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The economy of Scotland
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The economy of Scotland is the 43rd largest in the world with a nominal gross domestic product (GDP) of $233.332 billion per annum. As of 2016, Scotland is the second-largest economy in the United Kingdom.
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Manufacturing
Scotland was one of the industrial powerhouses of Europe from the time of the Industrial Revolution onwards, being a world leader in manufacturing. This has left a legacy in the diversity of goods and services which the Scottish economy produces today, from textiles, whisky and shortbread to jet engines, buses, computer software, ships, avionics and microelectronics to banking, insurance, investment management and other related financial services.
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Textiles
Historically Scotland's export trade was based around animal hides and wool.
This trade was firstly organised around religious centres such as Melrose Abbey.
Despite increasing competition from low-cost textile producers in SE Asia and the Indian subcontinent, textiles in Scotland is still a major employer with a workforce of around 22,000.
The textiles industry is the 7th largest exporter in Scotland accounting for over 3% of all Scottish manufactured products
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Whisky
Whisky is probably the best known of Scotland's manufactured products. Exports have increased by 87% in the past decade and it contributes over £4.25billion to the UK economy, making up a quarter of all its food and drink revenues. It is also one of the UK's overall top five manufacturing export earners and it supports around 35,000 jobs. Principal whisky producing areas include Speyside and the Isle of Islay, where there are eight distilleries providing a major source of employment. In many places, the industry is closely linked to tourism, with many distilleries also functioning as attractions worth £30 million GVA each year.
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Construction
Scotland builds around 24,000 new homes per year, about 0.1% of its existing dwelling stock. The home building industry in Scotland directly and indirectly contributed around £5 billion to the Scottish economy in 2006 – about 2% of GDP – greater than that of higher profile industries such as agriculture, fishing, electronics and tourism.
Eight out of every ten new homes are for private purchase. The industry works in partnership with local authorities and housing associations to provide low cost housing for sale and social housing for rent.
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Financial services
Edinburgh was ranked 15th in the list of world financial centres in 2007, but fell to 37th in 2012, following damage to its reputation, and in 2015 was ranked 71st out of 84. Influential financial players such as The Royal Bank of Scotland, the Bank of Scotland, Scottish Widows and Standard Life all have a presence in the city.
Centred primarily on the cities of Edinburgh and Glasgow, the financial services industry in the Scottish Economy expanded with a growth rate of over 35% over the period 2000 to 2005. The financial services sector employs around 95,000 people and generates £7bn or 7% of Scotland's GDP.
The global headquarters of Standard Life is based in Edinburgh.
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Banking
Today Scotland is home to 4 clearing banks – the Bank of Scotland, The Royal Bank of Scotland, the Clydesdale Bank and TSB Bank. The Royal Bank of Scotland expanded internationally to the second largest bank in Europe, fourth largest in the world by market capitalization in 2008, but collapsed in the 2008 financial crisis and had to be bailed out by the UK Government at a cost of 76bn pounds.
Three Scottish clearing banks still issue their own banknotes: (the Bank of Scotland, The Royal Bank of Scotland and the Clydesdale Bank). These notes have no status as legal tender; but in practice they are accepted throughout the UK. The full range of Scottish bank notes commonly accepted are £5, £10, £20, £50 and £100.
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Natural Resources
Scotland has a large abundance of natural resources from fertile land suitable for agriculture, to oil and gas. In terms of mineral resources, Scotland produces coal, zinc, iron and oil shale. The coal seams beneath central Scotland, in particular in Ayrshire and Fife contributed significantly to the industrialization of Scotland during the 19th and 20th centuries. The mining of coal – once a major employer in Scotland has declined in importance since the later half of the 20th century, due to cheaper foreign coal and the exhaustion of many seams.
Almost 80% of the Scottish oil is used for agricultural purposes.
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Technology
Electronics. Today, Scotland produces 28% of Europe's PCs; more than seven per cent of the world's PCs(Personal Computers) ; and 29% of Europe's notebooks.
The Software sector in Scotland has developed rapidly and there are now an estimated 40,226 people working in Digital Economy across Edinburgh, Glasgow and Dundee. Several universities are playing an important role by producing world-leading research in Computing Science, including the University of Edinburgh's School of Informatics.
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Tourism in Scotland
Tourism is one of Scotland's fastest growing economic sectors.
It is estimated that tourism accounts for 3% of Scotland's economic output. Scotland is a well-developed tourist destination with attractions ranging from unspoilt countryside, mountains and abundant history. The tourism economy and tourism related industries support c. 170,000 full-time equivalent jobs mainly in the service sector. In 2014, over 15.5 million overnight tourism trips were taken in Scotland, for which visitor expenditure totalled £4.8 billion. Domestic tourists (those from the United Kingdom) make up the bulk of visitors to Scotland. In 2014, for example, UK visitors made 12.5 million visits to Scotland, staying 41.6 million nights and spending £2.9 billion. In contrast, overseas residents made 2.7 million visits to Scotland, staying 21.5 million nights and spending £1.8 million. In terms of overseas visitors, those from the United States made up 15% of visits to Scotland, with the United States being the largest source of overseas visitors, and Germany (13%), France (7%), Australia (6%) and Canada (5%) following behind.
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