A new national record label to release folk, traditional and jazz music should be set up to provide a platform for Scottish talent, the director of Glasgow's Celtic Connections festival has said.

Launching the festival's 20th anniversary programme, Donald Shaw said a new "nationalised" record label for folk, traditional, jazz and alternative music would be a valuable addition to the nation's culture in a time when the record industry is in trouble.

Asked about controversial crisis-hit arts funding body Creative Scotland, Mr Shaw said some of its most valuable work was funding the production of more than 60 records a year and added it should set up its own label to promote Scottish music at home and abroad.

He said what he regarded as the dire state of the record industry in Scotland would make such a "nationalised" company work for artists and audiences.

Mr Shaw, a musician and member of folk band Capercaillie, said he is likely to step aside from directing the annual roots, folk, traditional and Americana festival after 2014.

He said: "You want to know what the biggest record company in Scotland was last year? It was Creative Scotland.

"They financed nearly 60 albums last year, and there is no record label in Scotland who could afford to do that.

"If you ask me, they should go the whole hog and nationalise the record industry and hand it over to an expert team within Creative Scotland.

"They are funding the ability – particularly for folk and jazz artists, but indie artists as well –to record, because the record industry is so on its knees now."

This year's festival features a celebration of its 20 years, with an opening concert on January 17 that will feature Sheena Wellington, Eddi Reader, Julie Fowlis, Capercaillie and a festival string ensemble.

Other acts appearing at the festival – which will feature around 300 concerts in venues across the city – include Dougie MacLean, Mary Chapin Carpenter, the Old Crow Medicine Show, Nic Jones, Salif Keita, Kate Rusby, Carlos Nunez, Aimee Mann and the Radio 2 Folk Awards, which will be broadcast live.

Mr Shaw said it was still too early to tell whether the festival will mount a memorial concert to the late Michael Marra, the Dundee songwriter who died this week, aged 60.

However, he did say the national record label idea could work if properly funded and organised.

"Ten years ago, as a folk artist I would be looking to sell 4000 to 6000 units, but now its 1000 to 1500 – you do the maths on that," he said.

"You have to hire the studio and the musicians, it is just not worth it."

He added the label would give money for artists to record, master and have a "high quality product", as well as marketing. He added: "I really don't think it would be stepping on anyone's toes."

Ian Smith, manager for music at Creative Scotland, said it had funded 63 albums since April 2011 as well as making 18 recording studios available to young musicians under the CashBack for Creativity scheme.

He said: "We focus our support on investing in talent to find the right route to reach an audience for the artist and their work. For some it will be a recording, for others it will be showcasing their work internationally.

"At this point, Creative Scotland has no plans to compete with the many record companies in Scotland and beyond, who also invest in and support talent – we work in partnership with the labels and others who can act as publisher and distributor."

Mr Shaw firmly hinted he may only programme two more festivals.

"I have been saying this is my last year every year," he said.

"It's kind of a love/hate thing for me, I love it but it takes up so much of your headspace.

"I like to think of myself as a musician and so I need to get out there and let someone else do their thing.

"I am going to do 2014 because of the connotations of the Commonwealth Games, we will draw on that a lot, but I am not thinking any further ahead than that."

Celtic Connections runs from January 17 to February 3.

Tickets go on sale at 9am today at www.celticconnections.com.