Scotland could lose out in an enlarged EU
Speaking at Scotland week in Brussels, Scottish Secretary Helen Liddell said that enlargement of the European Union will bring opportunities but it will also increase competition.
Mrs Liddell is concerned that many Scottish businesses are ill equipped to compete with the rest of Europe.
She warned on Wednesday that while enlargement is the biggest ever opportunity it is also the biggest ever challenge.
Mrs Liddell said: "The enlargement of the European Union should bring enormous economic dividends as the single market expands from 380 million consumers to 500 million.
"This will mean more trade, greater economic growth and above all more jobs for our people. Enlargement is set to add £175m a year to Scotland's GDP.
"Most of the current candidates for EU membership are countries which have transformed into credible markets since the end of the Cold War.
"And many of our Scottish firms have been getting involved in these markets without waiting for enlargement."
'Greatest challenge'
But the Scottish Secretary warned Scots firms to guard against complacency as the single market expands across Europe.
She said: "For every firm hungry for business in Latvia or Slovenia, there is a young enterprise in one of those countries that is just as eager to win orders in our home market. And believe me, they will.
"For while enlargement is the EU's greatest opportunity, it is also the greatest challenge for our firms. Orders will not fall into their hands like ripe fruit.
"To prosper in the Single Market, Scottish business will have to compete with the best in Europe. There is no reason why it should not do so but it will need to be at its innovative best.