Holyrood told to ‘get its act together’ over low Scottish productivity

7 Sep 18

Scotland’s productivity has remained broadly stagnant over the past 15 years despite its skilled workforce and a wealth of government strategies, according to new analysis.

Research by the David Hume Institute found that Scotland’s economy had underperformed compared to many of its European counterparts.

In its Wealth of the Nation report, the institute said there had been “no progress” on the Scottish government’s 2007 target for the country to join the most productive OECD economies.

“We have seen that Scotland’s productivity is only middling when compared with other OECD economies, and that – despite sustained attempts by successive Scottish governments to raise productivity – there has been little productivity growth in Scotland over the last 15 years,” it said.

Limited employment growth in productive industries and relatively low spending on business investment and research and development were among the factors highlighted in the report.

It also suggested that Scotland was failing to take full advantage of its well-educated workforce, pointing to poor managerial quality and a high concentration of small, lower productivity firms.

Setting out examples of how other countries and city regions had booted productivity through investment in skills and infrastructure, embracing internationalism and transforming school results, the institute said there were no “quick fixes” and a long-term approach was critical.   

The level of clarity, focus and execution in these case studies was “an order of magnitude” better than in Scotland, it said.

“In all cases, there was a concerted effort to get their act together and make choices, and to then stick to a consistent strategic direction across a long period of time, including across political cycles,” it said.

However, the minister for public finance and digital economy, Kate Forbes, said the Scottish economy was “fundamentally strong”, and that over the last decade productivity had grown at more than three times the rate across the UK as a whole.  

“Our ambitious economic strategy outlined in this week’s Programme for Government includes commitments on the Scottish National Investment Bank and Manufacturing Institute, while we are also committed to the biggest infrastructure spending Scotland has ever seen,” she said.

“Scotland’s economy is fundamentally strong, but we are determined to strengthen it further and will consider the points raised in this report.”

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