Closer UK-Germany ties spurring Scottish business links, by Jeremy Grant

When you think of Scotland’s links with Germany, perhaps 2024’s invasion of Munich by the Tartan Army for the Euro football tournament comes to mind.

Or the fact that Edinburgh’s twinning with the Bavarian city is the Scottish capital’s oldest such partnership.

Yet recent developments in the bilateral relationship between the UK and Germany that mean those links are now being defined by something far bigger: the rapid re-alignment of the UK’s relationship with the rest of Europe amid a world of “rupture”, as Canadian prime minister Mark Carney recently described global geopolitics.

A key moment came last year with the signing of the “Kensington Treaty”, covering a huge sweep of areas from defence and security to North Sea energy. There is even a taskforce being set up to examine building a direct rail link between London and Germany within the next decade.

Berlin and London also pledged to set up a joint “Business-Government Forum” to promote business cooperation, with the first meeting scheduled for April.

Against this backdrop, activity is ramping up in the Scottish context. This month Germany’s consulate in Scotland convened an event for startups, investors and policymakers at the Glasgow campus of Barclays and backed by the Glasgow Chamber of Commerce and British Chamber of Commerce in Germany. The aim was to explore ways to boost collaboration between the startup ecosystems of Scotland and Germany.

Christiane Hullmann, German consul general in Edinburgh, told the audience this had been limited by German investors and corporates tending to focus on London and the Oxford-Cambridge corridor, while Scotland’s thriving startup sector was still under the radar in Germany. “This is a missed opportunity on both sides, and it’s time to change that,” she declared.

Attendees included representatives from Celtic Renewables, which runs Scotland’s first refinery for green biofuels at Grangemouth; Edinburgh-based Think Tank Maths, which uses mathematics to provide more accurate satellite tracking in space; and QuickBlock, a Stirling-based startup that makes modular structures from recycled plastic for use as exhibition stands, humanitarian relief huts and military training facilities.

Andrew Vincent, QuickBlock chief executive, said he saw Germany as “the doorstep to a growing European market” after the company made its first sale there last summer.

Business going the other way already makes Germany the second largest source of inward investment into Scotland after the US, while over 150 German companies operate in Scotland, employing 18,000 people.

The challenge now will be to attract German startup and investor interest in Scotland’s strengths in artificial intelligence, robotics, life sciences and space, where Glasgow leads Europe in small satellite manufacturing.

There is some movement. German rocket company Rocket Factory Augsburg this week said it had initiated transport to Scotland of the first stage of a rocket that’s scheduled within months to make the first flight from Shetland’s SaxaVord launch site. Travel will be made easier between Glasgow and Hanover with the launch in June of a new route on the Eurowings airline, part of Lufthansa.

Richard Lochhead, Scottish government business minister, told the event: “Like Scotland, Germany is going through rapid technological transformation and one that aligns with Scotland’s strengths”.