Intro
Aberdeen is a city located in Northeast Scotland. Being the third most populous city in the country, with a population of 227,560 people, it forms one of Scotland’s 32 local government council areas (Aberdeen City). The city finds itself 93 miles (150km) northeast of Edinburgh and 398 miles (641km) north of London. It is the northernmost major city in the United Kingdom, which explains its ‘moody’ weather. The city benefits from a long, sandy coastline featuring oceanic climates. It thus experiences cool summers and merciful, rainy winters. Often referred to as the Granite city, business in Aberdeen focused on the coarse-grained phaneritic rock found locally. Aberdeen exploited the grey granite that was abundantly mined during the mid-18th to the mid-20th century. Sparkling like silver due to its high mica content, you may often find it on the side of your next serviced apartment stay in Aberdeen.
Aberdeen’s Cultural and Economic History
The region of Aberdeen has been a site of human settlement for over 8,000 years. It originally began as two separate burghs where Old Aberdeen was found at the mouth of the river Don, and new Aberdeen was located near the Denburn waterways entrance into the river dee estuary. This could explain why New Aberdeen was focused on fishing and trading. It wasn't until 1179 that the first charter was granted to Aberdeen by William the Lion, confirming the city’s corporate rights.
Business in Aberdeen has long been a complicated affair. The city has had to rebuild itself on numerous occasions, searching for new ways to develop and adapt local businesses and the wider economy. In 1817, the city had become bankrupt due to overspending on expensive infrastructure during the post-Napoleonic depression. The increasing prominence of Aberdeen’s shipbuilding and fishing industries galvanised the city's decision to construct the present harbour which includes Victoria Dock and the South Breakwater. Gas street lighting then arrived in 1824, followed by an enhanced water supply which appeared in 1830 when water started being pumped from the Dee to a reservoir in Union Place. It was then, in 1865, that an underground sewer system replaced open sewers.
The birth of an Oil Economy
Up until 1970, a large portion of Aberdeen's economic growth was reliant on industries such as textiles, foundry work, shipbuilding, and papermaking, which was the oldest industry in the city, dating back to 1694. However, due to the closures of the Donside Paper mill and the Davidson Mill, the importance and notoriety of papermaking were diminished. Furthermore, as Richards of Aberdeen closed, textile production began to follow the same downward path as papermaking. Lastly, in-shore fishing, was had held its place as one of the most prominent industries, was surpassed by deep-water fishing. Capitalising on improved technologies, deep-water fisheries exploited the northern waters. Because of overfishing, and the increasing use of the harbour by oil support vessels, the Aberdeen Port was eclipsed by more northerly ports of Peterhead and Fraserburgh.
This enabled the oil industry in Aberdeen to flourish in the shadows and take over its local economy...
The Aberdeen Petroleum industry took no time to engrain itself in the local industries and take the economic spotlight. The North Sea oil, discovered in 1969, is a mixture of hydrocarbons, comprising liquid petroleum and natural gas. The Oil industry in Aberdeen wasn’t solely used to reap business profits, but also for political purposes. It was used by the Scottish National Party (SNP), in the 1970s, which ran on the acerbic slogan: “It’s Scotland’s Oil.”
Although oil formed a crucial and prominent part of Aberdeen's industry, it also had its ups and downs. Between 2014 and 2016, during a turbulent phase, close to 100,000 employees lost their jobs in the oil industry and supply chain. Another 360,000 were forced to take a 15% to 20% pay cut. Workers sold cars they could no longer afford to run, and spent less time on land, and more away from families. Despite troublesome times, Aberdeen has managed to make a name for itself as the centre of Europe's petroleum industry.
The New Economy
As technologies advance, and the societal views on renewable energy and global warming shift in a positive direction, The Aberdeen petroleum industry needs to diversify into a non-fossil fuel-based industry in time to steer clear of the same fate of the UK coal mining areas. The oil companies are not blind to the situation. The hoteliers and restaurants know it too. Change is coming to business in Aberdeen. A city once reliant on North Sea fossil fuel production is now trying to avoid becoming the city of stranded assets.
The increasingly progressive climate-oriented initiatives are beginning to take the spotlight. The United Nations’ COP26 climate conference in Glasgow, Scotland, saw an increasing number of points raised concerning climate change and the impact of non-renewable energy on the issue. Aberdeen served as a model to demonstrate what policies and business innovations carbon-dependent cities want to adopt to help reduce their carbon (and oil) footprint. It demonstrates the ways cities are willing to change and transform their economies, benefiting from the colossal advancements in technology.
Either way, the oil industry in Aberdeen has been forced to stray away from its current path. The UK government announced its net carbon zero emissions target by 2050, a deadline the Scottish Government had previously advanced by five years. The state of Aberdeen city region’s economy released an independent report stating their needs to be continued, and reinforced, focusing on critical factors for the region’s long-term success –infrastructure investment, economic diversification and energy transition.
A campaign aiming to reduce the consumption of fossil fuels in buildings and transport was launched by the city six years ago. This managed to reduce Aberdeen’s carbon emissions by 34% in just five years. However, climate activists argue that the city and UK government, are not putting enough pressure on large corporations to push the transition towards green energy. The Director of UK-based environmental group UpLift, Tessa Khan, states;
“UK oil and gas extraction policy is completely out of step with what the science tells us will be required to achieve our climate change goals,”
In hopes of accelerating the change from the Aberdeen petroleum industry, the city needs to diversify itself into renewable energy life sciences, tourism, food and drink, and the digital economy. The proposed energy transition zone will hopefully accelerate this change, creating 2,500 green sector jobs by 2030. This targets high-skill sectors such as refuelling facilities and hydrogen manufacturing.
As Aberdeen re-develops its economy, it attracts a large amount of business travel. Its tourism sector responds to such changes by adapting and offering new local experiences. Aberdeen's serviced apartments will allow you to take the time explore the city, and learn more about its economy and business opportunities.
