News In Focus
Core issues for Scottish economy identified in Fraser of Allander report
Eight core issues Scotland has to address if it is to seize export opportunities and build an economy fit for the future, have been identified in a study by the Fraser of Allander Institute, commissioned by legal firm Shepherd & Wedderburn.
Scotland in 2050: Realising Our Global Potential, which the Institute was appointed to prepare last year to mark Shepherd & Wedderburn's 250th anniversary, is based on the views of more than 100 business leaders, industry bodies and representatives of public and third sector organisations.
The Institute identified key trends, opportunities and risks that Scotland needs to respond to in order to compete in a rapidly evolving global economy. Crucially, the global nature of these issues will be important irrespective of Brexit or other forms of constitutional change – though Brexit is likely to make the challenge more difficult.
It concludes that economic analysis and engagement with business show that Scotland has key strengths that should give optimism for the future, but that a number of different actions are needed if the country is to take advantage of the changing nature of the global economy over the coming decades. These have to address low productivity, the skills gap, lack of strategic export focus, outdated infrastructure, political short-termism and the potential for growing pressure on public services as a result of the revised budget arrangement agreed by the Scottish and UK Governments.
The report identifies that Scotland needs:
- infrastructure, both physical and digital, that is fit for the future;
- an economy that harnesses and trades on knowledge;
- an ecosystem that nurtures and retains businesses of scale;
- an appropriately skilled workforce led by effective management/leadership teams;
- greater collaboration between academia and industry to commercialise innovation;
- a national strategy focusing resource and investment on activities with growth potential;
- a more joined-up, collaborative approach to entering new markets;
- policy (at local, national and UK level) that is longer term in its objectives.
It concludes that exporters should be encouraged to scale up, and there needs to be "a more intense 'export culture' across Scotland's business base, particularly amongst SMEs", adding: "Finally, the importance of collaboration was stressed repeatedly. A small open economy provides significant opportunities to get ahead and to work in partnership to grow market opportunities at scale. Whatever happens with Brexit, Scotland needs to continue to engage proactively in international markets and remain an open and welcoming place for global investment and talent."
Professor Graeme Roy, director of the Fraser of Allander Institute, commented: "Our economic analysis and engagement with business has shown Scotland has key strengths that should give the country optimism for the future.
"But in many areas there is scope for improvement: our export base is too narrow and we lag behind many of our competitors. If Scotland is to take advantage of the changing nature of the global economy in the coming decades, it will need to boost its level of internationalisation."
Paul Hally, chairman of Shepherd & Wedderburn, added: "We have been delighted to sponsor this landmark research project, which has given leading figures in the private, public and third sectors the opportunity to make their voices heard in an important conversation about the future of the Scottish economy.
"The Scotland in 2050 report is underpinned by this conversation, and the broad consensus that emerged around the key measures that policymakers will need to consider to ensure we maximise our economic potential.
"Despite the challenges it identifies, this research shows that there is much to be optimistic about. Scotland has a proud tradition of innovation and entrepreneurialism which, if properly harnessed, will see us seize the considerable opportunities ahead."
Shepherd & Wedderburn will host a series of political engagement events in Edinburgh, Glasgow and Aberdeen in May to discuss the report's findings.
Click here to access the report.