You know you’re doing something right when dozens of international architectural practices enter the design competition for your new waterfront flagship. Ten years ago Dundonians would have scoffed at the idea that the Victoria & Albert Museum would develop a £45m international centre for design overlooking the Firth of Tay. But with the city making impressive progress on its £1bn regeneration project, nobody is scoffing now

You know you’re doing something right when dozens of international architectural practices enter the design competition for your new waterfront flagship.

Ten years ago Dundonians would have scoffed at the idea that the Victoria & Albert Museum would develop a £45m international centre for design overlooking the Firth of Tay. But with the city making impressive progress on its £1bn regeneration project, nobody is scoffing now.

Designed by Japanese architect Kengo Kuma and due for completion in 2015, the V&A at Dundee is the flagship project in an ambitious strategy to re-unite the city centre with its waterfront, via stylish boulevards and a new public park. The V&A is a key element of the Dundee Central Waterfront project which is expected to create at least 1,000 jobs over 10 years, generate more than £500m GVA for Scotland’s economy and generate an additional £270m of private sector investment in the project.

When complete, it will contain more than 1500 sq m of gallery space. It will host world-class design exhibitions – organised with the V&A and other national and international partners – alongside displays of outstanding Scottish design. Located on the city’s most prominent waterfront site, next to Captain Scott’s RRS Discovery,

V&A at Dundee is predicted to attract some 500,000 visitors in the first year of its opening – a statistic that has already attracted the attention of major hotel groups. In January of this year Malmaison announced it is to open a 91-bedroom boutique hotel within the dilapidated Tay Hotel, a listed waterfront building that is now undergoing a major restoration by Interserve. Completion is scheduled for May 2013.

Meanwhile, Dundee City Council is in negotiation with Hilton regarding the purchase of their hotel, which lies a short distance to the east of the V&A site. The hotel is likely to be demolished to clear its waterfront site for modern business or leisure development.

Already, a £200m investment at the nearby City Quay has converted historic jute warehouses for a wide range of business uses. Around the once-deserted dock there are now new developments including hotel, office and residential buildings. Proposals for a new marina are also being explored.

Such is its level of activity, Dundee’s Firth of Tay waterfront is now ranked in the UK ’s top 20 regeneration projects; putting the city into the premier league of major UK schemes. Mike Galloway, Dundee City Council’s director of city development, says: “Our promotion to the Top 20 reflects the sheer scale of our plans to completely reengineer and transform the city.

“Most of the development sites have now been cleared, the waterfront area is attracting significant interest and there is further investment to come. The waterfront is fully open for business and we are encouraging investors, companies and entrepreneurs to visit the new Dundee.”

The ambitious scheme is breathing new commercial and community life into 240 hectares of waterfront land, extending for 8km along the Firth of Tay. The demolition of 1960s-style buildings and parts of an urban ring road are already unlocking sites for strategic development. Five distinctive development zones have been established, creating sites for different types of commercial, residential and leisure schemes. Stretching eastwards from the city’s famous rail bridge, the zones comprise Riverside, Seabraes Yards, Central Waterfront, City Quay and Dundee Port.

The council is working in close partnership with Scottish Enterprise on the £70m Central Waterfront project, where the enterprise agency is investing in preparatory works that will pave the way for the construction of the V&A. A new business district will also be created on the Central Waterfront.

Alan Mitchell, chief executive of Dundee & Angus Chamber of Commerce, says his members see great potential in the city’s regeneration. “We’re very, very positive about the waterfront project, particularly the V&A, which we believe will have a transformational impact on the city and the surrounding area.”

Meanwhile, Mitchell acknowledges that the economic downturn presents serious problems for his members. “Tayside businesses face the same challenges as businesses elsewhere in the UK. We’re all having to come to terms with the fact public sector expenditure is diminishing, affecting everyone from builders to event organisers and even sandwich sellers.

“Leisure and retail are being particularly hard hit at the moment. But Dundee and Tayside are not being hit any harder than other parts of the UK. We have a diverse business base, run by very entrepreneurial people. The good thing is we’re no longer dependent on a single sector, we have several areas of excellence in the city.”

A key issue for his members is the poor quality of rail links between Dundee and Scotland’s other cities. “We’re building a world-class attraction in the V&A, but there’s no point if people can’t get here via reliable and affordable travel,” he says.

The chamber recently invited Steve Montgomery, Scotrail’s chief executive, to hear their concerns. Mitchell says: “The mood was very encouraging, there’s no argument we need better rail services. We want a five-star transport infrastructure and we’ve made it clear to Scotrail that things will have to improve.”

Meanwhile, the Waterfront Partnership has been moving ahead with plans to change the station’s exterior and its surroundings. Work has now started on a new £14m station building, with a hotel, retail and office complex above.

Craig Nicol, managing partner at Dundee-based legal firm Thorntons, left Glasgow in 2003 to work in Dundee. Soon after arriving he attended a seminar where planning director Mike Galloway outlined bold plans for his £1bn regeneration scheme. “It included artists’ impressions of broad boulevards, reconnecting the city centre with the sea. ‘Yeah, that’ll be right’ I said to myself. I was very sceptical about the whole project.”

