Borders Businesses Warn of a ‘Perfect Storm’ as Skills Shortages and Investment Gaps Threaten Growth
Businesses across the Scottish Borders are urging the Scottish Government to work with them on urgent, locally tailored solutions to what they describe as a looming “perfect storm” of labour shortages, skills gaps and demographic decline.
The Scottish Borders Chamber of Commerce (SBCC) has been canvassing firms of all sizes throughout 2025 on the greatest challenges they expect to face in the coming years. While the recent approval of Center Parcs’ first Scottish resort in the Borders has been widely welcomed as a vote of confidence in the region, it has also sharpened anxieties about whether there will be enough skilled people locally to fill the up to 1,200 jobs it is expected to create.
”“We are facing what you might call a demographic ‘perfect storm’
Laura MiddlemassSBCC Vice Chair
Laura Middlemass, Vice-Chair of SBCC and Finance Director at Plexus, one of the region’s major engineering employers, explains the dilemma.
“We are facing what you might call a demographic ‘perfect storm’. Our working-age population is shrinking just as demand across our core industries is rising.
The arrival of Center Parcs will bring real benefits, but it has crystallised a concern that has been building for years – whether the people who live here have the skills to take on the jobs being created.”
She says this is particularly acute in technical and engineering roles.
“There is a growing need across the region for electrical and electronic technicians. That mirrors a national trend, but in the Borders we face an added challenge: we have to send staff to the Central Belt for training because it is not available locally.
That is inefficient for businesses and discouraging for young people. If they have to leave the Borders to qualify, many won’t come back.”
Middlemass stresses that these skills are not abstract or futuristic.
“These are the people who build, maintain and develop the technologies that keep Scottish businesses competitive. From engineering to agri-tech, from textiles to renewables and AI-enabled manufacturing, the Borders economy depends on them.
We have young people coming through our schools who are passionate about technology and AI, but they will go where the training and the jobs are. If we don’t provide those pathways here, we will lose them.”
A growing mismatch between policy and place
The Scottish Government acknowledged the challenge of rural depopulation in its 2024 Supporting and Enabling Sustainable Communities Action Plan, which identified the Borders as an area needing targeted support. It highlighted the importance of “favourable business conditions and aligned local skills provision” in reversing population decline.
However, while government strategies frequently cite the University of the Highlands and Islands as a model for regional higher and further education, the Borders has seen declining investment in tertiary education, leaving a growing gap between economic ambition and training capacity.
South of Scotland Enterprise (SOSE), established in 2020, was tasked with driving inclusive growth across the region, including through innovation, entrepreneurship and productivity. SBCC has worked closely with SOSE and global businesses to raise the Borders’ profile, hosting major conferences focused on AI, technology and future industries.
Those events have shown how quickly small and medium-sized firms are adopting new tools to automate marketing, sales and communications – and why access to modern skills is now essential even for the smallest enterprises. SBCC’s third Expo Conference, taking place at Cardrona on 26 February, will again put AI and digital transformation centre stage.
”"We have a major funding gap in our college system that makes it impossible to provide all the training our economy now needs"
Pete SmithSBCC Director and Principal & CEO of Borders College
The role of education in sustaining the Borders economy
Pete Smith, SBCC Director and Principal and CEO of Borders College, says the region is at a critical crossroads.
“We have a wonderful place to live and work, strong communities and a vibrant, developing business base. But we have a major funding gap in our college system that makes it impossible to provide all the training our economy now needs.”
The latest Regional Skills Assessment forecasts that employment in the Borders will rise by 3,000 to 4,000 jobs over the next decade, particularly in health and social care, construction, renewables and modern trades.
“We are gearing up to meet that demand,” Smith says. “But at the same time we’re being forced to narrow our provision because of under-investment. We want to support construction, electrical trades, renewable energy, and modern tech – but we cannot do it without Scottish Government backing.”
Why it matters now
The Borders economy is underpinned by long-established employers such as Plexus in Kelso and Farne Salmon in Berwickshire, alongside a growing mix of companies in pharmaceuticals, recycling, tourism and whisky. Yet population growth has stalled, and many young people still leave the region for education and never return.
“We’re not short of jobs,” Smith says. “We’re short of people who can train for them locally. If young people have to go away to qualify, many will build their lives elsewhere – and that leaves our businesses struggling to grow.”
Improved transport links, including the return of the railway to Tweedbank, have helped, and SBCC, Scottish Borders Council and Borders Buses are working together to improve local connectivity. Discussions are also under way with Center Parcs and Borders College to align future training with the resort’s workforce needs.
But business leaders say infrastructure alone is not enough.
A call for targeted investment
Middlemass believes the solution is clear.
“We need Scottish Government ministers to work with us now to invest in local skills and connectivity before it’s too late.
If we don’t, more young people will leave, businesses like Center Parcs won’t be able to recruit locally, and even long-standing employers will struggle to stay and grow.”
She adds:
“The Highlands have seen transformational investment in education and skills. The Borders needs the same tailored support. Our challenges are different from the Central Belt, and our solutions must be too. The potential here is huge – but only if we invest in our people.”
SBCC Business Expo 2026: Actionable Insights 3.0 | Peebles Hydro | 26/02/26 09:30-17:00
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