Technological change and the Scottish labour market

Section 4: Scottish Government approach

The Scottish Government’s policy framework - including Scotland’s Economic Strategy, and it’s defining commitment to Inclusive Growth, and the Labour Market Strategy - provides a strong basis from which to optimise the labour market changes posed by technological change, ensuring that all Scotland’s people have the opportunity to benefit from new goods and services and employment opportunities in emerging sectors. The new type of dialogue between employers, unions and Government promoted through the Fair Work Convention will help meet the labour market challenges outlined in this paper. The Scottish Government also remains committed, as far as devolved powers allow, to the maintenance of a robust social safety net which meets the needs of all Scotland’s citizens as well as providing the security necessary to support innovation and entrepreneurialism.

It is important to note that quality jobs have already been created in the recent past in sectors where Scotland is at the forefront of technological change. These include life sciences – where almost 40,000 people are now employed, the games industry (particularly in Dundee – where post-industrial unemployment has traditionally been high) and the emerging technology cluster (including FinTech) in Edinburgh. The world leading research pursued by Scotland’s higher education – for example, Edinburgh University’s work on robotics and data analytics - and research institutions is translating into successful commercial ventures.

As noted in this year’s Programme for Government, the Scottish Government believes that emerging technologies provide significant opportunities for Scotland:

“Businesses and governments across the world are investing in artificial intelligence, machine learning, data analytics and low carbon energy technologies that will revolutionise the global economy. The opportunities for those that adapt and lead these changes are substantial. The prize is an innovative, growing economy which creates more and better jobs for everyone in Scotland. But we know that to grasp these opportunities we must act quickly and with purpose or be left behind. We intend to seize the moment, and this Programme for Government sets out actions to make Scotland a country that will lead change and reap the economic rewards it will bring”.

Specific measures included in PFG that will help maximise the employment benefits of technological change include:

• a bold new ambition on ultra-low emission vehicles, including electric cars and vans, with a target to phase out the need for petrol and diesel vehicles by 2032, underpinned by a range of actions to expand the charging network, support innovative approaches and encourage the public sector to lead the way
• providing direct support for additional business research and development.
• establishing a National Investment Bank to support infrastructure investment, help companies grow and support our economic vision.
• establishing a Just Transition Commission to advise Scottish Ministers.
• directly supporting the Lightweight Manufacturing Centre in Renfrew to give Scottish companies a competitive edge in new manufacturing processes for lightweight materials.
• a commitment to confirm the location and academic and business partners for the National Manufacturing Institute for Scotland ( NMIS) this year and to begin construction work onsite during 2018.
• launching a service to engage 200 manufacturing businesses each year to develop their own 'Manufacturing 4.0 Improvement Plan'.
• provide £18 million support - from the Scottish Government and the European Regional Development Fund - through Zero Waste Scotland to help manufacturing businesses unlock the economic potential of the circular economy by maximising the value of the manufacturing process from beginning to end.
• Investment in digital skills.

Also, Ministers established the Enterprise and Skills Strategic Board in November 2017 in line with the Enterprise and Skills Phase 2 report. Its objective is to improve Scotland’s productivity through the alignment and co-ordination of the activities of Scotland's enterprise and skills agencies: Scottish Enterprise, Highlands and Islands Enterprise, Skills Development Scotland and the Scottish Funding Council.

The Strategic Board will seek to maximise the impact of the collective investment that Scotland makes in enterprise and skills development, and to create the conditions that are conducive to delivering inclusive and sustainable growth. It is anticipated that the Board will play a crucial role in shaping our response the skills challenges around technological change.