructuring said: “The proposed IR35 changes in the private sector will have a huge impact on contractors with the onus now on their corporate clients to make assessments about their IR35 status. Thousands of contractors may need to close down their personal service companies as a result. We are here to help contractors with that transition to wind up their redundant limited companies quickly and effectively.”

10. Ethical investment will increase

Craig Hendry, Head of Wealth, said: “Environmental, social and corporate governance are three essential factors in measuring the sustainability and ethical impact of an investment. Whilst ethical investment has been around for a number of years, there is definitely more of a requirement to consider these factors when looking to invest. It is our belief that over the course of 2020 these discussions will become far more prevalent as individuals look to positively impact the environment."

11. Energy companies will seek to go greener

Graham Alexander, Head of Oil & Gas and Corporate Finance, said: “Climate change and the target of achieving net zero carbon emissions by 2035 is having a significant impact on the energy sector, and that trend will continue for the foreseeable future. Those companies that can react quickly will benefit from ‘first mover advantages’, with enhanced green credentials enabling them to compete effectively as operators seek to boost their environmental performance via the supply chain. Similarly, companies that invest in developing new products and technologies incorporating improved environmental specifications will also potentially benefit from an increase in demand.”