Nine years later Nicol is an avid advocate of the project: “It’s really happening. Our office overlooks the waterfront and the V&A site; every day you can see a real difference taking place right in front of your eyes – and it’s not even causing too much inconvenience. This is a ‘once in a generation’ opportunity, a total game-changer and, to its credit, the council has grabbed that opportunity with both hands.”

Now firmly established as one of the UK ’s leading biotechnology clusters, Dundee attracts world-class companies which are keen to tap into the highly skilled graduates emerging each year from the Dundee and Abertay universities. Within a three-mile radius, more than 4000 life sciences specialists are employed in research institutions, universities and international companies. The sector now accounts for 16 per cent of the city’s economy and is growing at 10 per cent per annum. The city’s annual BioDundee International Conference attracts some 300 delegates each year.

Meanwhile Tayside’s academic institutions are working together to improve access for SMEs to a range of services and expertise aimed at business development. The Innovation Portal has been set up by The University of Dundee and The University of Abertay Dundee to foster knowledge transfer in partnership with The James Hutton Institute.

John MacKenzie, the Innovation Portal’s company development manager, says: “Our aim is to improve the competitiveness of local businesses by bringing together innovative companies with scientists, technologists and engineering experts keen to apply their expertise to the needs of industry.”

The portal supports SMEs via services including helping to guide projects from concept stage through to a funded collaboration project. Where smaller companies need to outsource specialist advice, technical knowledge or specialist facilities, the portal’s academic contacts can advise on driving ideas forward into the commercial arena. It also offers access to specific research, where required, to create competitive advantage or to increase an SME’s reputation as a specialist in a particular market. Depending on circumstances, the Innovation Portal can also provide small grants to Scottish SMEs when further investigation on a product or service is required.

Digital media, computer game development and the creation of mobile digital content are also key strands in the city’s economy. The University of Abertay’s Institute of Arts, Media and Computer Games aims to turn its students into the next generation of innovators and groundbreakers in computer games and digital media. Abertay has strong links with major digital companies, ensuring industrial experts are directly involved in lecturing and tuition. Courses range from games programming at the science and technology end to animated stories at the arts end.

Rockstar North, developer of Lemmings and the Grand Theft Auto series was founded in Dundee by David Jones, an undergraduate of the University of Abertay. The city is now responsible for 10 per cent of Britain’s digital entertainment industry, with

an annual turnover of £100m. However, Dundee’s reputation was dented recently by an Economic Contribution Study carried out for Scotland’s creative industries. The study concluded that the games industry adds ‘no value’ to the economy of Scotland.

Steve Cartwright, partner at Dundee-based accountants Henderson Loggie, heads up the firm’s gaming sector group. He describes the findings of the report as ‘nonsense’. “Dundee has carved itself a strong reputation as a gaming industry cluster and it is disappointing and frustrating that this success has been poorly served by the study.

“The report has been widely discredited in terms of its findings on the computer games industry, which is acknowledged by both Creative Scotland and Scottish Enterprise who commissioned the report.”

Cartwright argues more effort should be invested in accurately assessing the sector’s GVA, “as it leaves a question mark against the sector’s position within the Scottish economy as a whole – and Dundee’s in particular”.

“The importance of this cluster in Dundee should not be underestimated,” he says. “For example, we are currently in discussions with two non-UK nationals, who previously worked in the games sector in Dundee. They have recently started a new business based in Cambridge, but are hopeful they can relocate their business to Dundee in the next few months. Their reasons? They both simply loved working – and living – in Dundee and want to be part of the computer games cluster.”

The challenge for Dundee, and Scotland’s, gaming sector is to move with the changing demands of the end-users. Games are moving more and more to online and mobile arenas, away from the traditional console games.

Cartwright sees this trend as a business growth opportunity for Dundee-based developers. “In the past, and even now, it was the publishers who made all the big money from blockbuster games such as Lemmings and Grand Theft Auto.”

They may have been created and developed here, but they were sold in boxes through retailers right across the world. “Whilst not good news for retailers – for example Gamestation has closed down and other retailers are struggling – Web 2.0 has given game players and developers alike access to digital distribution,” says Cartwright. “This completely changes business models for the whole computer games industry. For games developers, it opens up the potential of cost-effective direct access to a global market place.”

Therefore, the challenge for developers in Dundee – and elsewhere in Scotland – he believes, is not only to develop high quality games that users want to play but also to be sure potential customers know how to locate the producer’s particular game amongst the myriad of others populating the digital space. “Do that and some of the cash flow that went to the publishers will come to those who create the games,” maintains Cartwright.

As in the rest of Scotland, Dundee’s manufacturing industries are being gradually replaced by a mixed economy. However, 13.5 per cent of the city’s workforce still works in the manufacturing sector, that’s higher than the Scottish and UK average, and more than double that of Edinburgh, Glasgow and Aberdeen. With the city’s port designated as a strategic site for the construction and maintenance of offshore wind turbines, industrial activity in the city should start growing again over the next few years.

Such is the city’s combination of brainpower in digital production and life sciences, the Intelligent Community Forum, an independent think tank, regularly votes Dundee as one of the world’s top seven intelligent communities.

Little wonder then that all those architects had designs on the city’s flagship project.