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

5. Views from public sector

5.1 Challenges

• Changes in population and demographics, particularly in rural Scotland – itself symptomatic of:
  • the need for more and better quality housing;
  • digital connectivity;
  • and improved transport links
• How to reconcile tensions between economic goals such as improved productivity and competitiveness versus concepts such as fair work, just transition, wellbeing.
• The need to clearly articulate SG position on growth, particularly for the business audience.
• Care needed around the timing of the transition to net zero, recognising that sectors will transition at difference speeds and need differing levels of support. Crucial to ensure we don't lose supply chains by moving too quickly. Net zero not zero emissions.
• COVID-19 exacerbating problems of under-investment and fragmented structures in culture sector.
• Designing the economy we want to shape such that it delivers on reducing inequalities and tackles the profound population health challenges we face.
• Providing quality local jobs which meet the skill levels of our residents in order to develop a stronger local economy (view from local government).
• Employers offer too many jobs that are low paid and too few opportunities for low paid workers to progress to higher paid employment. Not only is this economically inefficient, it entrenches social and economic inequality
• The need for a clear strategy to focus the entirety of the system on a smaller number of priority outcomes with clear ownership and clear measures of success.

5.2 Opportunities / priorities

• A stable policy context shaped by a high-quality business environment, the ability to respond to strategic shifts/shocks, and sustained investment in human capital and innovation.
• Natural capital - used to provide green power to Scotland; developed to support new industries e.g. Blue Economy, Green Hydrogen and Offshore Wind.
  • Carbon capture and storage, hydrogen, wave and tidal, subsea cables and pipelines and aquaculture all present distinct economic opportunities in Scotland, often supporting remote and fragile economies.
  • But opportunities here not widely understood - must do more to raise awareness of sustainable commercial/economic potential.
• A just, net zero transition should be at the heart of the new strategy.
  • Greening the economy and transport network is crucial
• Use the strategy as a means of achieving a wide range of societal outcomes, including those relating to climate, inequalities, poverty, health and work.
• Place investment - new and innovative ways of supporting regeneration, community ownership and wealth building.
• Delivering a whole systems approach to exploit synergies between Scotland's ambitions to become a Fair Work Nation, to transition to net zero, to address child poverty and to become a wellbeing economy.
• Prioritise innovation as a driver for local, place-based economic growth. Protect discovery research and harness the power of innovation to amplify the contributions of research and development to economic development and transformation.
• Transition current skills investment profile to more responsive portfolio including (1) Traditional academic pathways; but also (2) expanded work based pathways; (3) rapid industry led retraining (for unemployed); (4) Upskilling of existing workers.

5.3 Examples of ideas to transform the economy

• Capitalise on Scotland's early recognition of the importance of Fair Work and Workplace Innovation. A focus on how businesses are run and the importance of high quality workplace practices is essential to addressing poor productivity performance, and to create ambitious businesses with the right leadership to encourage investment, innovation and high levels of skills utilisation. This should include improving Fair Work conditionality alongside support for business.
• Facilitate enhanced role for private sector networks & peer-to-peer knowledge transfer. Many businesses need advice not funding.
• Support and fund acceleration of Business Support Partnership – necessary vehicle for streamlining and joining up business support and other economic development activity - reduces duplication, enhances system thinking, collaboration and ensures we learn from partners across Scotland – importantly incorporates sharing of data to aid much more effective understanding of system wide activity and evidence about "what works".
• Develop & implement integrated national/regional skills investment strategies to support ambitions of Climate Emergency Skills Action Plan (CESAP) & the Scottish Technology Ecosystem Review (STER) as two of the most significant cross sector, transformational programmes.
• Multi-year funding cycles for capital and revenue funding programmes that support Just Transition, fair work, No One Left Behind and inclusive economic growth.
• Address income and health inequalities through UK corporation tax changes to limit excessive profits and mandatory employee representation on boards. Break up monopolies, ensure competition, increase community owned businesses and regulate financial sector to limit "wealth extracting financial engineering".
• Establish Scotland as a world leading 'responsible' nature-based tourism destination
• New, Good and Green Jobs - supporting sectors of the future but helping existing sectors transition - creating supply of new jobs in Scotland alongside potential to develop saleable expertise, practices and technologies.
• Digital tools to support up-take of innovations in technology and working practices.