Scotland's National Strategy for Economic Transformation: stakeholder engagement analysis

3. Views from private sector

3.1 Challenges

• Net Zero and nature loss: Twin challenge of nature biodiversity loss combined with climate warming. How to go about the transition to net zero and a just transition to support jobs and communities most at risk. A need to better identify the key drivers of green growth. Timing is a challenge ensure talent is there once net zero technologies reach scale. Need to address barriers to scaling up low carbon projects in all sections of the community.
• Inequalities remain and more could be done to promote social capital. Digital divide in more deprived areas. Lack of diversity in the workforce.
• Skills gaps and labour shortages in many sectors and regions of the Scottish economy are impediments to growth. Ageing population.
• Sector specific challenges: Many arising from COVID-19 which has accelerated many of the trends that were underway. Short term shortages of materials in some sectors.
• Infrastructure: Better digital and physical infrastructure including housing and connectivity. Improved tourism infrastructure.
• Commercialisation of innovation. Commercialising or attracting large-scale manufacturing of innovations is weak.
• Regional variation: City centres and businesses and retail in city centres suffering from loss of footfall.
• Regulation: Other countries are more efficient and quicker, in some sectors.
• Governance and role of public sector: A complex economic development structure with duplication. Scotland's public sector continues to grow and accounts for an increasing share of employment.

3.2 Opportunities / priorities

• Net Zero: Achieve green economic recovery and jobs for the future, a just transition, and deliver net-zero targets. Work closely with businesses to achieve net zero ambitions by setting clear direction to allow businesses to invest. Net zero solutions by building on Scotland's strengths and investing in them through fiscal measures including carbon pricing. Role for social enterprises in the energy transition. Maximise the potential offered by the marine energy and green hydrogen sectors in Scotland Potential to generate high quality, highly skilled jobs across Scotland, particularly in maritime and peripheral regions. Enhancing our natural ecosystems will bring resilience against climate change.
• Circular economy: Consume less and produce less waste. Opportunities for sustainability and sustainable product lifecycles and to improve traceability through supply chain. Scope to include Scottish health and social care procurement agencies to take a whole life approach to decision making about products. Digital solutions can also help rebuild our natural capital.
• Entrepreneurship, innovation and different ownership models: Innovation roadmap to drive entrepreneurial economy. Raise awareness of different business models such as employee ownership. Third sector and social enterprise structure important. Smarter and more efficient processes for new start-ups by young entrepreneurs. Build on resilience of businesses to adapt and reinvent their business models during pandemic. Support small-scale, local business that provides local, secure jobs and community benefits. Community bank model providing support to SMEs in or with a connection to its geographic area.
• Data and Digital: Become a leader in digital technology. Foundational talent pipeline. Support cloud infrastructure and platforms to support remote workforces. Promote digitising supply chains.
• Infrastructure: A portfolio of infrastructure investment to promote green projects.
• Regional/places: Decentralisation to enable regions to maximise their potential. Renewed focus on local procurement and local supply chains. Recovery programme for Scotland's high streets. Invest in and future proof Scotland town and city centres.
• Reshape the nature of our economy to deliver a Wellbeing Economy.
• Internationalisation and inward investment: Public/private partnerships to increase number of Scottish exporters. Opportunities for strengthening attractiveness for companies to locate beyond the Central Belt. Seek a review of UK Government relocation tax threshold. Scotland must constantly reassess its attractiveness for investors, notable opportunity in Pharma. Dedicated Customs Academy to support knowledge and requirements post EU exit.
• R&D: Increase government spending on R&D to match advanced economies and boost productivity and innovation. Support for clinical research and development in optimising the setting up and running of more clinical trials in Scotland.
• Job, skills and education: A renewed focus on the workforce of the future. Develop youth workforce and female business leaders. Bring in global talent (in sectors such as digital skills). Skills passports for lifelong learning. Promote renewables skills. Bite-size learning opportunities, especially for SMEs and the not-for-profit sector. Transform workplaces with a focus on fair work and address employee mental health. Involve industrial and economic expertise in developing curriculum. Embrace diversity. Key role for our world leading universities and colleges.
• Governance: Good governance will drive transformation. Review remit of agencies and NDPBs so that they champion net zero.
• Funding and other levers: Funding with conditionality on net zero, waste. Create specific scale up funding opportunities and have as a criterion for access to funding. Ring-fenced funding package to promote diversity. Consider Non Domestic Rates relief. Property taxation system to incentivise investment. Continue to promote better regulation. Social investment tools and models.
• Finance institutions: Finance institutions to work alongside businesses and take longer term view on debt. Ensure scale ups receive the funding they need.
• Planning and consents: Effective planning and associated consenting systems to deliver net zero and support the delivery of new homes of all tenures, to help deliver a green economy and attract the private sector investment necessary.

3.3 Examples of ideas to transform the economy

• Energy Transition. Become a leader in exportable net zero solutions. Scotland's green hydrogen sector offers opportunities for the creation of new secure jobs. A Green Boards strategy to support company Directors to adopt Net Zero. Enhance connections between industry and academia. Using AI cloud and data science for robust emissions measurement. Provide support to foster a strong manufacturing base within Scotland. Deployment of renewables through the intelligent use of battery storage. Include communities in the conversation on just transition that supports them and the local communities in which they live and work.
• Data, Digital and Tech: Become a leader in digital technology. Better data availability means better services. Good data important to recovery. Opportunity in Health and social care data. Invest in cloud computing skills. Women in technology. Cities as a hub for data science and AI.
• Diversity: Focus on providing the right incentives and support businesses who invest in the skills and diversity of their workforce. Set targets for diversity in the business leadership teams. Provide targeted support for women's groups. Purpose-build diversity into management teams to change their culture and deliver growth by embracing diversity of thought and perspectives.
• Nature based solutions to climate change and the green economy to build resilience of the economy.
• Foster a thriving clinical research environment: Put research at the heart of all NHS Scotland does, in line with the ambition of making the Scotland the destination of choice for clinical research.
• Brand Scotland. Opportunity to make much more of Scotland's brand. Take advantage of the positive pre-disposition that people around the world have to working with Scotland, buying Scottish products, engaging with Scottish people.
• Government as an exemplar: Decentralisation of civil service jobs. Digitisation of public services. Create a separate company to manage Government investments.