Silicon Valley, meet 'Silicon Glen'

Edinburgh, Scotland-- You've heard of California's Silicon Valley--and maybe the Silicon Hills of Texas--but how about Silicon Glen?

A 70-mile-wide area stretching across central Scotland-which includes Glasgow, pioneer shipbuilding city, and the cultural center of Edinburgh-Silicon Glen is where five of the top ten PC and workstation makers have manufacturing or design operations: Digital Equipment Corp., Compaq Computer, IBM, Sun Microsystems, and Hewlett-Packard. In fact, 10% of the world's and approximately 40% of Europe's PCs are produced in the region, as well as 35% of Europe's workstations.

Over 400 foreign high-tech companies-including about 200 U.S. firms-have manufacturing and service facilities in Silicon Glen, which employs more than 52,000 people. Electronics surpasses even whiskey as Scotland's biggest export. Electronics-related products last year accounted for more than $7.5 billion, or about 43% of Scottish exports. Notable U.S. electronics companies with Scottish locations include Motorola, National Semiconductor, AT&T Global Information Solutions (formerly NCR), and Solectron. The chip companies share more than 11% of Europe's total semi- conductor capacity.

Technology and innovation are not new to Scotland. Consider this:

Robert Watson Watt headed the research project that gave Britain radar to track down enemy aircraft in World War II. The research was done in Scotland to avoid the German bombing of England.

  • Edinburgh-born physicist James Clark Maxwell-ranked as one of the greatest physicists and scientists of all time-discovered laws governing electric and magnetic fields.

  • James Watt invented the modern steam engine in Scotland in 1765.

  • Scotsman John Napier in the 16th century invented logarithms and the first calculating machine, called Napier's Rods. The two inventions led eventually to the slide rule.

Still, when most Americans think of Scotland, they conjure up visions of kilts, bagpipes, whiskey, salmon, sheep, and castles. During my week's stay, I saw (and sometimes tasted) all these traditional offerings. But I also visited five U.S.-based companies-all of which were expanding-and talked with engineers from other companies, as well as with academics, studying such cutting-edge technologies as nanotechnology, voice recognition, and massively parallel computing.

Why Scotland? Companies cite a number of reasons for locating in Scotland. Chief among them are:

Government incentives

  • Quality of the workforce

  • Universities and colleges

  • Undeveloped land

  • Clean water supply

  • Network of supporting services

  • Ease of transporting goods to the rest of Europe

  • No language barrier-English is the native language.

Slightly smaller than the state of Maine, Scotland's population totals 5.1 million. Unemployment in 1993 averaged 9.6% out of a workforce of 2.51 million. These statistics are courtesy of Locate in Scotland (LIS)-a UK government agency that helps foreign companies establish operations in Scotland. The agency offers custom incentive packages to U.S. companies considering Scotland for European manufacturing operations. The packages can include: grants, tax breaks, and recruitment and training assistance.

According to LIS, the quality of the workforce is the number-one reason for foreign investment in Scotland. LIS backs this up with these statistics: Productivity in the electronics sector has risen 8% per year since 1986, and unit labor costs are 8% lower than the UK average. Absenteeism is the lowest in the UK, and labor turnover is

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