WE have entered another decade and it would be wonderful to believe that there were true glimmers of light at the end of the bleak economic tunnel. Sadly that is not yet the case and we look set for a further extended period of low growth amid significant domestic and international risks.

Over the past two or three years in this column I have regularly wittered on about the UK – and Scotland’s – continuing poor performance on productivity. The abject failure to improve significantly the efficiency of our production process has been at the root of our exceptionally weak economy for the past decade.

Indeed last month the Royal Statistical Society announced the result of its ‘UK statistic of the decade’ competition. The winner was revealed as 0.3% - the pitiful average annual increase in UK productivity through the 2010s. As the RSS Executive Director stated: - “if the UK could lift its productivity we … would have more money in our pockets and more money for government to spend on public services.”

In previous decades we had become accustomed to productivity growth of 1 1/2% - 2% per annum. If that trend had been continued during the past decade, signalling true recovery after the 2008 financial crisis, then output in UK and Scotland would have been perhaps 10% - 15% higher than is the case today. Even a quarter or a half of this differential would have permitted policy makers a wealth of options, including a greater emphasis on tackling climate change and wellbeing re-distribution; as well as a truly significant increase in expenditure on public services and economic infrastructure.

As it is we are stuck in an ultra-low growth rut. Thanks to some increase in the numbers employed (which in turn has in part been a result of net immigration) the increase in annual output (as measured by GDP) has been just positive, hovering around a feeble 1% per annum. Meantime, average earnings are still lower in real terms than they were before that 2008 recession; and we all know how severe the adverse effect of negligible growth and the perceived necessity for austerity policies has been on our public services.

Further evidence of the poverty of our economic performance comes from the almost total lack of investment by the UK corporate sector. And this is despite interest rates remaining through the decade at previously unimaginably low levels.

The lack of investment by both business and government has resulted in no significant innovation or development of additional or improved productive capability.

On the bright side, the labour market has, superficially, performed well - with unemployment remaining at record low levels. Yes, but … unfortunately most of the new jobs created are relatively low skill and with limited security. Many fresh new graduates are being pressed into service in these insecure and low-paid jobs, with many folk working part time not for preference but because quality full -time jobs are not accessible.

The inter-generational imbalance is becoming more and more evident. One worrying consequence of this imbalance and generally rising inequality is that demand growth in our economy is severely constrained. Those with significant wealth and higher earnings tend to save significantly more than the less well-off, who have a markedly higher propensity to save. Hence funds are not redistributed as effectively as we would wish and growth is ratcheted down once more.

This is why some economists on the pessimistic wing of the dismal science fear we are entering a period of ‘secular stagnation’, characterised by high savings, low investment and negligible growth of output, inevitably resulting in a marked curtailment of policy options.

One significant cause of the UK’s low business investment story has been the rampant uncertainties, largely Brexit-related. These are not confined to the past, despite the landslide win for a Prime Minister repeatedly proclaiming he would ‘get Brexit done’.

The uncertainties will be with us for a year or two yet. Doubtless we will leave the EU in some formal sense from 1st February, but nobody in government or business knows with any degree of certainty what happens next.

Agreeing a full blown trade deal with the EU by the end of 2020 appears unlikely in the extreme. If any extension is ruled out, then a hard Brexit is inevitable, with the UK and EU trading on World Trade Organisation terms.

Will our financial services sector have full and unfettered access to the EU market? Will multi-national companies in that sector, or indeed manufacturing, etc, wish to invest in the UK or even retain existing activities here? The relocation option will look increasingly attractive to large corporations as the extent and likely duration of uncertainties is revealed.

In Scotland we face a further uncertainty regarding whether, and if so when, there might be a second independence referendum. Leaving politics entirely to one side, we need to know much more about intentions for an independent Scotland so far as currency and exchange rate regime; trading relationship with rUK; and managing the public finances and taxation are concerned. The fact that there are no easy solutions does not mean these issues should be ignored or played down in importance.

In sum the outlook for 2020 is far from encouraging. GDP growth in UK and Scotland looks set to continue at somewhere around 1% per annum, if we are lucky. Recession remains a distinct possibility.

At least we can expect some increase in expenditure on key public services. But the scope for monetary policy intervention is marginal in the extreme and increasing public expenditure without expectation of increasing tax revenue is not a policy for the longer term.

We have to find means of encouraging innovative investment and making far better use of our skilled, ambitious and potentially highly-productive young workforce. This should be the focus of the Scottish economic debate.

Jeremy Peat is a visiting professor of the University of Strathclyde