£100bn potential of ‘transformational' projects in the Highlands and Islands

13th May 2025

The scale of transformational opportunity facing the Highlands and Islands economy has been quantified for the first time in a new report.

The study reports 251 planned development projects in the economic pipeline of what it refers to as regional transformational opportunities (RTOs).

Together they represent a potential total investment value of up to £100.35bn, and could bring around 16,000 jobs at the peak of construction and development, and 18,000 operational jobs by 2040.

The study was commissioned by Highlands and Islands Enterprise (HIE) in partnership with the Highlands and Islands Regional Economic Partnership (HIREP) and carried out by research specialists ekosgen.

It will be discussed at the Convention of the Highlands and Islands meeting taking place in Strathpeffer today (Monday 12 May).

The scale of opportunity is described in the report as ‘unprecedented' for the Highlands and Islands and possibly even Scotland and much of the UK.

It has the potential to far exceed previous transformational periods, including even the post-war development of the Highlands' hydro potential and the main period of the oil and gas exploration era.

The dual purpose of the study is to better understand the breadth of economic opportunities with the greatest potential to bring transformational change to the region's economy and society, and to inform planning and decision-making by HIREP partners to maximise benefits.

Renewable energy projects, including offshore and onshore wind, pumped storage hydro green hydrogen and marine energy account for around three quarters of the total RTO investment value.

Others relate to space, marine biotech, life sciences, natural capital and critical infrastructure developments such as electricity grid upgrades improvements to ports and harbours and research and creation of innovation facilities.

Projects are generally well dispersed across the region’s local authority areas. They include clusters of initiatives in Shetland and Orkney, Caithness and Sutherland, Lewis, Argyll and Kintyre, as well as Moray, the Inner Moray Firth and down the Great Glen.

The RTOs are largely private sector-driven with some public sector co-investment and some investment through Growth Deals.

The report did not look at growth projects in other industries, such as tourism, food and drink and creative industries, many of which will have significant impact at a more local level. Neither did it feature other public sector investment in the likes of roads, schools and hospitals, all of which is in addition to the RTOs.

The authors are clear when it comes to highlighting barriers to growth that will need to be overcome, and the study explored what needs to be in place to support delivery of the RTO projects.

The findings will be used to inform policies and planning around topics such as population attraction and retention, skills, housing provision and transport.

A collaborative, holistic, and place-based approach is described in the report as ‘critical’ in realising the benefits of the opportunities, and something that ‘must happen at pace’.

Stuart Black, HIE chief executive, said:

"It would be difficult to overstate the importance of this research and its implications for the role that this region has in Scotland’s economic future.

"We’ve certainly been aware for some time of projects at various stages of development across the region that could transform our economy and communities and significantly enhance Scotland’s economy. This report quantifies the impacts of those projects in a way we’ve not been able to do so far. The Highlands and Islands will be the engine room for growth for the Scottish economy in the years ahead.

"We know there’s a lot to get right. Bringing these projects to fruition means addressing some serious challenges facing the region and a strong commitment to partnership. But the sheer scale of the potential prize from these efforts makes all that very worthwhile and that’s where our focus should be. The report will be crucial in informing decisions around things like planning and investment in order to realise as much of the potential benefits as possible.

“We must support businesses and communities to ensure these investments leave a long-term legacy. We also need to work together and with businesses, social enterprises and community groups to ensure the benefits are spread across the whole region."

Cllr Raymond Bremner, chair of HIREP, said:

“On behalf of the Highlands and Islands Regional Economic Partnership (HIREP), I welcome this report, which highlights the size and scale of opportunity for our region and the crucial role of local authorities and public sector bodies in fostering sustainable economies. We stand on the brink of a once-in-a-generation opportunity for economic transformation.

“For the first time, this report quantifies 251 planned development projects, representing up to £100.35 billion in investment. These projects could create around 16,000 jobs during construction and 18,000 operational jobs by 2040. This scale of opportunity is unprecedented for the Highlands and Islands, and possibly for Scotland and the UK.

“Investing in our workforce is essential, prioritising upskilling and reskilling to meet the demands of a green and inclusive economy, while also focusing on significant sectors such as space, marine biotech, life sciences, and critical infrastructure developments.

“Addressing the challenges ahead demands an unwavering commitment to collaboration. HIREP will play a pivotal role in uniting partners, aligning efforts, and creating the conditions necessary for inclusive and sustainable growth. By strengthening our existing partnerships and actively engaging with our communities, we can drive meaningful progress, build long-term resilience across the region, increase job opportunities for working people, and enhance the quality of life for our communities ."

Deputy First Minister Kate Forbes said:

“The Scottish Government’s Programme for Government 2025 puts a clear focus on attracting investment as a key driver to creating jobs and growing our regional and national economies.

“The skills, talent and natural resources running across the Highlands and Islands are well known but this report sets out the true scale of the opportunities that lie ahead.

“The challenge now is to capitalise on this promise. I look forward to working alongside our public and private sector partners to deliver on this enormous potential, creating thousands of top-quality jobs for future generations."

Membership of the HIREP includes local authorities, Highlands and Islands Enterprise, Skills Development Scotland, Scottish Funding Council, UHI, NatureScot, VisitScotland, Bòrd na Gàidhlig, HITRANS, Cairngorms National Park Authority, the Crofting Commission, business representatives and third sector organisations.

Read the full report and executive summary