Enterprise and Skills Review report on Phase 2: South of Scotland Enterprise Agency

3. Delivering Better Outcomes

The economic challenge

Understanding the economic context has been vital to shaping the proposals for the new organisation and the benefits it can bring. It has formed the backdrop for the project's work.

The area is predominantly rural, with a range of associated challenges including:

• An ageing population with an out-migration of young people and difficulty in ensuring attractive opportunities for them to return to.
• Challenging physical and digital connectivity.
• A number of fragile towns across the area.
• A low GDP per head with low productivity.
• Sectors with traditionally low wages and with fewer higher skilled jobs.
• A business base dominated by micro and small businesses with a lower number of businesses being started, with less investment in innovation and research and development.

Annex A sets out more detailed evidence on the economic challenges facing the South of Scotland.

Current activity

Scottish Enterprise ( SE), Skills Development Scotland ( SDS) and the Scottish Funding Council ( SFC), together with other public sector organisations including local authorities and other agencies, already work actively in the area delivering a range of services to businesses, learners and communities based in the South of Scotland. This is valued by those who benefit from the support and contributes to the economic prosperity of the South of Scotland. The South of Scotland Alliance has also been active in bringing together public and private sector partners to support economic growth. The project has recognised that range of activity and services and has explored how to maximise the impact current activity can have.

The proposal for a new approach in the area has been welcomed by those in the South of Scotland who share an ambition to deliver economic change. The new South of Scotland organisation brings focus to that joint endeavour and enthusiasm to harness activity across the enterprise and skills system to deliver the best outcome for businesses, learners, communities and individuals.

All have recognised the opportunity to do things differently in the South of Scotland. The new organisation will bring a fresh approach, with a clear and unambiguous focus on place, enabling a response informed by the economic context and sensitive to the needs and opportunities of the area.

The project has also recognised that work within the Enterprise and Skills Review looking at governance, data, business support, innovation, internationalisation, skills alignment and the user journey will also benefit the South of Scotland and needs to respond to the area's needs. The new organisation, once established, will be part of the national governance arrangements and represented on the new strategic board to ensure that the area's interests are represented, recognised and responded to.